A  TREATISE 


LAW   OF    MOETGAGES 


REAL  PROPERTY. 


LEONARD  A.  JONES, 

AUTHOR    ALSO    OF    A    TREATISE    ON    RAILROAD    SECURITIES. 


TN  TWO  VOLUMES. 
VOL.  IL 

SECOND  EDITION. 


BOSTON: 
HOUGHTON,  OSGOOD  AND*  COMPANY. 

1879. 


oOVo- 


T 


Copyright,  1878  and  1879, 
By  LEONARD  A.  JONES. 


All  ri(/hts  reserved. 


CAMIiRIDGE  : 

IJviutcG  at  tl)e  ^ihtxii^z  "i^xHi, 

By  H.  0.  Koughtou  aad  Company. 


I 


\ 

TABLE   OF   CONTENTS. 


CHAPTER   XXI. 


PAYMENT   AND    DISCHARGE. 


1.  Tender  before  and  after  Default 

2.  Appropriation  of  Payments        .         .         . 

3.  Presumption  and  Evidence  of  Payment 

4.  Payment  by  Accounting  as  Administrator 

5.  Changes  in  the  Form  of  the  Debt  .... 

6.  Revivor  of  Mortgage  ...••• 

7.  Foreclosure  does  not  constitute  Payment 

8.  Wlio  may  receive  Payment  and  make  Discharge 

9.  Discharge  by  Mistake  or  Fraud     .... 

10.  Form  and  Construction  of  Discharge 

11.  Entry  of  Satisfaction  of  Record 

12.  Statutory  Provisions  for  Entering  Satisfaction  of  Record 


904 
913 
919 
924 
943 
950 
956 
966 
972 
989 
992 


CHAPTER  XXn. 

REDEMPTION    OF    A    MORTGAGE. 

1.  Redemption  a  Necessary  Incident  of  a  Mortgage        ....  1038 

2.  Circumstances  affecting  Redemption 1047 

3.  When  Redemption  may  be  made 1052 

4.  Who  may  redeem ^^^^ 

5.  The  Sum  payable  to  effect  Redemption 1070 

6.  Contribution  to  redeem ^^^^ 

7.  Pleadings  and  Practice  on  Bills  to  redeem 1093 

CHAPTER  XXIII. 

mortgagee's   ACCOUNT. 

1.  Liability  to  Account m* 

2.  What  the  Mortgagee  is  chargeable  with 1121 

3.  Allowances  for  Repairs  and  Tmjjrovements       .         .         .         •         .1126 

4.  Allowance  for  Compensation       .         .         .         .         .         .         •         .1132 

5.  Allowances  for  Disbursements 11^4 

6.  Annual  Rests      , 1^39 

V 


66V574 


TABLE   OF   CONTENTS. 
CHAPTER  XXIV. 

WHEN    THE   RIGHT    TO    REDEEM    IS    UARRED. 

SECTION 

1.  The  Statute  of  Limitations  applies  by  Analogy        .         .         .         .1144 

2.  AVhen  the  Statute  begins  to  run 1152 

3.  What  prevents  the  Running  of  the  Statute 1162 

CHAPTER  XXV. 

WHEN  THE  RIGHT  TO  ENFORCE  A  MORTGAGE  ACCRUES     .  1174 

CHAPTER  XXVI. 

WHEN    THE    RIGHT    TO    FORECLOSE    IS     BARRED      .  .       1192 

CHAPTER  XXVII. 

REMEDIES    FOR    ENFORCING    A    MORTGAGE. 

1.  Are  Concurrent  ...........  1215 

2.  Personal  Remedy  before  Foreclosure 1220 

3.  Personal  Remedy  after  Foreclosure 1227 

4.  Sale  of  Mortgaged  Premises  on  Execution  for  Mortgage  Debt        .       1229 

5.  Remedy  as  affected  by  Bankruptcy 1231 

CHAPTER  XXVIII. 

FORECLOSURE   BY    ENTRY   AND   POSSESSION. 

1.  Nature  of  the  Remedy 1237 

2.  Statutory  Provisions 1239 

3.  The  Entry 1246 

4.  The  Possession     ...........  1258 

5.  The  Certificate  of  Witnesses 1259 

6.  The  Certificate  of  the  Mortgagor 1261 

7.  When  the  Limitation  commences 1262 

8.  Record  of  the  Certificate 1263 

9.  Effect  of  the  Foreclosure  upon  the  Mortgage  Debt          .         .         .  1264 
10.  Waiver  of  Entry  and  Foreclosure 1265 

CHAPTER  XXIX. 

FORECLOSURE  BY  WRIT  OF  ENTRY. 

1.  Nature  of  and  where  used 1276 

2.  Who  may  maintain .  1280 

3.  Against  whom  the  Action  may  be  brought       .         .         .         .         .       1290 

4.  The  Pleadings  and  Evidence 1292 

5.  The  Defences 1296 

6.  The  Conditional  Judgment 1306 

vi 


TABLE    OF   CONTENTS. 
CHAPTER  XXX. 

SECTION 

STATUTORY   PROVISIONS   RELATING   TO    FORECLOSURE    AND    REDEMP- 
TION     1317 

CHAPTER   XXXI. 

THE    PARTIES    TO    AN   EQUITABLE    SUIT    FOR    FORECLOSURE     .  .    1367 

PART  I. 
Of  Parties  Plaintiff 1368 

PART  II. 
Of  Parties  Defendant 1394 

CHAPTER  XXXII. 

FORECLOSURE    BY   EQUITABLE    SUIT. 

1.  Jurisdiction,  and  the  Object  of  the  Suit 1443 

2.  The  Bill  or  Complaint 1451 

3.  The  Answer  and  Defence 1479 

CHAPTER  XXXIII. 

THE   APPOINTMENT    OF    A   RECEIVER. 

1.  When  a  Receiver  will  be  appointed 1516 

2.  Duties  and  Powers  of  a  Receiver 1535 

CHAPTER  XXXIV. 

DECREE    OF    STRICT    FORECLOSURE. 

1.  Nature  and  Use  of  this  Remedy 1538 

2.  In  what  States  it  is  used  ........       1542 

3.  Pleadings  and  Practice 1557 

4.  Setting  aside  and  opening  the  Foreclosure 1569 

CHAPTER  XXXV. 

DECREE    OF    SALE. 

1.  A  Substitute  for  Foreclosure       .         .        .         .         .         .         .         .  1571 

2.  The  Form  and  Requisites  of  the  Decree 1574 

3.  The  Conclusiveness  of  the  Decree 1587 

4.  The  Amount  of  the  Decree 1590 

5.  Costs 1602 

CHAPTER  XXXVI. 

FORECLOSURE  SALES  UNDER  DECREE  OF  COURT. 

1.  Mode  and  Terms  of  Sale 1608 

2.  Sale  in  Parcels 1616 

3.  Order  of  Sale 1620 

vii 


TABLE  OF  CONTENTS. 


SECTION 

Conduct  of  Sale 1633 

Coiiliniuition  of  Sale        .         .         .         .         .         .         •         .         .1637 

Enforcement  of  Sale  against  the  Purchaser 1642 

The  Deed,  and  Passing  of  Title 1652 

The  Delivery  of  Possession  to  Purchaser 1663 

Setting  aside  of  Sale 1668 


CHAPTER   XXXVII. 

APPLICATION  OF  PROCEEDS  OF  SALE. 

1 .  Payment  of  the  Mortgage  Debt  .... 

2.  Disposition  of  the  Surplus       ..... 

3.  Priorities,  between  Holders  of  several  Notes  secured 

4.  Costs  of  Subsequent  Mortgagees      .... 


.  1682 
1684 

.  1699 
1708 


CHAPTER  XXXVIII. 

JUDGMENT    IN   AN   EQUITABLE    SUIT   FOR   A    DEFICIENCY 


1709 


CHAPTER  XXXIX. 

STATUTORY   PROVISIONS    RELATING    TO    POWER    OF    SALE    MORTGAGES     AND 

TRUST    DEEDS. 


1.  Introductory    

2.  Statutory  Provisions  in  the  Several  States 


1722 
1723 


CHAPTER  XL. 

POWER   OF    SALE   MORTGAGES   AND    TRUST   DEEDS. 

1.  The  Nature  and  Use  of  Powers  of  Sale  .... 

2.  The  Power  of  Sale  is  a  Cumulative  Remedy 

3.  Construction  of  Power      ...... 

4.  Revocation  or  Suspension  of  the  Power 

5.  When  the  Exercise  of  the  Power  may  be  enjoined 

6.  Personal  Notice  of  Sale 

7.  Publication  of  Notice 

8.  "What  the  Notice  should  contain 

9.  Sale  in  Parcels  ....... 

10.  Conduct  of  Sale,  Terms,  and  Adjournment 

1 1 .  Who  may  purchase  at  Sale  under  Power 

12.  The  Deed  and  Title 

13.  The  Affidavit 

14.  Setting  aside  and  waiving  Sale 

15.  Costs  and  Expenses  ..... 

16.  The  Surplus 

viii 


1764 
1773 
1777 
1792 
1801 
1821 
1827 
1839 
1857 
1861 
1876 
1889 
1904 
1906 
1923 
1927 


THE    LAW   OF    MORTGAGES 

OF   REAL   PROPERTY. 


CHAPTER   XXI. 


PAYMENT   AND   DISCHARGE. 


I.   Tender  before  and  after  default,  886- 

903 
II.  Appropriation    of    payments,    904- 
912. 

III.  Presumption   and   evidence   of  pay 

ment,  913-918. 

IV.  Payment    by  accounting   as  admin- 

istrator, 919-923. 
V.  Changes  in    the  form  of  the  debt, 

924-942. 
VI.  Revivor  of  mortgage,  943-949. 


Vn.  Foreclosure    does    not     constitute 
payment,  950-955. 
VIII.  Who    may   receive    payment    and 
make  discharge,  956-965. 
IX.  Discharge    by   mistake    or    fraud, 

966-971. 
X.  Form     and     construction    of    dis- 
charge, 972-988. 
XI.  Entry  of  satisfaction  of  record,  989- 

991. 
XII.  Statutory   provisions   for    entering 
satisfaction  of  record,  992-1037. 


1.   Tender  before  and  after  Default. 

886.  At  common  law,  payment  or  tender  of  payment  at 
the-time  mentioned  in  the  condition  of  the  mortgage  wholly  dis- 
charges the  incumbrance.  Payment  before  the  day  named  in  the 
condition,  equally  with  payment  at  the  day,  saves  the  breach  of 
the  condition  and  defeats  the  estate.  In  such  case  no  written 
release  is  needed  except  as  evidence  of  the  facts,  and  to  remove 
the  apparent  incumbrance  from  the  records.^  If  a  tender  properly 
made  of  the  sum  due  be  refused,  the  mortgagor  may  reenter  and 
the  land  is  freed  from  the  condition  ;  the  debt,  however,  is  not 
discharged,  but  may  be  recovered  by  action.^     Payment  after  the 

1  Erskine  v.   Townsend,  2  Mass.   493;  v.  Cambridge,  2  lb.   118;  and  see  Joslyn 

Holman   v.   Bailey,   3   Met.    (Mass.)  55;  v.  Wyman,  5  lb.  62  ;  Grover  i'.  Flye,  5  lb. 

Merrill   v.  Chase,  3  Allen  (Mass.),  339;  543;  Grain  v.  McGoon,  86  111.  431. 

Doody  i).  Pierce,  9   lb.   141;  Richardson  "  Co.  Litt.  209  6;  Martindale  v.  Smithy 

VOL.  II.  1  -^ 


§  887.]  PAYMENT   AND   DISCHARGE, 

day,  as  will  presently  be  more  fully  noticed,  does  not  produce  the 
same  result.  A  reconveyance  is  then  necessary  in  order  to  revest 
the  estate  in  the  mortgagor.  A  tender  is  then  of  no  avail  except 
with  reference  to  costs  upon  a  bill  to  redeem,  which  is  the  only 
remedy  when  such  tender  is  refused. 

Where  a  first  mortgagee  before  the  time  named  in  the  condition 
took  from  the  mortgagor  an  absolute  deed,  of  the  property  with 
full  covenants  of  warranty  in  satisfaction  of  the  mortgage  debt, 
but  did  not  formally  discharge  his  mortgage,  it  was  held  that  a 
second  mortgagee  might  maintain  against  him  a  writ  of  entry  to 
obtain  possession  and  foreclosure,  but  could  not  maintain  a  bill  in 
equity  to  redeem,  because  the  legal  title  under  the  first  mortgage 
was  effectually  divested.  The  debt  being  paid  before  it  was  due, 
the  condition  was  saved,  the  mortgagee's  estate  defeated,  and  as 
effectually  divested  as  it  would  have  been  if  there  had  been  a 
release  from  him  to  the  mortgagor.^  "  The  act  of  payment  in  the 
country  ante  vel  apud  diem  saves  the  forfeiture  of  an  estate  held 
by  a  conveyance  defeasible  on  a  condition  subsequent.  No  record 
of  such  an  act  is  necessary  to  make  the  estate  a  fee  simple  estate 
in  the  grantor  or  mortgagor,  as  against  all  persons  claiming  by  a 
subsequently  acquired  title."  ^ 

887.  To  revest  the  title  by  performance  of  the  condition 
the  performance  must  be  substantially  and  formally  within  the 
terms  of  the  condition.  The  estate  of  the  mortgagee  is  at  law 
defeasible  only  by  the  performance  of  the  condition  strictly  in  the 
manner  and  at  the  time  stipulated.  When  this  is  done  the  estate 
reverts  back  to  the  mortgagor  without  any  reconveyance,  by  the 
simple  operation  of  the  condition.  But  after  a  failure  to  comply 
with  the  exact  terms  of  the  condition,  the  estate  is  forfeited  at 
law,  and  a  reconveyance  is  necessary  to  i-estore  the  estate  to  the 
mortgagor.  Where,  therefore,  the  condition  in  a  mortgage  given 
to  indemnif}'-  a  surety  on  the  mortgagor's  note  was  that  he  should 
pay  the  note  according  to  its  tenor,  and  four  days  before  it  became 
due  a  third  person,  in  pursuance  of  an  arrangement  made  by  the 
surety,  paid  the  note,  and  took  a  release  from  the  surety  of  his 
interest  in  the  mortgage,  it  was  held  that  this  did  not  amount  to 

1  Q.  B.  389  ;  1  G.  &.  D.  1 ;  and  see  Kort-  2  pgr  Chief  Justice  Bigelow,  in  Giover 
right  V.  Cady,  21  N.  Y.  343.     See  §  891.     v.  Flye,  5  Allen  (Mass.),  .543. 

1  Holman  v.  Bailey,  3  Met  (Mass.)  55  ; 
and  see  Whitcomb  v.  Simpson,  39  Me.  21. 

2 


TENDER   BEFORE    AND   AFTER   DEFAULT.       [§§  888,  889. 

a  payment  of  the  note  by  the  debtor,  within  tlie  condition  of  the 
mortgage,  so  as  to  revest  tlie  title  in  him.^ 

The  condition  of  a  mortgage  for  the  support  of  the  mortgagee 
during  life  having  been  faithfully  performed,  the  title  upon  his 
death  revests  in  the  mortgagor  without  a  reconveyance. ^ 

888.  Payment  before  the  day  cannot  be  enforced  by  either 
party.  When  a  mortgage  is  payable  at  a  day  certain,  while  on 
the  one  hand  the  mortgagor  cannot  be  called  upon  before  that 
day  to  make  payment,  on  the  other  the  mortgagee  cannot  be 
called  upon  before  that  day  to  receive  payment ;  ^  unless,  perhaps, 
there  be  tendered,  in  addition  to  the  principal  sum,  all  the  interest 
that  would  accrue  up  to  the  day  fixed  for  payment.^  A  payment 
before  the  day,  if  accepted  by  the  creditor,  operates  as  a  perform- 
ance of  the  condition  equally  with  a  payment  at  the  day.^  Of 
course  a  third  person  who  has  assumed  the  mortgage  or  purchased 
an  estate  subject  to  it  has  no  more  right  than  the  mortgagor  him- 
self to  pay  off  the  mortgage  before  it  is  due  ;  and  the  fact  that 
the  mortgagor,  when  he  is  primarily  liable  to  pay  the  mortgage, 
has  become  insolvent,  gives  the  purchaser  of  the  estate  or  of  a 
portion  of  it  no  right  to  pay  off  the  mortgage.^ 

An  exception  to  the  rule  that  payment  of  a  mortgage  cannot  be 
enforced  until  it  is  due  by  its  terms  occurs,  also,  when  the  parties 
to  it  have  by  subsequent  agreement  changed  the  time  of  payment 
to  an  earlier  date.  A  mortgagor  having  offered  a  sum  of  money 
in  addition  to  the  mortgage  debt  to  induce  the  mortgagee  to  accept 
immediate  payment  of  it  when  it  had  several  years  to  run,  and 
having  paid  half  of  the  sum  at  the  time,  and  agreed  to  pay  the 
rest  in  a  few  days,  upon  his  failure  to  do  so,  the  mortgagee  was 
allowed,  after  tendering  a  release  of  the  mortgage,  to  maintain  an 
action  for  the  balance  of  the  amount  agreed  ujDon.  The  agree- 
ment having  been  founded  upon  a  valid  consideration,  and  partly 
performed,  may  be  enforced  in  an  equitable  proceeding." 

889.  Payment  after  condition  broken.  —  But  while  payment 
before  condition  l;)roken  revests  the  title  in  the  mortgagor,  with- 
out   reconveyance   or    other  discharge,  payment   after    condition 

1  Campu.  Smiili,  5  Conn.  80.  5  Burgayne  v.  Spiirling,  Cro.  Car.  283. 

2  Munsor  v.  Munsoii,  30  Conn.  425.  «  Iloag-y.  Ratlihun,  1  Clarke    (N.  Y.), 
8  Brown  v.  Cole,  14  Sim.  427  ;  Abbe  v.     12. 

Goodwin,  7  Conn.  377.  7  Scott  v.  Frlnk,  53  Barb.  (N.  Y.)  533. 

*  Hoyle  V.  Cazabat,  25  La.  Ann.  438. 


§  889.] 


PAYMENT   AND   DISCHARGE. 


broken  does  not  divest  the  mortgagee  of  his  legal  title  ;  and  the 
mortgagor,  if  necessary,  must  resort  to  equity  for  a  release  or  re- 
conveyance. This  is  the  doctrine  of  the  common  law,  and  gener- 
ally prevails  in  those  states  where  the  common  law  doctrine  of  the 
nature  of  mortgages  has  not  been  changed  by  statute ;  ^  but  in 
those  states  which  have  departed  from  the  common  law  in  this 
respect  it  is  held  that  the  acceptance  of  payment,  after  condition 
broken,  is  a  waiver  of  the  condition,  and  has  the  same  effect  as  a 
performance  of  it.  The  mortgage  being  regarded,  not  as  an  es- 
tate in  the  land,  but  as  merely  a  lien,  the  life  of  which  depends 
altogether  upon  the  debt,  when  this  is  paid  the  lien  is  in  fact  dis- 
charged ;  2  although  it  is  important  that  a  discharge  of  the  incum- 
brance be  made  upon  the  record. 

Under  this  view  of  the  nature  of  a  mortgage,  not  only  payment, 
but  any  act  which  amounts  to  payment  and  discharges  the  debt, 
discharges  also  the  mortgage  ;  ^  and  payment  of  a  part  of  the 
debt  is  a  satisfaction  and  release  of  the  mortgage  to  that  extent.^ 

The  rule  that  a  discharge  of  the  debt  is  a  discharge  of  the 
mortgage  has  no  application  when  the  debt  is  merely  discharged 
by  the  statute  of  limitations  or  by  a  discharge  in  bankruptcy.^ 


1  Phelps  V.  Sage,  2  Day  (Conn.),  151  ; 
Doton  i;.  Russell,  17  Conn.  146;  Cross  y. 
Robinson,  21  Conn.  379;  Smith  v.  Keliey, 
27  Me.  237;  Stewart  v.  Crosby,  50  Me. 
ISO;  Currier  v.  Gale,  9  Allen  (Mass.), 
522  ;  Howard  v.  Howard,  3  Met.  (Mass.) 
548,  557  ;  Holman  v.  Bailey,  lb.  55  ;  May- 
nard  v.  Hunt,  5  Pick.  (Mass.)  240;  Wade 
V.  Howard,  11  lb.  289;  Parsons  v.  Welles, 
17  Ma>-s.  419;  Howe  v.  Lewis,  14  Pick. 
(Mass.)  329  ;  Crosby  v.  Leavitt,  4  Allen 
(Mass.),  410. 

2  Jackson  v.  Stackliouse,  1  Cow.  (N. 
Y.)  122;  Hatfield  v.  Reynolds,  34  Barb. 
(N.  Y.)  612;  Cameron  v.  Irwin,  5  Hill  (N. 
Y.),  272  ;  Runyau  v.  Mersereau,  11  Johns. 
(N.  Y.)  534,  538;  Jackson  v.  Crafts,  18 
lb.  110,  114;  Jackson  v.  Davis,  18  lb.  7 ; 
Rogers  i;.De  Forest,  7  Paige  (N.  Y.),  272  ; 
Arnot  V.  Post,  6  Hill  (N.  Y.),65;  Hartley 
V.  Tatham,  26  How.  (N.  Y.)  Pr.  158; 
Farmers'  Fire  Ins.  &  Loan  Co.  v.  Ed- 
wards, 26  Wend.  (N.  Y.)  541  ;  21  lb.  467; 
Kori  right  v.  Cady,  21  N.  Y.  343;  Stod- 
dard r.  Hart,  23  N.  Y.   556 ;  Blodgett  v. 


Wadhams,  Hill  &  Den.  (N.  Y.  )  65  ;  Led- 
yard  v.  Chapin,  6  Ind.  320 ;  Southerin 
V.  Mendum,  5  N.  H.  431  ;  Robinson  v. 
Leavitt,  7  N.  H.  73,  92 ;  Swett  v.  Horn,  1 
N.  H.  332  ;  Shields  v.  Lozear,  34  N.  J.  L. 
496,  per  Depue,  J. ;  Osborne  v.  Tunis,  1 
Dutch.  (N.  J.)  633,  651  ;  McNair  v.  Pi- 
cotte,  33  Mo.  57 ;  McMillan  v.  Richards, 
9  Cal.  365  ;  Johnson  v.  Sherman,  15  Cal. 
287  ;  Caruthers  v.  Humphrey,  12  Mich. 
270  ;  Griffin  v.  Lovell,  42  Miss.  402. 

3  Kortright  v.  Cady,  21  N.  Y.  343 ; 
Sherman  v.  Sherman,  3  Ind.  337  ;  Terrio 
V.  Guidry,  5  La.  Ann.  589  ;  Le  Beau  v. 
Glaze,  8  lb.  474;  Schinkel  v.  Hanewinkel, 
19  lb.  260;  Shields  v.  Lozear,  34  N.  J.  L. 
496,  per  Depue,  J. 

*  Champney  v.  Coope,  32  N.  Y.  543 ; 
N.  Y.  Life  Ins.  &  Trust  Co.  v.  Howard,  2 
Sandf.  (N.  Y.)  Ch.  183;  Briggs  v.  Sey- 
mour, 17  Wis.  255;  Howard  v.  Gresham, 
27  Ga.  347. 

^  Chamberlain  v.  Meeder,  16  N.  H.  381 ; 
Bush  y.  Cooper,  26  Miss.  599. 


TENDER    BEFORE   AND   AFTER   DEFAULT.  [§  890. 

A  mortgage  of  indemnity  for  a  part  only  of  the  amount  of  the 
mortgagee's  liability  is  -not  discharged  by  the  mortgagor's  extin- 
guishing a  part  of  the  liability,  but  still  leaving  a  liability  equal 
to  the  amount  of  the  mortgage  ;  but  it  continues  as  an  indemnity 
until  the  whole  debt  is  discharged.^ 

Under  the  common  law  where  payment  is  made  after  condi- 
tion broken,  and  there  has  been  no  release  to  the  mortgagor,  the 
legal  title  in  the  mortgagee,  though  of  no  value  to  him  and  but  a 
mere  naked  trust  without  interest,  is  sufficient  to  authorize  a  sale 
of  the  mortgagor's  equity  on  execution  under  statutes  providing 
for  a  sale  instead  of  a  levy  of  the  execution  where  there  is  a  mort- 
gage.2  The  mortgagor  cannot  maintain  trespass  quare  claumm,^ 
or  a  writ  of  entry,*  against  the  mortgagee  in  possession.  Such 
a  title  in  the  mortgagee  is  also  sufficient  to  enable  him  to  defend 
an  action  of  ejectment.^  But  on  the  other  hand,  the  title  remain- 
ing in  the  mortgagee  is  not  sufficient  to  enable  him  to  maintain 
a  writ  of  entry  against  the  mortgagor,  because  under  the  statutes 
providing  for  such  action  to  effect  a  foreclosure  there  must  be  a 
conditional  judgment,  which  cannot  of  course  be  had  after  pay- 
ment of  the  debt.^ 

890.  Notice  of  payment.  —  It  is  a  rule  of  practice  in  Eng- 
land, not  supported  by  any  positive  law,  except  so  far  as  custom 
makes  law,  that  a  mortgagee  who  does  not  demand  payment 
when  the  debt  becomes  due,  but  allows  it  to  run  on,  is  after- 
wards entitled  to  notice  from  the  debtor  of  his  intention  to  make 
payment,  six  months  in  advance  of  the  time  of  payment ;  or  if 
such  notice  be  not  given,  then  he  is  entitled  to  six  months'  inter- 
est in  lieu  of  the  notice.^  The  reason  of  this  rule  is  said  to  be 
that  the  mortgagor  having  lost  his  estate  at  law,  and  being  only 
entitled  to  redeem  in  equity,  must  do  equity,  by  allowing  the 
mortgagee  a  reasonable  time  to  reinvest  his  money.^  The  rule 
of  course  does  not  apply  where  the  mortgagee  himself  demands 

1  Ilaiinum  v.  Walliice,  4  Humph.  (Tenn.)         *  Smith  v.  Vincent,  15  Conn.  1. 

143.  6  Slayton  v.  Mclntyre,  11  Gray  (Mass.) 

2  Grover  V.  Flye,  5  AHen  (Mass.),  543;  271  ;  Wade  v.  Howard,  11  Pick.  (Mass.) 
Bartlett  v.  Tarhell,  12  Allen  (Mass.),  123,  289,  297  ;  Gray  v.  Jenks,  3  Mason,  520; 
126;    Forster  v.   Mellen,    10    Mass.  421;  Howard  y.  Howard,  3  Met.  (Mass.)  548. 
Stewart  v.  Crosby,  50  Me.  130;  Pillsburj         '^  Browfic  v.  Lockhart,  10  Sim.  424,  per 
V.  Smith,  25  Me.  427.  Shadwell,  V.  C.  ;  Bartlett  v.  Franklin,  15 

8  Howe  V.  Lewis,  14  Pick.  (Mass.)  329.       W.  R.  1077. 

*  Dyer  v.  Toothaker,  51  Me.  380.  »  Fisher  on  Mort.  3d  ed.  §  1272. 

5 


§  891.]  PAYMENT    AND   DISCHAUGE. 

payment  or  talcos  any  proceedings  to  (Miforee  his  deinaiul.  Neither 
does  it  aj^ply  wlien  he  comes  in  and  proves  his  debt  in  any  pro- 
bate or  bankruptcy  proceedings  ;  ^  nor  where  the  security  is  dis- 
eharfred  in  the  natural  course  of  business  without  the  active  in- 
terferenoe  of  the  debtor,  out  of  other  security  held  for  the  same 
debt,  as,  for  instance,  by  the  payment  of  a  loss  upon  an  insurance 
policy.  When  the  time  of  notice  has  expired  the  mortgagee  is 
bound  to  know  the  amount  due  him,  and  to  accept  a  proper  ten- 
der of  it.^  He  may,  however,  be  justified  in  a  qualified  refusal  of 
a  tender,  although  it  be  of  the  proper  amount,  as,  for  instance, 
when  it  is  accompanied  by  a  deed  of  reassignment  to  be  executed 
by  him  containing  covenants  on  his  part ;  and  he  is  entitled  to 
a  reasonable  time  to  be  advised  whether  it  is  proper  for  him  to 
execute  the  deed,  and  the  draft  of  it  should  have  been  submitted 
to  him  beforehand.  Lord  Hardwicke  in  such  a  case  thought  a 
week's  additional  time  and  interest  should  be  allowed.^ 

No  such  rule  of  practice  exists  in  this  country,  though  there 
may  be  local  customs  in  regard  to  such  notice.  Provision  is  some- 
times made  in  the  mortgage  itself,  or  by  a  separate  instrument, 
that  a  certain  notice  shall  be  given  by  the  mortgagor  when  the 
mortgage  is  allowed  to  run  after  its  maturity. 

891.  At  common  law  a  tender  made  at  the  law  day  and 
refused  satisfies  the  condition  of  the  mortgage  as  fully  as  if  pay- 
ment had  been  made,  and  revests  the  estate  in  the  mortgagor, 
who  may  reenter  forthwith.  But  if  the  mortgage  secures  a  debt, 
this  subsists  as  a  personal  duty  after  the  estate  is  divested  by  the 
tender,  and  may  be  recovered  as  a  personal  obligation  by  an  ac- 
tion at  law.  If,  however,  the  mortgage  secures  a  gift  which  is 
not  a  debt,  the  gift  is  lost  with  the  estate.*     The  discharge  of  this 

1  Matson  v.  Smith,  5  Jur.  645.  the  money  is  of    this  quit,  and  fully  dis- 

2  Harmer   v.   Priestley,    16  Beav,  569 ;     charged  for  ever  afterwards."    209  6. 

22  L.  J.  N.   S.  Ch.   1041;    Sharpnell  v.  Coke,  commentin<r :  "This  is  to  be  un- 

Blake,  2  Eq.  Ca.  Abr.  604.  derstood,  that  he  that  ought  to  tender  the 

8  Wiltshire  v.  Smith,  3  Atk.  89;  Wil-  money  is   of  this  discharged  for  ever  to 

shaw  V.  Smith,  9  Mod.  441.  make  any  other  tender;  but  if  it  were  a 

*  Darling  v.  Cliapman,    14  Mass.  101,  dutie  before,  tbv,ugh  the  feoff er  enter  by 

104;  Maynard  v.  Hunt,  5  Pick.   (Mass.)  force  of  the  condition,  yet   the   debt  or 

240  ;  Willard  v.  Harvey,  5  N.  H.  252.  dutie   remaineth.     As  if  A.  borroweth  a 

Littleton  :  "  And  note,  that  in  all  cases  hundred  pound  of  B.  and  after mortgageth 

of  a  certain   summe   in  grosse    touching  land   to  B.  upon   condition  for  payment 

lands  or    tenements,  if  lawful  tender  be  thereof;  if  A.  tender  the  money  to  B.  and 

once  refused,  he   which  ought  to  tender  he  refuseth  it,  A.  may  cuter  into  the  hind, 

6 


TENDER   BEFORE   AND    AFTER   DEFAULT.  [§  892. 

is  an  accidental  consequence  of  the  tender,  there  being  no  debt  or 
dut}'^  remaining  whereon  to  ground  an  action. 

892.  A  tender  of  the  amount  due  on  a  mortgage  after 
breach  of  the  condition  does  not  operate  as  a  discharge  at  com- 
mon hiw.i  The  tender  must  be  kept  good,  to  avail  anything.^ 
The  appropriate  office  of  a  tender,  then,  is  to  relieve  the  debtor 
from  subsequently  accruing  interest,  to  preserve  the  right  of  re- 
demption, or  to  protect  him  from  the  costs  of  a  suit  to  redeem. 
"  But  a  tender,"  says  Mr.  Justice  Depue  in  a  recent  case  before 
the  Court  of  Errors  of  New  Jersey ,3  "  though  it  is  equivalent  to 
performance,  where  the  question  is  whether  the  party  is  in  de- 
fault, is  not  a  satisfaction  or  an  extinguishment  of  a  debt.  Ten- 
der of  the  mortgage  debt  on  the  day  named  is  performance  of 
the  condition,  and,  by  force  of  the  terms  of  the  condition,  deter- 
mines the  estate  of  the  mortgagee,  and  the  condition  being  com- 
plied with,  the  land  reverts  to  the  mortgagor  by  the  simple 
operation  of  the  condition."  And  yet  in  New  Jersey  payment 
operates  as  an  extinguishment  of  the  mortgage  debt,  this  being 
regarded  as  the  principal  and  the  security  the  accessory  ;  and 
therefore  whatever  discharges  the  debt  is  held  to  discharge  the 
security.  But  no  reason  founded  on  principle,  declares  the  judge 
just  quoted,  can  be  assigned  for  giving  that  effect  to  a  tender  after 
forfeiture.  "  Where,  as  in  this  case,"  he  says,  "  the  mortgage  is 
accompanied  by  a  bond,  to  hold  that  a  tender  after  default  extin- 
guished the  mortgage,  for  the  reason  that  after  such  default  it 
remains  only  a  security  for  the  debt,  will  lead  to  the  incongruity 
of  giving  to  the  tender  an  effect  with  respect  to  the  security 
which,  by  the  rules  of  pleading  and  established  principles  of  law, 
the  court  must  deny  in  an  action  on  the  bond,  which  is  the  im- 
mediate evidence  of    the  debt.     If  the  form   of  the   instrument 

and  the  land  is  freed  for  ever  of  the  condi-  cases  of   like  nature  to  be  understood." 

tion,  but  yet  the  debt  reraaineth,  and  may  Sec.  338. 

be  recovered  by  action  for  debt.     But  if  i  See   §   9 ;    Currier   v.   Gale,  9  Allen 

A.  without  any  loane,  debt,  or  dutie  pre-  (Mass.),  522;  Maynard  v.  Hunt,  5  Pick, 
ceding,  infeoffe  B.  of  land  upon  condition  (Mass.)  240;  Holman  v.  Bailey,  3  Met. 
for  the  payment  of  a  hundred  pounds  to  (Mass.)  55  ;  Erskine  v.  Tcwnscnd,  2  Mass. 

B.  in  nature  of  a  gratuitie  or  gift ;  in  that  493  ;  Phelps  v.  Sage,  2  Day  (Conn.),  151  ; 
case  if  he  tender  the  hundred  pound  to  Shields  u.  Lozear,  34  N.  J.  L.  496  ;  Howell 
him  according  to  the  condition,  and  he  re-  v.  MitchSll,  68  Me.  21  ;  Story  v.  Krewson, 
fuseth  it,  B.  hath   no  remedie  thereafter,  55  Ind.  397. 

and  so  is  our  author  in  this  and  in  his  other         ^  Crain  v.  McGoon,  86  111.  431. 

8  In  Shields  v.  Lozear,  supra. 

7 


§  893.]  PAYMENT   AND  DISCHARGE. 

which  evidences  the  debt  is  overlooked,  and  the  question  viewed 
in  the  aspect  in  which  the  indebtedness  immediately  arose,  the 
tender  does  not  pay  or  discharge  the  debt ;  and  though  it  will 
avail  to  arrest  the  accruing  of  interest,  and  to  free  the  debtor 
from  costs,  it  will  be  deprived  of  that  efficacy  by  a  subsequent  de- 
mand and  refusal.  If  legal  analogy  is  to  be  pursued,  it  could  lead 
no  further  than  to  deprive  the  mortgage  of  operation  beyond  the 
amount  due  when  the  tender  was  made,  leaving  the  question  of 
subsequently  accruing  interest  and  costs  to  be  raised  by  the  sub- 
sequent demand  and  refusal." 

893.  The  rule  in  New  York  and  Michigan,  however,  is  that 
a  tender  of  the  amount  due  on  a  mortgage  after  the  day  fixed  for 
payment  is  a  discharge  of  the  lien  just  as  much  as  payment  is, 
and  in  the  same  way  that  a  tender  at  common  law  made  upon  the 
day  named  in  the  condition  for  payment  has  this  effect.^  The 
lien  of  the  mortgage  is  thereby  ipso  facto  discharged,  and  the 
holder  of  the  mortgage  can  only  look  to  the  personal  responsi- 
bility of  the  person  liable  for  the  mortgage  debt.  To  have  this 
effect  it  is  not  even  necessary  that  the  money  should  be  brought 
into  court,  or  that  it  should  be  shown  that  the  tender  has  ever 
since  been  kept  good.^  This  view  of  the  effect  of  a  tender  made 
after  the  law  day  is  founded  upon  the  departure  made  from 
the  common  law  doctrine,  that  the  mortgage  creates  an  estate  in 
fee  in  the  mortgagee,  subject  to  be  defeated  by  performance  of 
the  condition  ;  the  mortgage  being  regarded  merely  as  a  pledge 
of  the  land  of  which  the  mortgagor  remains  the  owner,  the  ten- 
der after  breach  of  the  condition  is  regarded  as  having  the  same 
result  as  a  tender  made  in  case  of  a  pledge  of  personal  property, 
in  respect  to  which  the  rule  is,  that  a  tender  and  refusal  at  any 
time  of  the  full  amount  of  the  debt  extinguishes  the  lien  of  the 
pledge.'^ 


1  Kortright  V.  Cady,  21  N.  Y.  343  ;  re-  the  day  is  provided  for  by  statute.     But 

versing  S-.  C.  23  Barb.  490;    S.  C.  5  Abb.  in     making   tender   the   money  must   be 

(N.  Y.)   Pr.  358;  Jackson  v.  Crafts,   18  brought  into  court. 

Johns.  (N.  Y.)  110;  Edwards  i-.  Farmers'  ^  Kortright   v.   Cady,  supra;    Potts  v. 

F.  Ins.  &  Loan  Co.  21  Wend.  (N.Y.)  467;  Plaisted,   30    Mich.    149;     iVIoynahau   v. 

S.  C.  26  lb.  541 ;  Houbie  v.  Volkening,49  Moore,  9  Mich.  9  ;  Caruthersw.  Humphrey, 

How.  (N.  Y.)  Pr.   169;    Hartleys.   Tat-  12  Mich.  270  ;  Van  Husan  y.  Kanouse,  13 

ham,  1  Keyes  (N.  Y.),  222  ;  Bailey  r.  Met-  Mich.  303  ;  Arnot  v.  Post,  6  Hill  (N.  Y.), 

calf,  6  N.  H.  156  ;  Robinson  v.  Leavitt,  7  62  ;  reversed  in  2  Denio,  344. 

N.  H.  73,  93  ;  Swett  v.  Horn,  1   N.  H.  »  Comyn's  Dig.  tit.  Mort.  A. ;  Coggs 

332.     In  New  Hampshire  payment  after  v.  Bernard,  2  Lord   Ray.  909.  per  Holt, 

8 


TENDER   BEFORE   AND   AFTER   DEFAULT.  [§  893. 

As  to  the  embarrassments  which  some  judges  have  thought 
would  attend  the  adoption  of  this  rule,i  Mr.  Justice  Davies,  in  the 
Court  of  Appeals  of  New  York,^  says :  "  If  the  mortgagor  does 
not  tender  the  full  amount  due,  the  lien  of  the  mortgage  is  not 
extinguished.  The  mortgagee  runs  rio  risk  in  accepting  the  ten- 
der. If  it  is  the  full  amount  due,  his  mortgage  lien  is  extinguished 
and  his  debt  is  paid.  This  is  all  he  has  a  right  to  demand  or 
expect,  and  all  he  can  in  any  contingency  obtain.  His  acceptance 
of  the  money  tendered,  if  inadequate  and  less  than  the  amount 
actually  due,  only  extinguishes  the  lien  pro  tanfo,  and  the  mort- 
gage remains  intact  for  the  residue.  A  much  greater  hardship 
might  be  imposed  and  serious  injury  be  produced  by  holding  that 
the  mortgagor  cannot  extinguish  the  lien  of  the  mortgage  by  a 
tender  of  the  full  amount  due.  It  has  never  occurred  to  any  judge 
to  argue  that  a  pawnee  was  in  great  peril,  and  in  danger  of  losing 
the  benefit  of  his  pawn,  by  the  enforcement  of  the  well  settled 
rule,  that  a  tender  of  the  amount  of  the  loan  and  interest,  and  re- 
fusal, extinguished  the  lien  on  the  pawn.  Littleton  well  says,^ 
that  it  shall  be  accounted  a  man's  folly  that  he  refused  the  money 
when  a  lawful  tender  of  it  was  made  to  him.  The  only  effect  upon 
the  rights  of  the  mortgagee  is,  that  the  land  or  thing  pledged  is 
released  from  the  lien,  but  the  debt  remaineth."  This  rule,  how- 
ever, has  given  occasion  to  much  litigation,  and  sometimes  to  the 
working  of  great  injustice. 

The  same  distinction  is  taken  under  this  rule  that  prevails  at 

C.  J. ;  Kortright  v.  Cady,  21  N.  Y.  343,  Kortright  v.  Cady.      The  tendency  since 

per  Davies,  J.  that  time  has  been  to  restrict  and  limit  the 

The  history  of  this   doctrine   in   New  doctrine  rather  than  to  extend  it.      Harris 

York  shows  considerable  shifting  back  and  ?;.  Jex,  66  Barb.  (N.  Y.)  232;    55   N.  Y. 

forth  before  it  finally  became  settled  law  421  ;    Graham   v.  Linden,  50  N.  Y.  547 ; 

by  the  decision  of  Kortright  v.  Cady.     It  Frost  i^.  Yonkers   Sav.  Bank,  8  Hun   (N. 

was  first  asserted  in  Jackson  v.  Crafts,  18  Y.),  26  ;  70  N.  Y.  553. 

Johns.  110;  and  it  is  declared  the  decision  ^  See  Merritt  v.  Lambert,  7  Paige   (N. 

was  founded  on  a  misapprehension  of  Lit-  Y.),  344;  Edwards  v.  Farmers'  F.  Ins.  & 

tleton,  207  a,  209  6.     It  was  then  denied  by  Loan  Co.  21  Wend.  (N.  Y.)  467;  26  lb. 

the  Chancellor  in  Merritt   v.  Lambert,  7  541. 

Paige,  344,  and  reaflSrmed  in  the  Supreme  ^  Kortright  t>.  Cady,  21  N.  Y.  343,  353, 
Court  in  I-ldwards  v.  Farmers'  Fire  Ins.  &  which  see  for  a  very  full  and  able  discus- 
Loan  Co.  21  Wend.  467,  and  in  the  Court  sion  of  the  whole  subject  of  the  tender  of 
of  Errors  in  the  same  case,  26  Wend.  .541  ;  a  mortgage  debt. 

and  then  by  the  Supreme  Court  in  Arnot  v.  »  Litt.  2(^7  a.      "  Because  it  shall  be  ac- 

Post,  6  Hill,  65  ;  and  again  denied  by  the  counted  his  own  folly  that  he  refused  the 

Court  of  Errors,  in  reversing   this  case,  money,   when   a  lawful  tender  of  it  was 

2  Denio,  344.     It  was  finally  set  at  rest  in  made  unto  him." 

9 


§  804.]  PAYMENT    AND   DISCHARGE. 

common  Liw,  that  when  the  mortgage  is  given  to  secure  a  debt 
that  is  not  discharged  b}-  the  tender,  though  when  it  secures  a 
gift  all  remedy  to  recover  the  sum  secured  is  gone.  It  is  estab- 
lished b)^  the  authorities  that  when  the  only  effect  of  the  tender 
is  to  extinguish  the  lien,  it  is  not  necessary  to  follow  up  the  ten- 
der with  the  averment  of  touts  temps  prist  and  with  bringing  the 
money  into  court ;  ^  but  that  when  the  tender  operates  to  dis- 
charge the  debt  or  sum  owing,  such  averment  and  payment  of 
money  into  a  court  is  essential  to  a  good  plea  of  tender.^ 

But  this  rule  is  limited  in  its  opei-ation  to  defences  to  the  en- 
forcement of  the  mortsrajre.  It  does  not  avail  a  mortgagor  who 
seeks  a  discharge  of  his  mortgage  ;  for  when  he  seeks  relief  in  a 
court  of  equity  he  must  do  equity,  and  must  pay  the  mortgage 
debt.  The  tender  then  avails  merely  to  stop  the  interest  and  not 
to  discharge  the  debt.^  Moreover,  one  designing  to  make  a  ten- 
der with  the  purpose  of  insisting,  in  case  of  refusal,  that  the  mort- 
gage lien  is  discharged,  is  bound  to  act  in  a  straightforward  way 
and  distinctly  and  fairly  make  known  his  true  purpose,  without 
mystery  or  ambiguity,  and  allow  reasonable  opportunity  for  in- 
telligent action  by  the  holder  of  the  mortgage.^ 

The  mortgagor  by  his  subsequent  acts  and  dealings  may  waive 

his  tender,  and  he  does  this  by  afterwards  accepting  a  discharge, 

though  saying  at  the   time  that  he  would  take  his   own  time  to 

.pay;   for  he  thereby  recognizes  the  mortgagee's  right  to  demand 

and  receive  the  debt.^ 

894.  Questions  relating  to  the  sufficiency  of  tenders  are 
perhaps  of  less  frequent  occurrence  in  this  country  than  in  Eng- 
land, chiefly  for  the  reason  that  custom  has  there  established  the 
rule,  that  after  the  day  of  payment  has  passed  the  mortgagee  is 
entitled  to  six  months'  notice  of  payment,  or  to  interest  for  that 
period  in  lieu  of  notice  ;  while  here  no  such  general  rule  prevails. 
And  if  there  be  any  doubt  in  regard  to  the  sufficiency  of  a  tender 

1  Kortright  v.  Cady,  21  N.  Y.  343,  354 ;  in  a  plea  of  tender  ;  saying  it  was  expressly 
Hunter  v.  LeConte,  6  Cow.  (N.  Y.)  728.  decided  to  be  necessary  in  Giles  v.  Hartis, 

2  Giles   V.   Hartis,    1    Lord   Ray.   254  ;  and  was  one  of  those  landmarks  in  plead- 
Hume  i;.  Pcploe,  8  East,  168.      In  the  lat-  ing  that  ought  not  to  be  departed  from, 
ter  case  Lord  Ellenborough,  C.  J.,  stopped         3  Cowles  v.  Marble,  37  Mich.  158. 

the  counsel  who  was  to  have  argued  in  ^  Proctor  v.  Robinson,  35  Mich.  284  ; 

support  of  the  tender,  and  asked  if  he  could  Frost  v.  Yonkers  Savings  Bank,  70  N.  Y. 

show  any  case  where  an  averment  of  touts  553. 

temps  prist  was  holden  not  to  be  necessary  o  pry  j,_  Russell,  35  Mich.  229. 

10 


TENDER   BEFORE   AND   AFTER   DEFAULT.  [§  895. 

that  has  been  made,  there  is  generally  no  difficulty  in  the  way  of 
making  a  new  tender  without  material  loss ;  and  proceedings  for 
redemption  may  generally  be  commenced  at  any  time,  either  with 
or  without  a  previous  tender. 

Questions  of  tender,  however,  assume  great  importance  in  those 
states  where  the  effect  of  the  tender  is  wholly  to  discharge  the 
mortgage  lien,  especially  where  the  rule  is  also  established  that  a 
tender  may  have  this  effect  even  when  the  tender  is  not  kept  good 
by  a  payment  into  court,  or  by  constantly  and  at  all  times  having 
the  money  ready  to  pay  over. 

A  tender  is  not  kept  good,  when  after  making  the  tender  the 
party  deposited  the  money  to  his  own  use  in  a  bank,  and  a  part  of 
the  sura  was  afterwards  drawn  out,  and  it  was  not  shown  that 
other  money  was  kept  ready  to  supply  its  place  when  called  for.i 

The  conduct  of  the  mortgagee  may  be  such  as  to  exonerate  the 
debtor  from  making  a  tender,  as,  for  instance,  when  it  shows  con- 
clusively that  a  proper  tender  would  not  be  accepted.^  But  a 
mere  claim  of  more  than  is  really  due  does  not  have  this  effect ; 
because  the  creditor  may,  upon  the  tender  being  actually  made, 
accept  the  amount.^ 

A  tender  will  be  without  avail  either  to  discharge  the  lieu  or  to 
stop  the  running  of  interest,  or  to  avoid  liability  for  costs,  unless 
it  be  for  the  whole  amount  of  the  mortgage  debt,^  and  be  made 
unconditionally.^  This  rule  is  not  affected  by  the  fact  that  only 
a  portion  of  the  amount  due  belongs  to  the  holder  of  the  mort- 
gage, and  the  balance  to  some  other  person  for  whom  he  holds 
the  mortgage  in  trust,^  or  that  the  mortgagee  has  received  rents 
and  profits  for  which  he  ought  to  account,  but  the  amount  of 
which  has  not  been  adjusted.'^ 

A  junior  incumbrancer  having  the  right  to  redeem  may  make 
a  tender  with  the  same  effect  that  the  mortgagor  himself  might 
make  it.^ 

895.  Who  may  make  a  tender.  —  The  mortgagor  not  only 

1  Grain  v.  McGoon,  86  111.  4.31.  *  Graham  v.  Linden,  50  N.  Y.  547. 

2  Scarfe  v.   Morgan,  4    M.  &  W.  270;  ^  Sager  v.  Tuppcr,  35  Mich.  134. 
Kerford  v.  Mondel,  28  L.  J.  Ex.  303  ;  At-  '^  Graham  v.  Linden,  supra. 
kinson  v.  Morrissy,  3  Oregon,  332  ;    Van-  ''  Bailey  v.  Metcalf,  6  N.  H.  156. 
pelU.  Woodward,  2   Sandf.   (N.  Y.)  Ch.  ^  Dings   y.    Parsnall,  7    Hun    (N.   Y.), 
143.  522;    Frost  v.  Yonkers  Sav.  Bank,  8  lb. 

8  Ashraole  r.  Wainwright,  2  Q.  B.  837 ;  26  ;  70  N.  Y.  553 ;  Sager  v.  Tupper,  35 
Allen  V.  Smith,  12  C.  B.  N.  S.  638.  Mich.  134. 

11 


§  896.]  PAYMENT   AND   DISCHARGE. 

while  he  remains  tlio  owner  of  the  mortgaged  estate,  but  as  well 
after  he  has  sold  it,  has  the  right  to  pay  the  mortgage  debt  and 
I'equire  satisfaction;^  and  of  course  the  debt  being  his  he  can 
make  a  good  tender  of  payment.  One  wlio  has  purchased  the 
property  subject  to  the  mortgage,  and  assumed  the  payment  of  it, 
has  of  course  the  same  right,  for  he  has  thus  made  the  debt  his 
own.  But  it  has  been  questioned  whether  a  grantee  who  has 
merely  bought  the  equity  of  redemption  subject  to  the  mortgage, 
without  incurring  any  personal  liability  in  respect  to  it,  has  the 
right  to  discharge  the  lien  by  a  tender.  It  is  claimed  that  he  has 
merely  a  right  to  redeem  the  land.^  "  But  how  is  the  land  to 
be  redeemed  from  the  lien  of  the  mortgage  ?  "  asks  Mr.  Justice 
Learned  in  the  case  cited.  "  Not,  I  suppose,  by  a  mere  tender 
which  is  not  kept  good,  but  by  actual  payment,  or  by  bringing 
the  money  into  court  for  the  purpose  of  payment.  Tiie  mere 
owner  of  the  equity  of  redemption  owes  no  debt.  It  cannot  be 
said  in  respect  to  him,  as  it  is  said  in  Kortright  v.  Cady^  '  the 
creditor  by  refusing  to  accept  does  not  forfeit  his  right  to  the 
very  thing  tendered,  but  he  does  lose  all  collateral  benefits  and 
securities.'  For  the  creditor,  if  he  refuses  to  take  the  money  from 
the  owner  of  the  equity  of  redemption,  cannot  recover  it  from 
him.  It  is  the  redemption  of  a  lien,  not  the  payment  of  a  debt, 
which  his  tender  is  to  accomplish.  There  is  no  debt,  at  least 
from  him,  and  therefore,  as  it  seems  to  me,  his  mere  tender  does 
not  discharge  the  mortgage  lien.  He  has  the  right  to  redeem,  but 
he  must  redeem  by  actual  payment." 

896.  A  tender  must  be  made  to  a  person  authorized  to 
receive  payment.  It  must  in  general  be  made  to  the  person  who 
has  the  legal  estate  and  the  right  to  reconvey,  or  to  enter  satis- 
faction of  the  mortgage.^  If  the  mortgage  has  been  assigned,  and 
the  debtor  has  actual  or  constructive  notice  of  the  assignment, 
the  tender,  to  be  effectual,  must  be  made  to  the  assignee.*  An 
agent  or  attorney  may  have  authority  to  receive  payment,  al- 
though he  cannot  discharge  the  mortgage ;  but,  on  the  other  hand, 
although  he  may  be  authorized  to  demand  payment,  he  may  have 

1  Blim  V.  Wilson,  5  Phi).  (Pa.)  78.  3  See  Van  Buren  v.  Olmstead,  5  Paige 

2  Harris  v.  Jex,  66  Barb.  (N.  Y.)  232.     (N.  Y.),  9. 

The  Court  of  Appeals,  .5.5  N.  Y.  421,  de-        *  Dorkray  v.  Noble,  8  Me.  278. 
cided  the  case  upon  another  point  and  de- 
clined to  pass  upon  this. 

12 


TENDER    BEFORE   AND   AFTER   DEFAULT.  [§  897. 

no  authority  to  receive  it,  in  which  case  a  tender  to  him  would 
not  be  effectual.  A  mortgagee  having  received  at  his  residence 
outside  the  city  of  New  York  a  check  on  a  bank  in  the  city  for 
the  amount  of  an  instalment  of  interest,  brought  the  check  to 
the  city  and  left  it  with  his  attorney  and  requested  him  to  return 
it  to  the  mortgagor.  The  attorney  returned  it  by  letter,  stating 
that  the  mortgagee  would  not  receive  payment  by  check,  and 
notifying  him  that  unless  the  interest  should  be  paid  in  full  at 
once  he  was  instructed  to  foreclose  the  mortgage.  The  day  after 
the  receipt  of  the  letter,  the  mortgagor  tendered  the  amount  of 
the  interest  to  the  attorney,  who  then  stated  that  he  had  no  au- 
thority to  receive  the  interest,  and  that  this  must  be  paid  to  the 
mortgagee  at  his  residence.  The  tender  was  held  to  be  invalid, 
and  the  principal  having  become  due  in  consequence  of  the  non- 
payment of  the  interest  for  a  period  of  thirty  days  after  it  became 
due,  the  court  refused  to  relieve  him  from  the  forfeiture. ^ 

If  the  debtor  has  no  knowledge  that  the  mortgage  has  been 
assigned,  he  may  make  a  tender  to  the  mortgagee  ;  and  although 
the  mortgage  has  at  the  time  been  in  fact  assigned,  the  tender, 
according  to  some  authorities,  would  be  effectual  even  to  extin- 
guish the  lien  ;2  but  it  would  seem  that  if  a  payment  to  the 
mortgagee  would  not  be  good,  a  tender  would  not  be  good  ;  and 
that  inasmuch  as  the  debtor,  not  finding  the  bond  or  note  in  the 
mortgagee's  possession,  is  put  upon  inquiry  as  to  his  authority  to 
receive  payment,  and  is  even  chargeable  with  knowledge  of  fraud 
if  he  goes  on  and  makes  it,  a  tender  to  him  when  he  had  not 
possession  of  the  evidence  of  the  debt  would  be  bad. 

897.  Place  of  payment  or  tender.  —  As  a  general  rule,  when 
the  mortgage  or  the  accompanying  securit}'^  does  not  appoint  any 
place  at  which  the  principal  or  interest  is  to  be  paid,  the  debtor 
is  bound  to  seek  the  creditor  to  make  his  payments.^     A  place  of 

1  Grussy  v.  Schneider,  50  How.  (N.  Y.)  Littleton,  212  a,  saith  :    "And   there- 

Pr.  134.  fore  it  wil  be  a  good  and  sure  thing  for 

*  Hetzell  V.   Barber,   6    Hun    (N.   Y.),  him    that  will   make    such   feoffment  in 

534.     In  Reed  v.   Marble,    10   Paige  (N.  mortgage,  to  ajjpoint  an   espcciall  place 

Y.),  409,  the  mortgagee  had  possession  of  wliero  the  money  shall  be  payd,  and  the 

the  bond  and  mortgage  as  agent  of  his  as-  more  speciall  that  it  bee  i)ut,  the  better  it 

signee,  although  this  assignee  had  without  is  for  the  feoffor.     As  if  A.  infeoffe  B.  to 

his  knowledge  assigned  them  to  another.  have  to  him  and  to  his  heires,  upon  such 

8  Harris  v.  Mulock,  9  How.  (N.  Y.)  Pr.  condition  that  if  A.  pay  to  B.  on  the  Feast 

402  ;  Smith   v.  Smith,  25  Wend.   (N.  Y.)  of  Saint    Michael  the   Arch-Angcll   next 

405.  coming,  in  the  cathedrall  church  of  St. 

13 


§  ^^07.] 


PAYMENT    AND   DISCHARGE. 


payment  named  in  the  deed  relates  in  strictness  to  the  time  of 
payment  there  mentioned,^  and  afterwards  a  personal  tender  is 
generally  necessary. 

A  personal  tender  may  be  excused  when  the  mortgagee  has 
shown  by  his  conduct  or  declarations  that  he  means  to  avoid  a 
tender.'^  In  Gi/Ies  v.  Hall,  reported  by  Peere  Williams,^  it  ap- 
peared that  on  the  day  before  the  25th  of  March,  1722,  the  mort- 
gagor gave  personal  notice  in  writing  to  the  defendant,  the  mort- 
gagee, that  he  would  tender  the  money  and  interest  between  the 
hours  of  ten  and  twelve  in  the  morning,  at  Lincoln's  Inn  Hall,  on 
the  25th  of  September,  1722,  which  was  accordingly  done.  "  Ob- 
Paul's  in  London  within  foure  houres  next  now  I  will  come  and  redeem  the  mortgage, 
before  the  hour  of  noon  of  the  same  Feast,  The  mortgagee  said  to  him,  he  would  hold 
at  the  Rood  loft  of  the  Rood  of  the  North  the  mortgaged  premises  as  long  as  he 
doore  within  the  same  church,  or  at  the  could ;  and  then  when  he  could  hold  them 
toiube  of  saint  ErkenwalJ,or  at  the  doore  no  longer,  let  the  devil  take  them  if  he 
of  such  a  chappell,  or  at  such  a  pillar,  would.  And  afterwards  the  mortgagor 
within  the  same  church,  that  then  it  shal  went  to  the  mortgagee's  house  with  money 
be  lawfuU  to  the  aforesaid  A.  and  his  more  than  sufficient  to  redeem  the  mort- 
heirs  to  enter,  &c. ;  to  this  case  he  needeth  gage,  and  tendered  it  there  ;  but  it  did 
not  to  seek  the  feoffee  in  another  place,  not  appear  that  the  mortgagee  was  within 
nor  to  bee  in  any  other  place,  but  in  the  or  that  the  tender  was  made  to  him  ;  and 
place  comprised  in  the  indenture,  nor  to  it  was  decreed  a  redemption,  and  the  de- 
bee  there  longer  than  the  time  specified  in  fendant  to  have  no  interest  from  the  time 
the  same  indenture,  to  tender  or  pay  the  of  the  tender,  because  of  his  wilfulness." 
money  to   the   feoffee,"   &c.     And   Coke         Mr.  Fisher,  referring  to  this  case,  but  not 


thereupon:  "Here  is  good  counscU  and 
advice  given,  to  set  downe  in  conveyances 
everything  in  certaintie  and  particularitie, 
for  certaintie  is  the  mother  of  quietnesse 


quoting  the  language  of  it,  after  saying 
that  a  tender  may  be  sufficient  when  made 
at  the  mortgagee's  house  in  his  absence, 
adds:    "But  this  it  is  presumed  can   be 


and  repose,  and  incertaintie  the  cause  of  only  done  under  i)articular  circumstances, 

variance  and  contentions  ;  and  for  obtain-  as    where   the   mortgagee    is    deliberately 

ing  of  the  one,  and  avoiding  of  the  other,  keeping  out  of  the  way  to  avoid  the  ten- 

the  best  mcane  is,  in  all  assurances,  to  der;  or,  as  it  happened  in  a  case  where 

take  counsell  of  learned  and  well  experi-  there   was   evidence   that   the   mortgagee 

enced  men,  and  not  to  trust  onely  without  had  expressed  a  determination  to  hold  the 

advice  to  a  precedent.     For  as  the  rule  is  property  as  long  as  he  could,  and   after 

concerning  the  state  of  a  man's  bodie,  Nul-  that  to  transfer  it  to  a  particular  friend  of 

lum  medicamentuin  est  idem  omnibus,  so  in  Ins  own."     Mort.  2d  vol.  3d  ed.  790.    The 

the  state  and  assurance  of  a  man's  land,  gravity  of  Mr.  Fisher's  work  might  have 

Nullum  exemplum  est  idem  omnibus."  been  too  much   disturbed  by  placing  the 

1  Sharpnell  y.  Blake,  2  Eq.  Ca.  Abr.  604.  case  and  his  version  of  it  together;    and 

2  Manning  v.  Burges,  1  Cas.  in  Ch.  29.  go  therefore  the  grim   humor  of  his  coiu- 
The  following  is  the  report  of  a  ca.se  be-  jmjnt  is  altogether  latent. 

fore  the  Master  of  the  Rolls  in  the  15th  3  2  P.  Wms.  378.  The  bill  was  to  corn- 
year  of  Charles  II. :  "  A  mortgage  was  pel  a  reassignment  of  a  mortgage  for 
forfeited ;  the  mortgagor  afterwards  meet-  £i,000,  and  to  stop  the  payment  of  inter- 
ing  the  mortgagee,  said,  I  have  moneys,  q^^_ 

14 


TENDER   BEFORE   AND   AFTER   DEFAULT.       [§§  898,  899. 

jection  by  Solicitor  General  Talbot :  Lincoln's  Inn  Hall  is  not 
named  in  the  proviso  in  the  mortgage  deed  as  the  place  for  the 
payment  of  the  money,  and  therefore  the  tender  must  be  to  the 
person.  Lord  Chancellor  :  The  money  being  lent  in  town,  and 
after  personal  notice  given  for  the  payment  thereof,  and  no  objec- 
tion made  by  the  mortgagee  to  the  place  at  the  time  of  the  notice, 
it  would  be  very  hard  to  make  the  mortgagor  travel  with  this 
great  sum  of  money  to  Oxford,  where  the  mortgagee  lived." 

The  rule  was  long  ago  established  in  England,  that  the  debtor 
is  not  bound  to  follow  his  creditor  beyond  the  four  seas  to  make 
a  tender.  The  same  rule  prevails  in  this  country,  the  debtor  not 
benig  bound  to  seek  his  creditor  to  make  a  tender  beyond  the 
limits  of  the  state.  When  a  mortgagee  has  removed  from  the 
state,  and  left  no  one  within  it  to  receive  the  interest  and  instal- 
ments as  they  become  due,  the  mortgagor  is  relieved  from  any 
obligation  to  make  a  tender.^ 

A  mortgage  which  provides  no  place  of  payment  is  presumed 
to  be  payable  in  the  state  where  it  was  made  when  the  parties 
reside  in  the  state.^ 

898.  The  tender  may  be  made  at  any  time  of  the  day,  unless 
some  hour  has  been  fixed  upon  by  agreement  of  the  parties  or  by 
notice ;  in  which  case  an  attendance  at  any  time  within  the  hour 
following  the  time  named  continued  to  the  end  of  the  hour  is 
sufficient.^ 

899.  It  is  a  settled  rule  that  interest  will  cease  to  run  from 
the  time  of  tender,  when  the  money  really  due  upon  the  mort- 
gage is  actually  and  properly  tendered  by  a  person  having  the 
right  to  make  the  tender,  so  that  the  mortgagee  is  bound  to  ac- 
cept it.*  If  the  tender  be  refused,  the  person  making  the  tender 
must  keep  the  money  continually  ready  to  be  paid  over  in  case  the 
mortgagee  should  subsequently  conclude  to  accept  it.  Neither 
should  he  make  any  profit  out  of  it  afterwards.  "  It  ought  to  ap- 
pear," said  the  Lord  Chancellor,  as  reported  by  Peere  Williams 
in  an  early  case,^  "  that  the  mortgagor  from  that  time  always  kept 

1  Houbie  v.  Volkening,  49  How.  (N.  *  Columbian  Building  Ass'n  v.  Crump, 
Y.)  Pr.  169.  42  Md.  192. 

2  Houbie  v.  Volkening,  supra.  ^  Gyles  v.   Hall,  2  P.  Wms.  378  ;  and 
8  Knox  V.  Simmonds,  4  Bro.  C.  C.  433  :     the  reportef  says,  that  "  if  the  tender  be 

and  see  Bernard  v.  Norton,  10  L.  T.  N.  S.     insisted   on   to   stop   interest,  the   money 
183.  must  be  kept  dead  from  that  time,  because 

the  party  is  to  be  imcore  prist."    The  other 

15 


§  900.]  PAYMENT   AND  DISCHARGE. 

the  money  ready  ;  whereas  the  eontrai*y  thei'eof  being  proved,  that 
the  n\ortgugor  was  not  ready  to  pay  it,  therefore  the  interest  must 
run  on."  Should  the  mortgagee  subsequently  demand  the  money, 
and  find  that  the  mortgagor  was  not  ready  with  it  to  make  pay- 
ment in  accordance  with  his  previous  tender,  interest  will  run  on 
as  if  no  tender  had  been  made  until  the  money  is  paid  or  brought 
into  court.^ 

900.  The  tender  must  be  absolute  and  unconditional,  and 
must  be  fairly  made  with  a  reasonable  opportunity  given  to  the 
mortgagee  to  ascertain  the  amount  due  him.^  It  would  seem  that 
the  demand  for  a  receipt  or  discharge  as  a  condition  of  the  tender 
would  prevent  a  refusal  of  the  tender  from  operating  as  a  dis- 
charge of  the  lien.  Certainly  a  condition  annexed  to  the  tender, 
that  the  holder  of  the  mortgage  should  execute  a  quitclaim  deed, 
or  a  discharge  of  record,  or  an  assignment,  would  have  that  effect.^ 
A  requirement  of  a  quitclaim  deed  is  an  inadmissible  condition, 
although  the  holder  of  the  mortgage,  to  whom  the  tender  is  made, 
received  from  the  mortgagee  not  only  an  assignment  of  the  mort- 
gage, but  a  quitclaim  deed  of  the  land  executed  after  the  mort- 
gagee had  himself  purchased  the  premises  at  a  foreclosure  sale, 
made  by  him,  which  had  afterwards  been  superseded  and  rendered 
abortive  by  his  extending  the  time  of  redemption.^ 

part  of  the  plea,  tout  temps  prist,  must  be  pendent  upon  his  first  executing  a  receipt 

understood.  or  discharge,  or   any  other  contingency. 

1  Cohimbian  Building  Ass'u  v.  Crump,  And  the  holder  must,  in  every  case,  have 

42  Md.  192.  a  reasonable  opportunity  to  look  over  the 

'  Potts  V.  Plaisted,  30  Mich.  149.     In  mortgage   and   accompanying   papers,  to 

this  case  Mr.  Justice  Christiancy  forcibly  calculate  and  ascertain  the  amount  due ; 

expressed   the   principles    upon   which   a  and  if  such   papers   are   not   present,  he 

tender  should  be  made,  saying  :  "  In  view  must  be  allowed  a  reasonable  time  to  get 

of  the  serious  consequences  to  the  holder  of  them  and  make  the  calculation.     He  can- 

a  mortgage,  upon  the  refusal  of  a  tender,  not  be  bound,  under  the  penalty  or  at  the 

—  consequences  which  may  often  amount  hazard  of  losing  his  entire  debt,  to  carry 

to  the  absolute  loss  of  the  entire  debt,  —  at  all  times,  in  his  head,  the  precise  amount 

and   in  view   of    the    strong   temptation  due  on  any  particular  day."     See,  also, 

which  must  exist  to  contrive  merely  col-  Roosevelt  v.  N.  Y.  &  Harlem  R.  R.  Co.  45 

orable  or  .sham  tenders,  not  intended  in  Barb.  (N.  Y.)  554;  30  How.  Pr.  226,  230; 

good  faith,  we  think  the  evidence  should  Roosevelt  v.  Bull's  Head  Bank,  45  Barb, 

be   so    full,  clear,  and  satisfactory  as   to  (N.  Y.)  579;  Storey  v.  Krewson,  55  Ind. 

leave  no  reasonable  doubt  that  the  tender  397. 

was  so  made,  that  the  holder  must  have  »  Loring  v.  Cooke,  3  Pick.   (Mass.)  48, 

understood  it  at  the  time  to  be  a  present,  and  cases  cited ;    Frost  v.  Yonkers  Sav. 

absolute,    and    unconditional    tender,  in-  Bank,  8  Hun  (N.  Y.),  26;  70  N.  Y.  553. 

tended  to  be  in  full  payment  and  extin-  *  Dodge  v.  Brewer,  31  Mich.  227. 
guishraent  of  the  mortgage,  and  not  de- 

16 


TENDER  BEFORE  AND  AFTER  DEFAULT.        [§  901. 

The  mortgagee  is  not  required  to  determine  at  the  time  whether 
the  tender  be  sufficient.  He  can  take  the  sum  offered,  and  then 
if  he  finds  it  sufficient  he  can  afterwards  discharge  or  cancel  the 
mortgage  before  rendering  himself  liable  to  penalty  for  not  doing 
so,  or  to  a  suit  to  compel  a  release ;  and  if  the  tender  prove  in- 
sufficient, he  need  not  fear  either  the  penalty  or  the  suit,  but  may 
himself  proceed  to  collect  the  balance.  He  cannot  justify  his  re- 
fusal of  a  tender  on  the  ground  that  the  debtor  would  not  comply 
with  the  conditions  upon  which  alone  he  would  accept  the  tender, 
as,  for  instance,  that  the  debtor  should  also  pay  another  debt  due 
him.  He  has  no  more  right  to  make  conditions  of  acceptance 
than  the  debtor  has  to  make  conditions  of  payment.^ 

901.  In  what  money  tender  may  be  made.  —  A  mortgage 
made  jDayable  in  gold  or  silver  coin  of  the  United  States  may  be 
paid  in  United  States  notes,  which  by  law  are  made  legal  tender.^ 

The  Supreme  Court  of  the  United  States  first  decided  that  the 
Legal  Tender  Act,  so  called,  was  not  applicable  to  contracts  made 
before  the  passage  of  the  act ;  ^  but  this  decision  was  shortly  after- 
wards reversed.*  In  the  interval  between  these  decisions,  pay- 
ment of  a  mortgage  executed  previous  to  the  passage  of  this  act 
was  tendered  in  legal  tender  notes  of  the  United  States,  which 
the  holder  of  the  mortgage  refused  ;  and  his  refusal  was  justified 
on  the  ground  that  he  could  properly  rely  upon  the  decision  then 
standing  as  the  law  of  the  land  upon  this  matter,  and  according  to 
which  the  tender  was  insufficient.^ 

A  payment  or  tender  in  bills  of  a  specie  paying  bank,  current  at 
the  place  of  payment,  has  been  held  to  be  good.^  A  tender  of 
notes  or  bills  not  a  good  tender  in  themselves  may  be  made  good 
by  an  offer  to  turn  them  forthwith  into  money.'''  If  no  objection 
be  made  at  the  time  to  the  quality  of  the  tender,  but  merely  to 
the  amount  of  it,  this  objection  cannot  afterwards  be  taken.^ 

A  tender  of  Confederate  treasury  notes  made  in  payment  of  a 

1  Burnet  v.  Denniston,  5  Johns.  (N.  Y.)  ^  Harris  v.  Jex,  66  Barb.  (N.  Y.)  232; 

Ch.  35.  aff.  .55  N.  Y.  421. 

^  Kodus   V.  Bronson,    34   N.   Y.   649;  "^  Augur  v.  Winslow,  1  Clarke  (N.  Y.), 

Kirapton    v.   Bronson,   45  Barb.  (N.  Y.)  2.')8 ;  see  Wortbington  i?.  Bicknell,  2  Har. 

618;    Verges   v.   Giboney,   38   Mo.   458;  &  J.  (Md.)  58. 

Stark  V.  Coffin,  105  Mass.  328.  '  Austen  i;.  Dodwell,  1  Eq.  Ca.  Abr. 

8  Hepburn  v.  Griswold,  8  Wall.  603,  605.  318. 

*  Knox  V.  Lee,  12  Wall.  457,  »  Biddulph  v.  St.  John,  2   Sch.  &  Lef. 

521  ;  Lockyer  v.  Jones,  Peake,  180,  n. 

VOL.   II.                                 2  17 


§  901.]  PAYMENT   AND   DISCHARGE. 

mortgage  given  in  Alabama,  at  the  time  of  the  Southern  Con- 
federacy, and  by  its  terms  payable  "  in  current  paper  funds,"  was 
held  a  good  tender,  inasmuch  as  such  notes  were  current  at  the 
time,  although  greatly  depreciated.^ 

Where  there  is  a  variance  between  the  recital  in  the  mortgage 
and  the  terms  of  the  bond,  the  mortgage  reciting  a  bond  payable 
in  "lawful  money  of  the  United  States,"  but  the  bond  calling  for 
"  lawful  ailver  money  of  the  United  States,"  third  persons  relying 
upon  the  record  are  not  affected  by  the  omission  in  the  mortgage, 
but  may  discharge  the  mortgage  by  a  payment  in  lawful  money 
of  the  country  of  any  description.  The  question  is  one  of  lien, 
and  this  is  determined  by  the  record  so  far  as  third  persons  are 
concerned. 

The  recital  in  the  mortgage  gives  notice  of  the  character  and 
amount  of  the  debt  secured  ;  and  subsequent  purchasers  and  mort- 
gagees are  not  required  to  seek  the  bond,  when  there  is  nothing 
vague  or  wanting  in  the  reference  to  render  such  inquiry  neces- 
sary. Although  the  bond  is  the  principal  debt  in  law,  and  gov- 
erns the  rights  of  the  parties  as  between  themselves,  it  does  not 
affect  others  who  have  purchased  in  good  faith  and  without  notice 
of  the  variance.^ 

A  legal  tender  of  interest  or  principal  of  a  mortgage  cannot  be 
made  by  a  bank  clieck.^ 

If  the  condition  of  the  mortgage  be  for  the  performance  of  any 
other  act  or  duty  than  the  payment  of  money,  as,  for  instance,  the 
support  of  the  mortgagee,  a  tender  of  performance  of  that  act  or 
duty  will  have  the  same  effect  that  a  tender  of  money  has  in  other 
cases."^ 

The  tender  of  a  larger  sum  than  is  due,  with  a  demand  for 
change,  is  good  if  no  objection  be  made  to  it  on  this  account.^ 

The  mortgage  covers  not  merely  the  debt  but  the  costs  of  a  suit 
at  law  by  the  mortgagee  to  recover  the  debt  or  to  enforce  the  se- 
curity.^   The  costs  are  regarded  as  incident  to  the  debt.     It  is  the 

1  Stalworth  v.  Blum,  41  Ala.  319.  5  Black  v.  Smith,  Pcake,  88. 

2  Eagle  BeneticiaJ  Society's  App.  75  ^  Rawson  v.  Hall,  56  Me.  142  ;  Hurd 
Pa.  St.  226.  V.  Coleman,  42  Me.  182  ;  Hartley  v.  Tat- 

8  Grussy  r.  Schneider,  50  How.  (N.  Y.)  ham,  1  Keyes  (N.  Y.),  222.     As  to  costs 

Pr.  134.  of  a  suit  against  a  surety  when  the  judg- 

*  Morrison  v.  Morrison,  4  Hun  (N.  Y.),  ment  against  him  was  compromised,  see 

410;   Carman   v.  Pultz,  21    N.    Y.    547;  Johnson  y.  Rice,  8  Me.  157. 
Holmes   v.   Holmes,   9   N.  Y.   525,  527  ; 
Young  V.  Hunter,  6  N.  Y.  203. 

18 


APPROPRIATION   OF   PAYMENTS.  [§§  902-904. 

debtor's  neglect  that  renders  a  resort  to  legal  process  necessary, 
and  he  is  not  allowed  to  -avoid  the  consequences  of  his  omission  to 
pex-forra  his  contract.  Therefore,  after  action  has  been  commenced, 
either  upon  the  debt  or  the  security,  a  tender  of  the  amount  to 
discharge  it  should  include  costs ;  ^  and  costs  incurred  in  an  at- 
tempt to  sell  the  property  under  a  power  of  sale,  in  accordance 
with  the  terms  of  the  mortgage,  must  in  like  manner  be  included.^ 

902.  The  person  refusing  a  tender  properly  made  incurs 
the  burden  of  all  costs  subsequently  made  in  any  proceeding  to 
redeem  or  to  foreclose  the  mortgage.^  As  already  noticed,  the 
tender  proving  sufficient,  he  sometimes  incurs  the  risk  of  a  com- 
plete discharge  of  his  lien  upon  the  property,  and  the  consequent 
loss  of  his  claim.*  This  would  be  prevented  in  some  states  by 
statutory  requirements,  that  upon  refusal  of  the  tender,  to  make 
it  effectual,  the  money  must  be  brought  into  court ;  and  in  other 
states  judicial  rules  and  practice  would  require  this,  or  at  least 
that  the  tender  be  constantly  kept  good. 

903.  Over-payment.  —  When  the  holder  of  a  mortgage,  upon 
payment  of  it,  extorts  more  than  is  actually  due,  and  the  debtor, 
in  order  to  obtain  a  speedy  discharge  or  to  prevent  foreclosure, 
pays  the  amount  demanded,  he  may  recover  the  over-payment  as 
money  received  by  the  mortgagee  to  his  use.° 

In  like  manner  if  the  mortgagee,  in  giving  notice  of  foreclosure 
sale,  makes  no  deduction  for  a  payment  made,  and  the  mort- 
gagor afterwards  redeems  from  the  sale  under  a  statute  allowing 
him  to  do  so  upon  paying  the  purchase  money  and  interest,  he 
may  recover  of  the  mortgagee  the  money  paid  on  the  mortgage.^ 

2.  Appropriation  of  Payments. 

904.  A  matter  of  intention.  —  Payment  of  the  debt  which 
the  mortgage  was  given  to  secure  extinguishes  the  mortgage.'^  But 
to  have  this  effect  in  some  states,  as  we  have  already  noticed,  the 
payment  must  be  made  at  the  time  mentioned  in  the  condition, 

1  Marshall  v.  Wing,  50  Me.  G2  ;  May-  *  §  893;  Marshall  v.  Wing,  50  Me.  62  ; 
nard  v.  Hunt,  5  Pick.  (Mass.)  240;  Jones  Bailey  v.  Mctcalf,  6  N.  H.  156;  Robinson 
V.  Phelps,  2  Barb.  (N.  Y.)  Ch.  440;  Cox     v.  Leavitt,  7  N.  H.  73,  93. 

V.  Wheeler,  7  Paige  (N.  Y.),  248.  6  close  ia  Phipps,  7  M.  &  G.  586  ;  Fra- 

2  Allen  V.  Robbins,  7  R.  I.  33.  ser  v.  Pendlebury,  10  W.  R.  104. 

8  Cliff  V.  Wadsworth,  2  Y.  &  C.  Ch.  «  Spottswood  v.  Ilerrick,  22  Minn.  548. 
598,  604;  Columbian  Building  Ass'n  v.  "^  Fisher  v.  Otis,  3  Chand.  (Wis.)  83  ; 
Crump,  42  Md.  192.  Martineau  v,  McCoUum,  4  lb.  153. 

19 


§  904.]  PAYMENT   AND   DISCHARGE. 

but  in  others  it  may  be  made  at  any  time  afterwards ;  but  every- 
Avlieve  it  is  tlie  rule  that  tlie  payment  must  be  actually  appropri- 
ated to  that  purpose,  and  until  this  be  done,  the  condition  of  the 
mortgage  being  broken,  the  mortgagor  may  maintain  a  bill  to 
redeem,^  or  the  mortgagee  may  maintain  a  bill  to  foreclose. 

Whether  a  payment  be  made  by  the  debtor  to  his  creditor  who 
holds  a  mortgage  upon  his  property,  or  whether  an  account  in  his 
favor  against  the  creditor  is  to  be  regarded  as  a  payment  on  the 
mortgage,  or  simply  a  debt  due  him  from  his  creditor,  leaving  the 
mortgage  standing  as  it  was  before,  is  a  question  of  the  intention 
of  the  parties,  and  is  to  be  determined  as  a  question  of  fact.  In 
the  absence  of  any  agreement  between  the  parties,  express  or  im- 
plied, the  mere  existence  of  a  debt  due  to  the  mortgagor  from 
the  mortgagee  does  not  operate  as  a  satisfaction  of  the  mortgage 
wholly  or  in  part,  or  enable  him  afterwards  to  set  off  such  indebt- 
edness against  an  assignee  of  the  mortgage.  This  point  is  illus- 
trated by  a  recent  case  before  the  Court  of  Appeals  of  New  York.^ 
A  debtor  gave  his  creditor  a  bond  and  mortgage  to  secure  the  ex- 
act amount  of  the  balance  of  their  account  conditioned  for  the 
payment  of  sixteen  thousand  dollars  in  one  year  with  interest. 
Transactions  to  a  large  amount  were  had  between  the  parties  for 
three  years  afterwards,  in  borrowing  and  lending  money,  checks, 
and  notes,  and  transferring  vessels;  but  when  an  account  was 
again  settled  at  the  end  of  that  period,  the  mortgagor  owed  the 
mortgagee  upwards  of  one  hundred  thousand  dollars.  The  claim 
was  made  that  after  the  giving  of  the  mortgage  there  was  a  bal- 
ance due  the  mortgagor  on  account  sufficient  to  pay  the  mortgage 
debt.  "  If  such  balance  at  any  time  existed,"  said  Mr.  Justice 
Hunt,  "  then  the  further  question  arises,  was  it  the  intention  of 
the  parties  that  the  mortgage  should  be  paid  by  such  balance,  or 
that  it  should  continue  as  a  subsisting  security  for  the  sixteen 
thousand  dollars,  independent  of  any  balance  in  the  current  ac- 
counts? This  also  is  a  simple  question  of  fact.  If  it  was  the  in- 
tention and  agreement  of  the  parties  that,  as  soon  as  a  balance  of 
sixteen  thousand  dollars  should  accrue  in  favor  of  Brown,  the  same 
should  be  applied  in  discharge  of  the  mortgage,  then  the  mortgage 
was  discharged  the  moment  such  balance  existed.  If,  on  the 
other  hand,  it  was  the  intention  and  agreement  of  the  parties  that 

1  Doody  V.  Pierce,  9  Allen  (Mass.),  141.         2  Peck  v.  Minot,  3   Abb.  (N.  Y.)  App. 

Dec.  465  :  S.  C.  4  Robt.  323. 

20 


APPROPRIATION    OF   PAYMENTS.  [§§  905,  906. 

the  sixteen  thousand  dollars  secured  by  the  mortgage  should  re- 
main as  a  permanent  debt,  irrespective  of  the  balance  of  accounts, 
then  it  would  so  remain  until  specifically  paid,  whatever  might  be 
the  state  of  accounts  between  the  parties.  Propositions  more  es- 
sentially questions  of  fact  than  those  thus  stated  cannot  well  be 
imagined."  The  mortgagor  in  the  mean  time  had  accepted  a 
release  of  a  part  of  the  mortgage  premises,  and  had  also  given 
several  new  obligations  for  the  interest  that  had  accrued  on  the 
bond,  and  these  acts  were  regarded  as  evidence  of  an  intention  to 
keep  the  mortgage  subsisting. 

905.  A  deposit  of  the  amount  of  the  debt  may  be  made 
■without  appropriation,  if  it  be  agreed  that  the  deposit  shall  be 
placed  in  the  mortgagee's  hands  without  in  any  way  operating  as 
a  payment  of  the  mortgage,  or  the  circumstances  show  that  the 
intention  of  the  parties  was  that  it  should  not  so  operate.  This 
was  the  case  where  a  mortgagor  sold  the  estate,  agreeing  to  dis- 
charge the  mortgage  himself,  and  took  the  purchaser's  notes  for 
the  amount  of  the  purchase  money.  These  he  delivered  to  the 
mortgagee  under  an  arrangement  that  the  proceeds  when  collected 
should  be  applied  to  the  payment  of  the  mortgage  ;  but  in  order 
to  stop  the  interest,  he  deposited  with  the  mortgagee  the  amount 
of  the  mortgage  debt,  the  mortgagee  giving  a  receipt  for  the 
money  and  agreeing  that  it  should  not  go  in  payment  of  the  mort- 
gage. The  purchaser's  note  was  not  paid  ;  but  under  the  circum- 
stances the  mortgage  remained  a  valid  security  unaffected  by  these 
transactions.^ 

906.  A  mortgage  debtor  may  in  the  first  instance  appro- 
priate a  payment  to  whatever  account  he  pleases,  either  principal 
or  interest,  or  to  another  debt  due  the  mortgagee.^  This  is  his 
right  in  accordance  with  the  maxim,  Quicquid  solvitur^  solvitur 
secundum  modum  solventis.  But  when  the  debtor  has  omitted  to 
make  any  specific  application  of  the  money  he  has  paid,  but  has 
left  this  to  the  presumptions  of  the  law  or  to  be  applied  by  the 
creditor  as  he  may  see  fit,  he  cannot  afterwards  go  back  and  make 
an   appropriation  of  it  himself.^     The  general  payment  may  be 

1  Howe  y.  Lewis,  14  Pick.  (Mass.)  329;  Simson   v.  Ingham,  2   B.  &    C.   6^,  per 

and  see  Toll  v.  Hiller,  11  Paige  (N.  Y.),  Best,  J. ;  Pttty  v.  Dill,  53  Ala.  641. 

228.  8  Wilkinson  v.  Sterne,  9  Mod.  427,  per 

-  Mills  V.  Fowkcs,  5  Bing.  N.  C.  455  ;  Lord  Hardwicke  ;  Mills  v.  Fowkes,  5  Bing. 

Bradley  v.  Heath,  3  Sim.  359  ;  Hammersley  N.  C.  455. 
V.  Kuowlys,  2  Esp.  666,  per  Lord  Kenyon ; 

21 


§  907.]  PAYMENT   AND   DISCHARGE. 

applied  by  the  ci'editor  to  a  claim  against  the  debtor  for  which  he 
has  no  security,  or  among  secured  claims  to  that  for  which  he  has 
the  least  security.^  In  an  action  to  compel  a  discharge  of  a  mort- 
gage on  the  ground  that  certain  payments  made  by  the  mortgagor 
were  applied  by  him  at  the  time  upon  the  mortgage,  when  he  was 
otherwise  indebted  to  the  mortgagee,  the  burden  is  upon  the  plain- 
tiff to  show  such  application  by  a  preponderance  of  evidence.^ 

A  person  holding  two  mortgages  upon  the  same  property  may 
apply  a  general  payment  to  either  or  to  both  of  them  at  his  op- 
tion. Thus  if  he  receive  the  proceeds  of  a  portion  of  the  mort- 
gaged estate  directly  from  a  purchaser,  although  the  mortgagor 
may  at  the  time  request  him  to  apply  them  towards  the  payment 
of  either  mortgage,  if  he  fail  to  make  any  application  the  mort- 
gagee is  at  liberty  to  apply  them  as  he  may  choose.^ 

907.  A  payment  made  by  a  mortgage  debtor  has  in  some 
cases  been  presumed  to  be  made  upon  the  mortgage  debt,  in 
the  absence  of  a  particular  appropriation  at  the  time,  where  the 
creditor  also  has  other  claims  against  the  mortgagor  which  are  un- 
secured, so  far  at  least  that  the  mortgagee  in  a  contest  with  other 
creditors  of  the  mortgagor  is  bound  to  prove  that  the  payment 
was  made  on  a  different  account.  But  this  presumption  would 
not  apply  in  case  of  an  appropriation  by  either  party  at  the  time.* 
Much  less  can  the  creditor,  upon  receiving  a  payment  directed  by 
the  debtor  to  be  applied  to  the  mortgage  debt,  claim  the  right  to 
apply  it  to  other  claims  and  enforce  the  mortgage  in  full  against 
the  mortgagor.^ 

If  a  mortgagee  release  a  portion  of  the  premises  to  one  who  has 
purchased  the  equity  of  redemption  of  that  portion,  the  money 
paid  him  for  such  release  is  deemed  a  payment  upon  the  mort- 
gage debt,  and  he  cannot  apply  it  in  discharge  of  other  debts  due 
him  from  the  mortgagor.^ 

A  general  payment  it  is  said  should  be  applied  to  a  debt  which 
is  the  personal  and  absolute  debt  of  the  payor  rather  than  to 
one  which  he  is  not  personally  bound  to  pay,  though  his  property 
be  holden  for  it.     Thus  where  a  purchaser  of  an  estate  incum- 

1  Mackenzie  v.  Gordon,  6  CI.  &  F.  892,         8  Parker  v.  Green,  8  Met.  (Mass.)  137. 
per  Lord  Cottenham;  Ege  v.  Watts,  55         *  Tharp  v.  Feltz,  6  B.  Mon.  (Ky.)  6. 
Pa.  St.  321 ;   Prouty  v.  Price,  50  Barb.         &  N.  Y.  Life  Ins.  &  Trust  Co.  v.  How- 
(N.  Y.)  .344  ;  Niagara  Bank  v.  Rosevelt,  ard,  2  Sandf.  (N.  Y.)  Ch.  183. 

9  Cow.  (N.  Y.)  409 ;  S.  C.  Hopk.  Ch.  574.         6  Hicks  v.  Bingham,  11  Mass.  300. 

2  Knox  V.  Johnston,  26  Wis.  41. 

22 


APPROPRIATION   OF   PAYMENTS.  [§  908. 

bered  by  a  mortgage  has  assumed  a  portion  of  the  mortgage  debt, 
and  has  thus  made  himself  personally  liable  to  the  mortgagee  for 
this  part  of  the  debt,  although  he  may  be  compelled  to  pay  the 
residue  of  the  debt  to  save  his  property,  he  is  entitled  to  have  a 
general  payment  made  by  him  applied  to  the  portion  of  the  debt 
for  which  he  is  personally  liable.^ 

When  the  appropriation  of  credits  is  left  to  the  law,  the  rule 
has  sometimes  been  adopted  that  the  credits  will  be  applied  most 
beneficially  to  the  debtor ;  and  therefor  will  be  applied  upon  a 
debt  secured  by  mortgage  rather  than  upon  a  debt  to  the  same 
party  upon  account  or  simple,  contract.^ 

By  the  civil  law,  and  that  of  Louisiana,  a  general  payment  is 
imputed  to  the  most  onerous  debt ;  and  therefore,  as  between  a 
mortgage  debt  and  an  open  account  between  the  same  parties, 
the  payment  is  applied  to  a  mortgage  debt^which  bears  interest.^ 

908.  The  creditor  receiving  money  on  general  account  is 
not  required  to  make  an  immediate  appropriation  of  it,  but 
he  may  apply  it  at  any  time  after  payment,  if  before  the  bringing 
of  an  action  or  the  settling  of  an  account  in  respect  of  it.*  If  the 
debtor  become  bankrupt,  it  would  seem  that  the  creditor  might 
then  apply  a  general  payment  to  whatever  liability  of  the  bank- 
rupt debtor  he  might  think  fit.^  "  The  distinction  is  this,"  says 
Lord  Hardwicke  ;  "  where  a  man  is  indebted  by^  mortgage  and 
bond,  and  pays  money  to  his  creditor,  he  must  make  the  applica- 
tion, and  declare  to  which  debt  he  applies  the  money  at  the  very 
time  he  pays  it,  and  he  cannot  make  the  application  afterwards  ; 
but  his  creditor  may  make  the  application  any  time  after  a  gen- 
eral payment  by  his  debtor,  so  as  he  does  it  before  an  account 
settled  between  them  ;  and  there  have  been  abundance  of  cases 
upon  this  distinction."  ^  An  entry  made  by  the  debtor  in  his  own 
private  books  is  of  course  not  conclusive  of  the  appropriation  un- 
less he  has  communicated  the  subject  of  the  entry  to  his  creditor ; 
and  the  creditor's  entry  in  his  own  books  is  not  conclusive  upon 
himself  until  he  in  like  manner  communicates  the  entry  or  states 
an  account.  Until  then  he  may  change  the  appropriation  as  he 
sees  fit.'' 

1  Snyder  v.  Robinson,  35  Inrl.  311.  ^  Johnson,  Exp.  3  De  G.,  M.  &  G.  236, 

2  Windsor  v.  Kennedy,  52  Miss.  164.  per  Lord  Cranworth. 

«  .Johnson  v.  Anderson,  30  Ark.  745 ;  «  Wilkinson  v.  Sterne,  9  Mod.  427. 

Forstall  v.  Blanchard,  12  La.  1.  '^  Simson  v.  Ingham,  2  B.  &  C.  65. 

*  Clayton's   case,  1   Mer.  572,  per   Sir 
W.  Grant.  ^^ 


§§  909,  910.]  PAYMENT    AND   DISCHARGE. 

An  iippropriation  of  payments  mude  by  the  parties  to  a  prior 
incumbrance  is  binding  upon  subsequent  incumbrancers,  if  the 
payments  are  made  upon  a  legal  obligation  of  the  debtor.  Al- 
though a  mortgage  bear  interest  at  the  rate  of  five  per  cent,  per 
month,  if  the  stipulation  be  not  in  violation  of  law,  subsequent 
incumbrancers  have  no  claim  for  relief  against  payments  which 
were,  b}^  common  consent  of  the  parties  to  the  mortgage,  applied 
to  the  payment  of  such  interest.^  Proceeds  of  a  sale  of  part  of 
the  mortgaged  property  made  by  consent  of  parties  cannot  be 
applied  as  against  subsequent  incumbrancers  to  the  payment  of  an 
unsecured  debt  of  tlie  mortgagor.''^ 

909.  What  is  a  sufficient  appropriation.  —  The  debtor's  en- 
tries in  his  own  books  are  not  regarded  as  sufficient  evidence  of  his 
application  of  a  general  payment.^  It  is  essential  that  the  cred- 
itor should  be  informed  of  the  particular  application  the  debtor 
desires  to  have  made  of  the  money,  to  make  it  of  any  effect. 

Where  certain  notes  were  insufficiently  secured  by  a  mortgage, 
and  afterwards  further  security  was  given  for  some  of  the  notes 
separately,  it  was  held  that  this  special  fund  must  be  applied  to 
the  notes  secured  by  it,  to  the  exoneration  of  the  mortgage,  which 
was  properly  left  for  those  having  no  other  security.* 

909  a.  A  mortgagee  may,  by  agreement  with  a  purchaser 
of  a  portion  of  the  mortgaged  premises,  bind  himself  to  applj^ 
general  payments  upon  the  mortgage  debt  to  the  discharge  of 
the  mortgage  hen  upon  such  portion.  Such  agreement,  although 
without  consideration,  is  binding  upon  the  mortgagee  as  to  the 
purchaser,  after  he  has  acted  upon  it  and  paid  money  to  the  mort- 
gagor ;  but  when  the  purchaser,  being  unable  to  complete  the 
purchase,  has  reconveyed  the  land  to  the  mortgagor,  the  contract 
being  as  to  the  latter  without  consideration,  and  therefore  a  nul- 
lity, he  has  no  right  to  have  payments  subsequently  made  applied 
upon  any  particular  part  of  the  mortgaged  property.  The  agree- 
ment in  such  case  is  for  the  purchaser's  benefit,  and  not  for  the 
benefit  of  the  mortgagor.^ 

910.  When  a  security  held  as  collateral  for  the  payment  of 
a  mortgage  debt  is  paid,  prirnd  facie  this  is  a  payment  upon  the 

1  Mills  V.  Kellogg,  7  Minn.  469.  i  Bridenbecker  v.  Lowell,  32  Barb.  (N. 

2  Webster  v.  Singley,  5.3  Ala.  208.  Y.)  9. 

8  Manning  v.  Westeme,  2  Vern.  606;         '=  Bush  v.  Sherman,  80  111.  160. 
Wrout  V.  Dawes,  25  Beav.  369. 

24 


APPROPRIATION   OF   PAYMENTS.  [§§  911,  912. 

principal  debt.^  But  unless  the  debt  or  some  part  of_  it  be  due 
and  payable,  the  mortgagee  cannot,  without  the  consent  of  the 
mortgagor,  apply  the  amount  received  to  the  payment  of  the 
mortgage  debt.  Thus,  for  instance,  money  paid  upon  a  policy  of 
insurance  held  by  the  mortgagee  for  a  loss  by  fire  cannot  be  ap- 
plied to  the  payment  of  the  debt,  if  it  be  not  due,  without  the 
consent  of  the  mortgagor.  The  money  received  from  the  insur- 
ance takes  the  place  of  the  property  destroyed,  and  is  still  collat- 
eral until  it  is  apj)lied  in  payment  by  mutual  consent.  If  the 
amount  received  be  indorsed  upon  the  note,  but  is  afterwards  ap- 
plied to  the  restoration  of  the  impaired  security,  for  the  benefit  of 
all  parties,  the  holder  of  a  second  mortgage  on  the  property  has 
no  equity  which  entitles  him  to  have  the  amount  so  received  ap- 
plied in  reduction  of  the  debt  secured  by  the  first  mortgage.  The 
indorsement  of  the  money,  in  the  first  instance,  upon  the  note, 
without  authority,  gives  no  such  right.^ 

911.  Interest  to  be  first  paid.  —  When  payments  are  made  by 
a  debtor  upon  a  mortgage,  without  being  specially  appropriated 
either  to  the  principal  or  interest  of  the  debt,  the  general  rule  is 
that  the  interest  due  shall  be  paid  before  any  part  of  the  principal 
is  discharged.^  If,  however,  there  is  no  instalment  of  interest  due, 
the  payment  is  applied  to  the  principal.* 

912.  Partial  payments  upon  a  usurious  mortgage  cannot  be 
applied  to  the  payment  of  usurious  interest,  even  with  the  consent 
of  the  mortgagor,  as  against  the  existing  rights  of  subsequent  in- 
cumbrancers.^ While  a  payment  of  a  bonus  upon  a  mortgage  for 
an  extension  of  the  time  of  payment  is  to  be  regarded  as  a  pay- 
ment upon  the  mortgage  debt,  yet  the  law  does  not  so  apply  it 
unless  the  debtor  asks  for  such  application.  Therefore  where  in- 
terest became  due  after  such  a  payment,  and  remaining  unpaid  for 
twenty  days  and  more,  an  action  was  brought  in  pursuance  of  a 
condition  of  the  mortgage,  making  the  whole  principal  due  upon 
such  default,  to  foreclose  the  mortgage,  it  was  held  that  the  bonus 
paid  for  extension  could  not  be  regarded  as  a  payment  of  the  in- 
terest so  as  to  prevent  such  forfeiture,  inasmuch  as  no  such  appli- 
cation of  it  had  been  made  or  asked  for  previous  to  the  suit,  and 

1  Prouty   V.   Eaton,  41    Barb.  (N.  Y.)         »  Chase  v.  Box,  Freera.  Ch.  261. 

409.  *  Davis  v.  Fargo,  1  Clarke  (N.  Y.),  470. 

2  Gordon  v.  Ware  Savings  Bank,  115         6  Greene  u.  Tyler,  39  Pa.  St.  .361. 

Mass.  588.      • 

25 


§  913.]  PAYMENT   AND   DISCHARGE. 

that  the  naortgagor's  request  in  his  answer  to  liave  it  so  applied 
could  not  affect  the  plaintiff's  right  of  action,  though  the  judgment 
should  be  entered  for  the  amount  of  the  mortgage  after  deducting 
the  amount  of  the  bonus  paid.^ 

3.  Presumption  and  Evidence  of  Payment. 

913.  The  possession  of  the  mortgaged  note  by  the  mort- 
gagor or  those  claiming  under  him  raises  a  presumption,  in  the 
absence  of  all  other  proof,  that  it  has  been  paid.  This  presump- 
tion is  one  of  fact  and  not  of  law,  and  may  be  rebutted  by  evi- 
dence accounting  for  the  mortgagor's  possession  of  the  note,  with- 
out having  paid  it.^  The  mortgagor's  possession  of  the  mortgage 
note,  even  after  it  is  due,  is  not  conclusive  evidence  of  payment, 
only  primd  facie  ;^  but  such  possession  continued  for  a  long  time 
and  unquestioned  by  the  mortgagee,  after  a  full  knowledge  of  this 
fact,  affords  a  strong  presumption  that  the  debt  has  been  paid.* 
The  possession  of  the  mortgage  alone  without  the  bond  or  note  is 
held  not  to  give  rise  to  any  presumption  of  payment.^ 

Where  one  about  selling  a  parcel  of  land  produced  a  mortgage 
of  it  with  the  seals  torn  off,  and  gave  it  to  the  purchaser,  stating 
it  had  been  paid  and  satisfied,  and  that  he  could  have  it  cancelled 
and  discharged  of  record,  the  fact  that  there  was  no  receipt  of 
payment  indorsed  upon  it,  and  the  further  fact  that  the  bond  was 
not  produced,  were  not  regarded  as  sufficient  to  raise  a  suspicion 
and  put  the  purchaser  upon  inquiry.*^ 

One  who  purchases  land  covered  by  an  undischarged  mortgage 
cannot  claim  to  be  a  purchaser  in  good  faith,  and  without  notice 
of  the  mortgagee's  equities,  simply  because  the  mortgagor  has 
possession  of  the  notes,  and  exhibits  them  to  him,  if  he  has 
knowledge  of  facts  sufficient  to  put  a  prudent  man  on  inquiry  ; 
and  especially  if  the  mortgagee  is  easily  accessible,  and  an  in- 

1  Church  V.  Maloy,  9  Hun  (N.  Y.),  148.       Braman  v.  Bingham,  26  N.  Y.  483  ;  Gar- 

2  Levy  V.  Merrill,  52  How.  (N.  Y.)  Pr.     lock  v.  Geortner,  7  Wend,  (N.  Y.)  198; 
360  ;    Flower    v.    Elwood,    66    111.    438  ;     Palmer  v.  Gurnsey,  lb.  248. 

Orrasby  v.  Barr,  21  Mich.  474;  Richard-  3  Pu,-ser  v.  Anderson,  4  Edw.  (N.  Y.) 

sou  V.  Cambridge,  2  Allen  (Mass.J,  118  ;  Ch.  17;    Harrison   v.  New  Jersey   Tl.  & 

Grimes  v.  Kimball,  3  Allen  (Mass.),  518  ;  Transportation  Co.  19  N.  J.  Eq.  488. 

Crocker    v.    Thompson,   3    Met.    (Mass.)  *  Gardner  v.  James,  7  R.  I.  396. 

224  ;    Bell   v.  Woodward,  34   N.  H.   90  ;  5  Harrison  v.  N.  J.  R.  &  Transportation 

Chapman   v.   Hunt,  18   N.   J.   Eq.   414;  Co.  19  N.  J.  Eq.  488. 

Johnson   v.  Nations,  26  Miss.  147  ;   and  8  Harrison   v.   Johnson,  18   N.   J.   Eq. 

see  Succession  of  Norton,  18  La.  Ann.  36  ;  420. 

26 


PRESUMPTION   AND   EVIDENCE   OF   PAYMENT.       [§§  914,  915. 


quiry  of  him  would  have  elicited  the  fact  that  the  mortgage  was 
still  in  force.^ 

The  conduct  of  the  mortgagee  in  other  respects  than  the  deliv- 
ery up  of  the  mortgage  and  note  may  be  sufficient,  with  or  with- 
out this  fact,  to  authorize  the  presumption  that  the  mortgage  has 
been  paid;^  as,  for  instance,  by  representing  to  a  purchaser  that 
the  mortgage  is  paid  ;  or  by  standing  by  or  assisting  the  mort- 
gagor in  making  a  sale  of  the  entire  estate,  and  leading  the  pur- 
chaser to  suppose  that  payment  of  the  mortgage  has  been  or  will 
be  provided  for,  from  the  proceeds  of  the  sale  or  otherwise.^ 

914.  There  is  no  presumption  that  interest  has  been  paid 
unless  the  mortgage  or  the  bond  shows  this.  On  the  contrary,  if 
these  instruments  show  no  entry  of  the  payment  of  interest  which 
has  become  due  by  the  lapse  of  time,  the  presumption  is  that  the 
interest  is  in  default.* 

915.  Payment  is  presumed  from  lapse  of  time,  as  else- 
where illustrated,  when  the  mortgagor  has  remained  in  possession 
without  making  any  payment  of  either  principal  or  interest,  or 
doing  any  other  act  in  recognition  of  the  mortgage  debt  for  a  pe- 
riod of  twenty  years  or  more  ;  or  whatever  may  be  the  statute 
period  of  limitation.^ 


1  Boxheimer  v.  Gunn,  24  Mich.  372. 
In  considering  the  facts  relating  to  the 
good  faith  of  the  purchase,  Chief  Justice 
Christiancy  said  :  "  Now,  when  a  release 
of  record  would  have  been  so  much  better 
and  more  certain,  which  the  mortgagee,  if 
the  mortgage  was  satisfied,  was  bound  un- 
der a  heavy  penalty  to  execute,  and  which, 
in  all  probability,  would  have  cost  less, 
why,  —  unless  he  knew  or  believed  com- 
plainant claimed  the  mortgage  to  be  still 
in  force,  and  that  if  he  ap])lied  to  him  for 
a  release,  facts  would  be  developed  which 
would  show  the  claim  to  bo  valid,  and  put 
an  end  to  all  pretence  of  claim  to  be  a 
purchaser  in  good  faith  and  without  no- 
tice, —  why  does  he  choose  to  employ  a 
lawyer  to  examine  the  condition  of  the 
mortgage  and  description  of  the  notes,  and 
make  an  abstract  of  them,  and  give  him 
his  legal  opinion  that  the  notes  being 
taken  up,  the  mortgage  is  in  effect  paid"? 
We  think  if  he  had  really  believed  the 
mortgage  satisfied,  as  between  the  parties 


to  it,  he  would  have  taken  the  natural  and 
direct  course,  and  requested  a  discharge 
of  record." 

2  Ormsby  v.  Barr,  21  Mich.  474. 

8  McCormick  v.  Digby,  8  Blackf.  (Ind.) 
99;  Taylor  v.  Cole,  4  Munf.  (Va.)  351. 

4  Olmsted  v.   Elder,  2   Sandf.   (N.   Y.) 
Sup.  Ct.  325. 

s  See  chapter  xxiv.    Inches  v.  Leonard 
12  Mass.  379;  Chick  v.  Kollins,  44  Me 
104;    Blethen   I'.    Dwinal,   35   Me.    556 
Cheever  v.  Perley,  II  Allen  (Mass.),  584 
Belmont  v.  O'Brien,  12  N.  Y.  394  :  Dun 
ham  V.    Minard,  4   Paige   (N,  Y.),  441 
Collins  V.   Torry,  7  Johns.    (N.  Y.)  278 
Jackson   v.   Hudson,  3  lb.  375;  Giles  v 
Baremore,    5   Johns.    (N.    Y.)    Ch.   545 
Jacksonv.  Delancey,  11  Johns.  (N.Y.)365 
Jackson  v.  Pratt,  10  lb.  381  ;  Vanmaker 
V.  Van  Buskirk,  1  N.  J.  Eq.  (Saxt.)  685  ; 
Evans  v.  Huffman,  5  N.  J.  Eq.  (1   Halst.) 
354.     Ten  years  in  North  Carolina  :  Rob- 
erts V.  Welch,  8  Ired.    (N.  C.)  Eq.  287  ; 
Brown  v.  Becknall,  5  Jones  (N.  C.)  Eq. 

27 


§  916.]  PAYMENT   AND   DISCHARGE. 

This  presumption  is  repelled  by  a  payment  of  interest  or  any 
part  of  the  principal  within  that  time,i  or  by  any  admission  of 'the 
mortgagor  that  the  mortgage  debt  is  still  due  ;  ^  or  by  a  foreclos- 
ure of  the  mortgage,  though  made  more  than  thirty  years  after 
the  maturity  of  the  mortgage.^  The  presumption  of  payment 
from  lapse  of  time  is  a  presumption  of  law,  and  is  conclusive 
unless  rebutted  by  distinct  proof.^  Possession  for  less  than  the 
statute  period  may  be  left  to  the  jury,  in  connection  with  partial 
payments  and  other  evidence  as  tending  to  show  that  the  debt 
was  fully  paid  ;  ^  but  the  legal  presumption  does  not  arise  at  an 
earlier  period.^ 

No  presumption  of  payment,  however,  can  arise  from  lapse  of 
time  when  the  mortgagee  or  his  assignee  is  in  possession  of  the 
land.'^  This  proposition,  which  is  undoubtedly  law,  was  asserted 
by  Mr.  Justice  Strong  in  the  Supreme  Court  of  the  United 
States  ;  ^  but  in  the  case  decided  the  further  facts  appeai'ed  that 
the  mortgagor  became  insolvent  and  died  before  the  debt  fell 
due,  and  the  purchaser  of  the  equity  of  redemption  also  became 
insolvent  before  the  maturity  of  the  debt,  removed  from  the  state, 
and  never  afterwards  returned.  All  this  was  regarded  as  quite 
enough  to  repel  any  presumption  of  payment  arising  from  lapse 
of  time. 

916.  But  a  shorter  period  than  twenty  years  may  be  ground 
for  a  presumption  of  payment  when  other  circumstances  come 
in  to  strengthen  the  presumption.  What  quality  or  amount  of 
evidence  of  other  circumstances  tending  to  the  conclusion  that 
payment  has  been  made  is  necessary  to  prove  payment,  in  connec- 
tion with  the  lapse  of  a  long  period  of  time,  cannot  be  prescribed 
by  any  rule.  Each  case  must  rest  upon  its  own  circumstances. 
The  question  of  presumption  of  payment  within  a  less  time  than 
twenty  years  should  be  left  to  the  jury  in  connection  with  other 

423  ;  Jackson  v.  Pierce,  10  Johns.  (N.  Y.)  2  prear  v.  Drinker,  8  Pa.  St.  520. 

414;  Kellogg  v.  Wood,  4  Paige   (N.  Y.),  a  Jackson  t;.    Slater,  5   Wend.  (N.    Y.) 

578  J  Owings  v.  Norwood,  2  H.  &  J.  (Md.)  295. 

96 ;  Murray  v.  Fishback,  5  B.  Mon.  (Ky.)  *  Whitney  v.  French,  25  Vt.  663. 

403.  6  Gould  V.  White,  26  N.  H.  178. 

1  Howard  v.   Ilildreth,  18  N.  H.   105;  «  Peck  v.  Mallams,  10  N.  Y.  509. 

Hughes  V.  Blackweli,  6  Jones  (N.  C.)  Eq.  "^  Crooker  v.  Jewell,  31  Me.  306. 

73;    Wright  v.  Eaves,   10  Rich.   (S.   C.)  ^  Brobst   v.   Brock,  10  Wall.  519,  and 

Eq.  582.  see  cases  cited. 

28 


PRESUMPTION   AND   EVIDENCE    OF   PAYMENT.       [§  917,  918. 

evidence  :  "  and  in  such  cases,"  says  Mr.  Justice  Buller,^  "  the 
slightest  evidence  is  sufficient."  In  the  same  case  Lord  Mansfield 
said  that  there  is  a  distinction  between  length  of  time  as  a  bar, 
and  where  it  is  only  evidence  of  it.  Chief  Justice  Kent,  in  an 
early  case  in  New  York,^  where  no  possession  had  been  taken 
under  a  mortgage,  and  no  interest  had  been  paid,  and  no  steps 
had  been  taken  to  enforce  it  for  nineteen  years,  held  that  it  was 
not  an  outstanding  title,  and  that  a  jury  might  well  presume  it 
satisfied.  In  a  recent  case  in  Florida,  under  peculiar  circum- 
stances, payment  was  likewise  presumed  after  a  lapse  of  nineteen 
years.^ 

917.  Whether  a  mortgage  has  been  paid  or  not  is  a  ques- 
tion of  fact,  for  the  determination  of  which  any  facts  or  circum- 
stances relating  to  the  matter  may  be  considered  as  well  as  direct 
evidence,  —  and  such  indirect  evidence  is  as  good  upon  one  side 
as  upon  the  other,  —  to  prove  payment  or  to  dis^orove  it.^  Thus, 
while  a  mortgagor  for  the  pur^jose  of  proving  payment  may  show 
that  for  several  years  after  the  date  of  the  mortgage  he  occasion- 
ally worked  for  the  mortgagee,  the  latter  may  rebut  this  evidence 
by  showing  that  he  was  accustomed  to  pay  all  his  laborers  at  short 
and  stated  intervals,  and  that  the  mortgagor  was  poor,  and  de- 
pendent upon  his  earnings  for  support.^ 

An  indorsement  on  a  note  that  a  release  of  the  trust  deed,  by 
which  the  note  was  secured,  had  been  made  and  delivered  by 
order  of  the  holder,  affords  no  presumption  of  payment  when  the 
note  is  produced  by  the  payee  or  his  representative  with  the  in- 
dorsement cancelled  by  drawing  a  pen  through  the  words.^ 

918.  Indorsements  of  payments  made  upon  the  mortgage 
notes,  whether  of  interest  or  principal,  are  mere  admissions  of 
payment  in  behalf  of  the  maker ;  and  parol  evidence  is  admissible 
to  explain  them,  or  even  to  show  that  they  were  erroneously 
made.  Such  evidence  may  be  admitted  not  only  as  against  the 
mortgagor,  but  also  against  a  purchaser  of  the  equity,  if  at  the 
time  of  his  purcliase  he  made  no  inquiry  as  to  the  amount  due  on 
the  mortgage,  or  as  to  the  indorsements  upon  the  notes.     But 

1  Oswaldf.  Legh,  1  T.  R.  270;  and  see  *  See  Schafer  v.   Haitz,  56   lud.  389; 
Colsell   V.   Budd,  1  Camp.   27,  per  Lord  Popple  u.  Diiy,  123  Mass.  520. 
Ellenborou-h.  &  Waugh  v.  Riley,  8  Met.  (Mass.)  290; 

2  Jackson  v.  Pratt,  10  Johns.  (N.  Y.)  and  see  Green  v.  Storm,  3  Sandf.  (N.  Y.) 
381.  Ch.  305,  as  to  offsets. 

8  Euckmaster  v.  Kelley,  15  Fla.  180.  «  Sicinmetz  v.  Lang  81  111.  603. 

29 


§  910.]  PAYMENT   AND   DISCHARGE. 

a  mortgagee  could  not  stand  by  and  allow  a  purchaser  to  bay 
the  estate  as  unincumbered,  and  afterwards  set  up  his  mortgage 
against  him  ;  nor  could  he  represent  it  as  incumbered  for  a  cer- 
tain sum  and  then  to  set  up  a  larger  claim  under  his  mortgage.^ 

But  a  receipt  in  full  of  all  demands  is  no  evidence  of  the  dis- 
charge of  a  mortgage  given  to  secure  the  future  support  of  the 
mortgagee.^ 

4.  Payment  hy  Accounting  as  Administrator. 

919.  When  a  mortgagor  comes  into  possession  of  the 
mortgage  in  a  representative  capacity,  as,  for  instance,  as  guar- 
dian, executor,  or  administrator  of  the  mortgagee,  he  may  at  any 
time  treat  the  debt  as  paid  and  the  mortgage  discharged  by  charg- 
ing it  as  paid  in  his  probate  accounts.^  After  he  has  done  this,  a 
subsequent  assignment  of  the  mortgage  by  him  in  his  representa- 
tive capacity  transfers  no  title  to  the  land.  Before  so  accounting 
for  his  own  mortgage  and  debt,  he  may  assign  them  as  subsisting 
obligations,  and  then  he  would  credit  the  estate  with  the  proceeds 
of  the  sale.  If  the  mortgagor  be  sued  upon  his  probate  bond  as 
guardian  or  administrator,  and  judgment  be  rendered  for  the 
whole  amount  due  from  him  without  deducting  the  mortgage 
debt,  this  is  thereupon  taken  to  be  discharged  by  operation  of 
law.4 

But  the  taking  of  administration  by  a  mortgagor  upon  the  es- 
tate of  the  mortgagee,  and  his  returning  an  inventory  in  which 
the  mortgage  debt  due  from  himself  is  inchided,  does  not  neces- 
sarily operate  as  payment  of  the  debt.^  As  between  the  admin- 
istrator and  those  beneficially  interested  in  the  estate,  he  is  held 
to  account  for  it  as  a  debt  paid,  because  he  cannot  sue  himself  or 
collect  his  own  debt  in  any  other  mode  than  by  crediting  it  in 
his  administration  account.  But  although  it  be  a  I'ight  on  the  part 
of  the  creditors  and  heirs  of  the  mortgagee  to  require  the  admin- 
istrator to  credit  his  debt  in  his  administration  account,  they  may 
waive  this  right.  Therefore,  the  administrator  of  a  second  mort- 
gagee may,  in  his  capacity  of  administrator,  redeem  as  against  the 

1  McDaniels  z;.  Lapham,  21  Vt.  222.  *  Tarbell  v.   Parker,    101     Mass.    165; 

2  Austin  V.  Austin,  9  Vt.  420.  Commonwealth  v.  Gould,  118  Mass.  300. 

8  Martin  v.  Smith,  124  Mass.  Ill ;  Ips-         ^  Miller  v.  Donaldson,  17  Ohio,   264; 
wich  Manuf.  Co.  v.  Story,  5  Met.  (Mass.)     Finch  v.  Houghton,  19  Wis.  149. 
'310. 

30 


PAYMENT    BY    ACCOUNTING   AS   ADMINISTRATOR.       [§§  920,  921. 

assignee  of  a  prior  mortgagee  who  has  purchased  the  equity  of 
redemption.^ 

920.  Although  the  legal  position  of  a  mortgagor,  who  has  be- 
come the  administrator  of  his  mortgagee,  does  not  necessarily  de- 
termine whether  the  mortgage  has  been  paid  or  not,  yet  the  man- 
ner in  which  he  subsequently  deals  "with  the  mortgage  ■will 
determine  this  question.  Thus  where  such  administrator,  who 
was  also  the  son  of  the  mortgagee,  after  his  appointment  made  a 
second  mortgage  of  the  same  property  with  the  usual  covenants 
of  warranty  and  against  incumbi-ances,  it  was  held  that  the  mort- 
gage of  his  father  was  thereupon  discharged,  and  that  his  subse- 
quent assignment  of  it  was  without  effect.^  In  like  manner  when 
the  owner  of  an  equity  of  redemption,  subject  to  a  mortgage 
given  in  trust  for  certain  heirs,  is  appointed  their  trustee,  although 
he  thereby  acquires  a  legal  title  to  the  mortgage,  it  is  not  merged  ; 
yet  if  he  afterwards  conveys  the  land  by  deed,  with  covenants 
against  incumbrance  and  of  warranty,  and  he  receives  the  pur- 
chase money,  the  mortgage  is  extinguished,  unless  the  money 
is  misappropriated  with  the  knowledge  of  the  purchaser.^  But 
where  at  the  time  of  the  making  of  a  second  mortgage  the  first 
mortgage  was  in  part  unpaid,  and  stood  undischarged  of  record, 
and  the  second  mortgagee  with  knowledge  of  these  facts  induced 
the  mortgagor,  who  was  administrat6r  of  the  first  mortgage,  to 
enter  satisfaction  of  the  prior  mortgage,  such  entry  did  not  give 
the  junior  mortgage  priority.^ 

If  an  administrator  of  the  mortgagor  takes  an  assignment  of  a 
mortgage  upon  his  intestate's  estate  to  himself,  and  afterwards 
assigns  this  to  another,  the  mortgage  may  be  foreclosed  by  the 
assignee  as  a  subsisting  security.  This  is  upon  the  ground  that 
the  mortgage  was  purchased  by  the  administrator  in  his  individ- 
ual capacity  from  his  own  funds.^ 

921,  The  purchase  by   an  executor   of  a  mortgage  on  his 

^  Kinney  v.  Ensign,  18  Pick.   (Mass.)  be  according  to  his  title,  and  that  will  be, 

2.32  ;  Pettee  v.  Peppard,  120  Mass.  522.  and  will  appear  by  the  record  to  be,  in  his 

"The  complainant,"  said  Chief  Justice  representative  capacity." 

Shaw,  "  is  in  a  situation  to  do  just  what  ^  Ritchie  v.  Williams,  11  Mass.  50. 

any  other  administrator  would  do,  as  if  he  ^  jjadley  y.   Chapin,  11  Paige  (N.  Y.), 

were  not  himself  the  original  mortgagor.  245;  PetteeV  Peppard,  120  Mass.  522. 

On  rcdcm.ptioa  he  will  be  put  into  posses-  *  llemann  v.  Buckmaster,  85  111.  403. 

sion  of  the  estate;  but  he  will  hohl  it  in  ^  jy^  Forest  v.  Hough,  13  Conn.  472. 
aulre  droit ;  his  seisin  and  possession  will 

31 


§§  9-2-2,  02o.]  PAYMENT   AND   DISCHARGE. 

testator's  estate,  and  the  assignment  of  it  to  a  person  to  hold  for 
the  executor,  does  not  operate  as  a  discharge  of  the  mortgage,  if 
the  executor  made  the  purchase  with  his  own  personal  funds, 
witliout  intending  it  as  a  payment  of  the  mortgage,  or  to  use  it 
for  his  own  benetit  to  the  disadvantage  of  the  trust  estate;^  and 
in  such  a  case,  though  the  executor  receive  from  the  testator's 
estate  money  more  than  enough  to  pay  off  the  mortgage,  but  he 
applies  it  partly  to  paying  off  other  debts,  the  testator's  devisees, 
in  an  action  against  them  to  recover  the  mortgaged  premises,  can- 
not sustain  a  defence  of  payment  on  the  ground  of  the  conduct 
of  the  executor,  without  showing  affirmatively  that  the  executor 
received  money  from  the  estate  which  he  might  have  applied  in 
discharge  of  the  mortgage  debt,  and  did  not  in  fact  apply  it  to  the 
discharge  of  other  debts.^ 

In  like  manner  a  purchase  by  an  executor  of  the  first  mort- 
gagee, at  a  sale  of  the  mortgaged  property  under  a  second  mort- 
gage, does  not  operate  as  a  merger  or  extinguishment  of  the  first 
mortgage,  unless  it  was  so  intended  by  the  purchaser  ;  and  if  the 
purchase  be  made  in  his  own  right,  with  his  own  funds,  an  inten- 
tion that  it  should  not  so  operate  is  manifest, ^ 

Upon  the  same  principle  where  the  trustees  under  a  mortgage  of 
a  railroad  company  purchased  a  portion  of  the  land  embraced  in 
the  mortgage,  at  a  sale  under  a  decree  of  foreclosure  obtained  upon 
a  prior  mortgage,  the  purchase  being  made  in  their  individual 
right,  it  cannot  be  treated  as  a  payment  of  the  mortgage  by  them.^ 

922.  And  so,  on  the  other  hand,  if  the  mortgagee  be  ap- 
pointed administrator  of  the  estate  of  the  original  debtor,  the 
mortgage  is  not  extinguished  unless  assets  come  into  his  iiands 
which  can  be  applied  in  payment  of  the  debt.^ 

If  an  executor  or  administrator  discharge  a  mortgage  belonging 
to  the  estate  he  is  administering,  upon  a  consideration  moving 
only  to  him  personally  and  not  to  the  estate,  although  the  mort- 
gagor know  this,  the  release  is  not  void,  but  voidable  only ;  and  if 
parties  in  interest  seek  to  enforce  the  mortgage  as  a  subsisting 
security,  they  must  first  have  the  release  set  aside.^ 

923.  Bond  by  heir  to  pay  the  debt.  —  When  an  heir,  to  pre- 

1  Stillman  y.  Stillman,  21  N.  ,J.Eq.  126.         *  Grijjgs  v.  Detroit,  &c.  R.  R.  Co.  10 

2  Sanderson  u.  Edwards,  111  Mass.  33.5.     Mich.  117. 

8  Clift  V.  White,  12  N.  Y.  519.  &  Bemis  v.  Call,  10  Allen  (Mass.),  512. 

6  Weir  V.  Mosher,  19  Wis.  311. 


CHANGES   IN   THE   FORM    OF   THE   DEBT. 


[§  924. 


vent  a  sale  of  mortgaged  land,  gives  a  bond  for  the  payment  of 
the  debt  and  takes  an  assignment  of  the  mortgage,  the  mortgage 
in  some  cases  has  been  held  to  be  discharged,^  and  in  others  to  re- 
main a  subsisting  security. 

5.    Changes  in  the  Form  of  the  Debt. 

924.  No  change  in  the  form  of  indebtedness  or  in  the  mode 
or  time  of  payment  will  discharge  the  mortgage.  A  mortgage 
secures  a  debt,  and  not  the  note,  or  bond,  or  other  evidence  of  it. 
No  change  in  the  form  of  the  evidence,  or  the  mode  or  time  of 
payment,  —  nothing  short  of  actual  payment  of  the  debt,  or  an 
express  release,  —  will  operate  to  discharge  the  mortgage.  The 
mortgage  remains  a  lien  until  the  debt  it  was  given  to  secure  is 
satisfied,  and  is  not  affected  by  a  change  of  the  note,  or  by  giving 
a  different  instrument  as  evidence  of  the  debt,  or  by  a  judgment 
at  law  on  the  note  merging  the  original  evidence  of  indebtedness, 
or  by  a  recognizance  of  record  taken  in  lieu  of  the  mortgage 
note.^ 


1  See  §  866 ;  Eobinson  v.  Leavitt,  7  N. 
H.  73. 

2  Taber  v.  Hamlin,  97  Mass.  489,  492 ; 
Watkins  v.  Hill,  8  Pick.  (Mass.)  522; 
Pomroy  v.  Rice,  16  lb.  22;  Baxter  v. 
M'Intire,  13  Gray  (Mass.),  171  ;  Osborne 
V.  Benson,  5  Mason,  157;  Swan  v.  Yaple, 
35  Iowa,  248 ;  Port  v.  Bobbins,  35  Iowa, 
208;  State  v.  Lake,  17  Iowa,  215;  Jordan 
V.  Smith,  .30  Iowa,  500  ;  Chase  v.  Abbott, 
20  Iowa,  154;  Sloan  v.  Rice,  41  Iowa, 
465;  Hendershott  v.  Ping,  24  Iowa,  134  ; 
Morse  v.  Clayton,  13  S.  &  M.  (Miss.) 
375  ;  McCormick  v.  Digby,  8  Blackf.  (Ind.) 
99  ;  Huguninv.  Starkweather,  5  Gilm.  (111.) 
492;  Seymour  v.  Darrow,  31  Vt.  122; 
Dana  v.  Binney,  7  Vt.  493;  McDonald 
V.  McDonald,  16  Vt.  630;  Dunshee  v. 
Parmeiee,  19  Vt.  172  ;  Slocum  v.  Catlin,  22 
Vt.  137;  Flower  v.  Elwood,  66  111.438; 
Hamilton  v.  Quimby,  46  111.  91  ;  Wayman 
V.  Cochrane,  35  111.  155  ;  Elliott  v.  Blair,  47 
111.  343 ;  Rogers  v.  Trustees  of  Schools,  46 
111.  428;  Babcock  v.  Morse,  19  Barb.  (N. 
Y.)  140  ;  Bank  of  Utica  v.  Finch,  3  Barb. 
(N.  Y.)  Ch.  293  ;  Rogers  v.  Traders  Ins. 
Co.  6  Paige  (N.  Y.),  583  ;  Hill  v.  Beebe,  13 
N.  Y.  556 ;  Gregory  v.  Thomas,  20  Wend. 

VOL.  II.  3 


(N.  Y.)  17  ;  Cole  v.  Sackett,  1  Hill  (N. 
Y.),  516;  Franklin  v.  Cannon,  1  Root 
(Conn.),' 500;  Bolles  y.  Chauncey,  8  Conn. 
389  ;  Elliot  v.  Sleeper,  2  N.  H.  525  ;  Had- 
lock  y.  Bulfinch,  31  Me.  246;  Parkhurst 
r.  Cumnings,  56  Me.  155;  Smith  v.  Stan- 
ley, 37  Me.  11  ;  Cullum  v.  Branch  Bank 
of  Mobile,  23  Ala.  797  ;  Christian  v.  New- 
berry, 61  Mo.  446 ;  Lippold  i-.  Held,  58 
Mo.  213 ;  Thornton  v.  Irwin,  43  Mo.  153  ; 
Williams  v.  Starr,  5  Wis.  534 ;  Heard  v. 
Evans,  l.Freem.  (Miss.)  Ch.  79 ;  Whittaker 
V.  Dick,  5  How.  (Mass.)  296;  Terry  v. 
Woods.  14  Miss.  139  ;  Gleason  v.  Wright, 
53  Miss.  247  ;  Burton  v.  Pressly,  1  Cheves 
(S.  C),  1  ;  Farmers'  Bank  v.  Mutual,  &c. 
Society,  4  Leigh  (Va.),  69;  Cissna  v. 
Haines,  18  Ind.  496;  Ames  v.  N.  0.,  Mo- 
bile &  Tex.  R.  R.  Co.  2  Woods,  206. 

In  Flower  v.  Elwood,  66  III.  438,  Mr. 
Justice  Walker  stated  this  general  princi- 
ple as  follows :  "  As  a  general  rule,  the 
mere  change  in  the  form  of  the  debt  does 
not  satisfy  a  mortgage  given  to  secure  it, 
unless  it  is  intended  so  to  operate.  The 
lien  of  the  debt  attaches  to  the  mortgaged 
property,  and  the  lien  can,  as  between  the 
parties,  only  be  destroyed  by  the  [layment 

38 


§  925.]  PAYMENT   AND   DISCHARGE, 

This  rule  as  applied  to  a  renewal  of  the  note  holds  equally  in 
those  states  where  a  negotiable  note  is  held  to  be,  primd  facie, 
payment  of  the  debt  for  which  it  was  given. ^  In  Massachusetts, 
where  this  rule  prevails,  it  is  subject  to  qualification,  and  may  be 
rebutted  and  controlled  by  evidence  or  admitted  facts.  "  And  it 
has  been  uniformly  held,"  says  Mr.  Justice  Endicott,  "  that  the 
presumption  of  payment  is  controlled  where  its  effect  would  be 
to  deprive  the  party  who  takes  the  note  of  his  collateral  security, 
or  any  other  substantial  benefit."  ^ 

This  presumption  may  also  be  rebutted  by  parol  evidence  of  an 
agreement  to  the  contrary  made  by  the  parties.^ 

925.  A  new  note  is  not  a  discharge  as  against  a  subsequent 
purchaser,  unless  it  is  so  as  to  the  mortgagor.  As  a  general 
rule  a  purchaser  from  a  mortgagor  or  a  subsequent  incumbrancer 
cannot  claim  that  a  new  note  for  the  whole  or  any  part  of  the 
mortgage  debt  operates  as  a  payment,  unless  the  facts  are  such 
that  the  mortgagor  himself  could  make  this  claim.  The  mort- 
gagee's security  cannot  be  affected  by  any  dealings  of  the  mort- 
gagor with  other  persons.^  Of  course  if  the  mortgagee  by  his  acts 
or  declarations  leads  another  who  is  about  to  become  interested  in 
the  property  to  suppose  that  the  amount  for  which  a  new  note  has 
been  taken  is  actually  paid,  and  is  no  longer  covered  by  the  mort- 
gage, he  is  estopped  to  claim  that  as  to  such  person  the  new  note 
was  not  a  discharge  of  the  mortgage  debt.  A  second  mortgage 
and  note  taken  for  the  same  debt  without  a  surrender  and  dis- 
charge of  the  first  mortgage  and  note  is  presumably  a  further 
security  for  the  same  debt,  and  not  a  substitution  for  that.^ 

Where  a  new  mortgage  and  note  are  taken  by  a  mortgagee 
from  a  purchaser  of  a  mortgaged  estate,  under  an  agreement  with 
the  mortgagor  that  the  original  mortgage  should  not  be  enforced, 

or  discharge  of  the  debt,  or  by  a  release  of  Pomroy  v.  Rice,  16  lb.  22  ;    Bank  of  S.  C. 

the  mortgage.      Mere  change  of  the  form  v.  Rose,  1  Strob.  (S.  C)  Eq.  257  ;  Dunshee 

of  the  evidence  of  the  debt  in  nowise  affects  i;.  Farmelee,  19    Vt.    172;    M'Donald   v. 

the  lien.      A  renewal  of  the  note,  its  re-  M'Donald,  16  Vt.  630;  Bolles  v.  Chaun- 

duction  to  a   judgment,  or  other  change  cey,  8  Conn.  389. 

not  intended  to  operate  as  a  discharge  of  ^  Parham  Sewing  Mach.  Co.  v.  Brock, 
the  lien,  still  leaves  it,  as  between  the  par-  113  Mass.  194;  and  see  Worthy  v.  War- 
ties,  in  full  vigor.     This  is  a  rule  in  equity  ner,  119  Mass.  550. 
that  is  sanctioned  by  many  adjudged  cases.  ^  Langley  v.  Bartlett,  33  Me.  477. 
In  that  forum  mere  form  is  disregarded,  *  Robinson  v.  Urquhart,  1  Beas.  (N.J.) 
and  the  substance  only  is  considered."  515  ;  Strachn  v.  Foss,  42  N.  11.  43. 

1  Watkins  v.  Hill,  8  Pick.  (Mass.)  522;  ^  Schumperti;.Dillard,55Miss.348,364. 

34 


CHANGES  IN  THE  FORM  OF  THE  DEBT.        [§  926. 

if  the  property  included  in  the  new  mortgage  should  prove  suffi- 
cient for  the  purpose,  the  mortgagee  having  neglected  to  record 
the  new  mortgage  for  a  long  time,  and  by  his  laches  lost  the  ben- 
efit of  it  by  the  intervention  of  other  incumbrances,  when  the 
property  itself  was  sufficient,  he  was  held  to  have  lost  the  right 
to  enforce  the  original  mortgage.^ 

926.  Intention  generally  controls.  —  Whether  a  new  note 
shall  be  treated,  and  have  effect  between  the  parties,  as  a  pay- 
ment of  a  former  one  for  which  it  is  substituted,  will  depend  upon 
the  purpose  and  understanding  of  the  parties  to  the  transaction. 
But  not  only  will  the  intention  of  the  parties  be  determined  by 
the  express  agreement  of  the  parties,^  but  in  the  absence  of  this, 
by  the  circumstances  attending  the  transaction  from  which  such 
intention  may  be  inferred.^  Tlie  assent  of  the  mortgagor  that 
the  lien  of  the  mortgage  shall  continue  will  have  that  effect  as 
against  him,  even  when  the  mortgagee  so  conducts  the  business  as 
to  discharge  the  lien  as  against  other  parties  interested.'^  In  the 
absence  of  any  express  agreement,  and  of  any  circumstances  show- 
ing intention,  the  renewal  of  the  note  does  not  affect  the  security.^ 
The  burden  is  upon  the  mortgagor  to  show  the  existence  of  an 
agreement  that  the  mortgage  lien  should  be  released  upon  the  ex- 
ecution of  the  new  note  ;  and  not  upon  the  mortgagee  to  show  an 
agreement  that  the  mortgage  should  continue  as  a  security  for  the 
debt  covered  by  the  new  note.^ 

It  is  of  course  competent  for  the  parties  to  agree  that  a  change 
in  the  form  of  the  mortgage  debt  shall  operate  as  a  payment  of 
the  debt,  although  the  mortgage  be  not  cancelled  in  form.  Such, 
also,  will  be  the  effect  of  the  substitution  of  a  new  security  for 
the  old,  when  the  circumstances  of  the  transaction  indicate  an 

1  Teaff  V.  Iloss,  1  Ohio  St.  469.  5  Cullum   v.   Branch  Bank  of  Mobile, 

2  Worcester  Nat.  Bank  v.  Chceney,  87     23  Ala.  797. 

111.  602,  614;  11  Chicago  L.  N.  31.  6  Sloan  v.  Rice,  41  Iowa,  465.     In  a  re- 

3  Grimes  v.  Kimball,  3  Allen  (Mass.),  cent  case  in  Illinois,  however,  the  taking 
518  ;  Taft  v.  Boyd,  13  lb.  84  ;  Watkins  v.  of  a  new  note  by  a  mortgagee,  payable  in 
Hill,  8  Pick.  (Mass.)  522;  Pomroy  v.  two  years  without  interest,  after  the  iu- 
Rice,  16  lb.  22 ;  Hoag  v.  Starr,  69  111.  scitution  of  proceedings  in  bankruptcy 
365  ;  Flower  v.  Elwood,  66  III.  438  ;  Lip-  against  the  maker,  under  a  composition 
pold  V.  Held,  58  Mo.  213;  McDonald  v.  agreement  entered  into  by  all  the  creditors 
Ilulse,  16  Mo.  503;  Birrell  v.  Schie,  9  Cal.  of  the  maker,  was  held  by  a  majority  of 
104 ;  and  see  Howell  v.  Bush,  54  Miss,  the  court  to  operate  as  a  release  of  the 
437.  mortgage.     Jarnagan   v.   Gaines,    84   111. 

*  McConihe  v.  McClurg,  18  Wis.  637.        203. 

35' 


§  927.]  PAYMENT   AND   DISCHARGE. 

intention  or  understanding  that  the  original  debt  shall  be  paid. 
The  question  of  an  intention  in  such  cases  always  comes  in  with 
controlling  force ;  and  the  intention  may  operate  as  well  to  ex- 
tinguish the  debt  as  to  keep  it  alive.  If  a  new  note  be  taken 
with  the  intention  that  it  shall  operate  as  payment  in  whole  or  in 
part  of  the  old  debt,  then  the  mortgage  is  accordingly  paid  wholly 
or  in  part  as  the  case  may  be.  Thus  where  a  mortgage  was  given 
as  security  for  a  note  payable  in  instalments,  and  after  the  first 
instalment  had  become  due  the  mortgagee  called  on  the  mort- 
gagor for  payment,  saying  he  could  sell  the  note  and  mortgage 
if  that  instalment  were  paid  ;  the  mortgagor  thereupon  gave  a 
note  payable  in  four  months  for  the  amount  due,  upon  which 
the  mortgagee  obtained  a  discount  at  a  bank ;  and  the  following 
indorsement  was  at  the  same  time  made  on  the  mortgage  note  : 
"  Received  the  first  instalment  on  the  within,  of  $402.78."  The 
mortgagee  thereupon  assigned  the  mortgage  and  the  original 
note.  Before  the  maturity  of  the  new  note  the  mortgagor  failed, 
and  it  was  paid  by  the  mortgagee  who  indorsed  it.  Chief  Justice 
Shaw,  delivering  the  opinion  of  the  court,i  said :  "  The  indorse- 
ment on  the  note  of  a  receipt  of  payment  of  the  first  instalment 
is  primd  facie  evidence  of  payment ;  and  the  other  facts  agreed 
confirm,  instead  of  rebutting,  this  presumption.  Payment  by  a 
negotiable  note  shall  operate  as  a  discharge  and  extinguishment 
of  a  prior  debt  when  so  intended  by  the  parties.  The  rule  of 
this  commonwealth  differs  from  that  of  the  common  law,  only  in 
determining  what  shall  be  presumed  to  be  the  intent  of  the  par- 
ties, from  the  fact  of  giving  and  accepting  a  negotiable  note  for 
a  simple  contract  debt.  Without  further  evidence  of  intent  we 
construe  it  to  be  payment,  but  the  common  law  deems  it  collateral 
security.  But  this  presumption  may  be  controlled  by  other  evi- 
dence, and  when  ascertained  such  intent  shall  govern." 

The  question  of  intention  in  these  cases  as  well  as  in  others  is 
one  for  the  jury.  It  is  one  of  fact.  Considerations  of  the  effect 
of  regarding  the  transaction  as  a  payment  upon  the  rights  and 
interests  of  the  parties  may  jjroperly  be  urged  as  reasons  why  it 
slunild  or  should  not  be  so  considered.^ 

927.  The  taking  up  of  the  mortgage  note  and  the  substi- 
tution of  another  is  not  a  discharge  of  the  original  debt  either 

1  Fowler  u.  Bush,  21  Pick.  (Mass.)  2.30.     Couch  v.  Stevens,  37  N.  H.  169;  Hodg- 

2  CoUamer    v.   Langdon,   29    Vt.   32;     man  p.  Hitchcock,  15  Vt.  374. 

36 


CHANGES  IN   THE   FORM    OF   THE   DEBT.  [§  927. 

as  between  the  parties  or  as  to  a  subsequent  purchaser.  Even 
where  the  purchaser  finds  the  mortgage  note  in  the  hands  of  the 
mortgagor,  the  mortgage  remaining  unsatisfied  of  record,  he  has 
no  right  to  presume  that  it  was  satisfied.  The  mortgage  is  suf- 
ficient to  put  him  upon  inquiry.^  Upon  making  a  partial  pay- 
ment of  the  mortgage  debt,  the  mortgagee  may  give  up  the  old 
note  and  take  a  new  one  for  the  balance  remaining  unpaid  ;  and 
the  transaction  does  not  impair  or  defeat  the  mortgage.^  In  like 
manner  the  original  mortgage  notes  may  be  given  up  and  in  lieu 
of  them  an  agreement  made  that  the  mortgagor  shall  pay  the 
amount  of  the  notes  upon  an  indebtedness  of  the  mortgagee  for 
the  same  land,  without  in  any  way  discharging  the  mortgage  se- 
curity;  ^  and  it  would  seem  that  the  agreement  might  just  as  well 
be  for  the  payment  of  any  debt  of  the  mortgagee  to  the  amount 
of  the  mortgage  debt. 

When  a  mortgage  is  discharged  and  a  new  one  taken  as  part 
of  one  transaction,  the  seisin  between  the  release  and  the  new 
mortgage  is  but  momentary,  and  will  not  admit  any  right  or  in- 
terest of  the  mortgagor  under  the  homestead  act  to  intervene  ;  * 
nor  would  siich  a  seisin  give  his  wife  a  right  of  dower.  But  as 
regards  intervening  liens  of  third  persons,  a  release  of  the  orig- 
inal mortgage  and  the  taking  of  a  new  one  would  naturally  let 
them  into  a  position  of  priority  to  the  new  mortgage,  and  it 
would  require  very  clear  evidence  of  fraud  to  induce  a  court  of 
equity  to  interfere  to  prevent  this  result.^ 

When  the  original  mortgage  is  left  undischarged  upon  the  tak- 
ing of  the  second  mortgage,  in  the  absence  of  an  express  agree- 
ment that  the  latter  is  received  in  satisfaction  of  the  former,  for 
stronger  reasons  the  original  mortgage  remains  as  a  security  for 
the  original  debt.^  If  the  new  note  and  mortgage  secure  an  ad- 
ditional amount,  this  fact  shows  a  motive  for  the  transaction,  but 

1  See   §   355;    Bolles  v.   Chauncey,   8         5  Dingman   v.  Randall,    13    Cal.    512. 
Conn.  389.  See,   however,  Packard   v.   Kingman,   11 

2  Chase  v.  Abbott,  20  Iowa,  1.54.  Iowa,  219,  where  an  intervening  landlord's 
8  Hugunin  v.   Starkweather,   10  III.  (.5     lien  was  postponed  ;  Lasselle  v.  Barnett, 

Gilm.)   492.      See    Tucker   v.  Alger,  30  1  Blackf.  (Ind.)  150;  Stearns  t>.  Grodfrey, 

Mich.  67.  16  Me.  158 ;  United  States  v.  Crookshank, 

*  Burns  v.  Thayer,  101  Mass.  426  ;  Dil-  1  Edw.  (N.  Y.)'e33.    See,  however,  §  971. 

Ion  V.  Byrne,  5  Cal.  455  ;  Swift  v.  Krae-  ^  Gregory  v.  Thomas,  20  Wend.  (N.  Y.) 

mer,  13  Cal.  526.    Intention  as  shown  by  17  ;  Christian  v.  Newberry,  61   Mo.  446'; 

the  transaction  will  [govern.  Howell  v.  Burdett  v.  Clay,  8  B.  Mon.  (Ky.)  287,  296. 
Bush,  .54  Miss.  437. 

37 


§§  928-930.]  PAYMENT    AND   DISCHARGE. 

it   has  no   teiidenc)'   to  show  that  the   prior  security  was   extin- 
guislied.^ 

928.  The  giving  up  of  the  bond  of  defeasance  executed  at 
the  time  of  the  deed  of  the  land  and  constituting  with  it  a  mort- 
gage, and  the  taking  of  a  new  bond  at  a  subsequent  date,  do  not 
defeat  the  transaction  as  a  security  for  the  original  loan.^ 

929.  The  taking  of  further  security  for  the  mortgage  debt, 
whether  it  be  by  a  second  mortgage  upon  the  same  land  or  real  or 
personal  security  upon  other  property,  is  generally  no  waiver  of 
the  original  mortgage.^  Neither  does  the  taking  of  a  new  note 
with  an  indorser  where  there  was  none  originally,  nor  the  taking 
of  a  new  note  without  an  indorser  in  place  of  an  old  one  secured 
by  an  indorsement,  release  the  premises  from  the  lien.*  Nor  does 
the  renewal  of  the  note  with  different  names  have  this  effect ;  ^ 
nor  the  giving  of  the  new  note  different  from  the  old  by  making 
it  payable  at  a  certain  place  ;  ^  nor  the  giving  of  the  new  note  at 
the  request  of  the  holder  of  the  old  to  one  to  whom  it  was  in- 
tended the  security  should  be  assigned,  such  delivery  to  the  in- 
tended assignee  amounting  in  fact  to  an  assignment  of  the  debt.'^ 
The  taking  of  a  new  bond  and  mortgage  for  the  amount  of  taxes 
and  assessments  paid  by  the  mortgagee  on  the  mortgaged  prop- 
erty does  not  of  itself  prevent  his  claiming  the  same  under  the 
lien  of  the  first  mortgage,  or  as  incident  to  that  lien.^  Of  course 
if  further  security  be  taken  for  part  of  a  mortgage  debt,  with 
the  intention  and  mutual  understanding  of  the  parties  that  such 
part  shall  be  withdrawn  froui  the  operation  of  the  mortgage,  it 
will  have  this  effect.* 

930.  The  incorporating  in  the  new  note  of  an  additional 
sum  loaned  will  not,  in  the  absence  of  an  agreement  to  the  con- 
trary, discharge  the  mortgage  as  between  the  parties  ;  and  parol 

1  Hill  i>.  Beebc,  13  N.  Y.  556;  but  see  *  Darst  v.  Bates,  51  111.  439;  N.  H. 
Iowa  County  v.  Foster  (Iowa,   1879),  13     Bank  v.  Willard,  10  N.  H.  210. 

West.  Jur.  36.  5  i^ond  v.  Clarke,  14  Conn.  334. 

2  See  §  252;  Judd  v.  Flint,  4  Gray  ^  Whittaker  v.  Dick,  5  How.  (Miss.) 
(Mass.),  557;    Tennery  v.  Nicholson,  87     296. 

III.  464.  7  Burdett   v.    Clay,    8   B.   Mon.    (Ky.) 

3  Flower  v.  Elwood,  66  111.  438  ;  Bur-  287  ;  Christian  v.  Newberry,  61  Mo.  446, 
dett  V.  Clay,  8  B.  Mon.  (Ky.)  287,  296  ;     451. 

Gregory  v.  Thomas,  20   Wend.  (N.  Y.)  8  Eagle  Fire  Ins.  Co.  r.  Pell,  2  I':dw. 

17  ;  Byers  v.  Fowler,  14  Ark.  86  ;  Ci.ssna  (N.  Y.)  Ch.  631. 

V.  Haines,  18  Ind.  496  ;  and  see  Bank  of  ^  Boston    Iron   Co.   v.  King,    2    Cush. 

England  v.  Tarleton,  23  Miss.  173.  (Mass.)  400. 
38 


CHANGES   IN   THE   FORM   OF   THE   DEBT.       [§§  931,  932. 

evidence  is  admissible  to  show  that  at  the  time  the  new  note  was 
given  it  was  agreed  that  the  mortgage  should  continue  as  secu- 
rity for  it.^  And  where  the  note  had  been  increased,  diminished, 
and  renewed  several  times  it  was  held  that  the  mortgage  securing 
it  was  still  a  valid  security  for  the  amount  remaining  due  upon  it, 
even  as  against  third  persons.^  Especially  when  the  mortgage  by 
its  terms  is  given  to  secure  notes  made  for  the  accommodation 
of  the  mortgagor  and  renewals  of  those  notes  from  time  to  time, 
until  they  should  all  be  paid,  it  is  not  necessary  to  constitute  the 
notes  subsequently  issued,  renewals,  that  they  should  be  for  the 
same  amounts,  or  for  the  same  periods,  or  that  each  successive 
note  should  have  been  applied  to  take  up  its  immediate  predeces- 
sor. A  continuing  loan  of  the  same  credit  would  be  within  the 
terms  of  the  mortgage." 

931.  But  if  a  new  note  for  a  different  amount,  payable  at 
another  date,  be  given  in  place  of  one  of  several  notes  secured  by 
the  mortgage  without  any  agreement  that  it  shall  be  secured  by 
the  mortgage,  the  holder  loses  his  right  to  the  security  as  against 
the  holder  of  other  notes  secured  by  the  mortgage.* 

932.  The  taking  of  a  new  note  for  the  interest  accrued  upon 
a  mortgage  debt  does  not  generally  remove  this  part  of  the  debt 
from  the  security  of  the  mortgage.^  The  indorsement  of  the 
amount  for  which  the  new  note  is  taken  upon  the  original  mort- 
gage note  does  not  have  the  effect  of  a  payment  even  as  against 
subsequent  incumbrancers,*^  unless  their  dealings  with  the  mort- 
gagor were  based  upon  a  knowledge  of  such  indorsement,  and  a 
belief  that  such  amount  had  been  paid. 

Where  a  note  was  given  for  the  amount  of  interest  accrued  on 
a  mortgage,  together  with  a  further  loan  made  at  that  time,  and 
an  indorsement  was  made  on  the  mortgage  note,  "  Received  on 
the  within,  interest  up  to  date,"  and  there  was  evidence  that  the 
note  was  intended  by  the  parties  to  be  taken  in  payment  of  the 

1  Port  V.  Robbins,  35  Iowa,  208  ;  Goe-  »  Qault  v.  McGrath,  32  Pa.  St.  392. 
nen  v.  Schroeder,  18  Minn.  66  ;  Dc  Cottes  *  Wilhelmi  v.  Leonard,  13  Iowa,   330. 
V.  Jeffers,  7  Fla.  284;  new  note  including  See  Tucker  v.  Alger,  30  Mich.  67. 
interest  accrued,  Pomroy  v.  Rice,  16  Pick.  ^  Elliot  v.  Sleeper,  2  N.  H.  525  ;  Park- 
(Mass.)  22  ;  Ellsworth  v.  Mitchell,  31  Me.  hurst  v.  Cummings,  56  Me.  155;  Tylee  v. 
247.  Yates,  3  Barb.  (N.  Y.)  222  ;  Rice  v.  Dewey, 

2  Brinckerhoff  v.  Lansing,  4  Johns.  (N.  54  Barb.  (N.  Y.)  455. 

Y.)  Ch.  65.  "  Calkins  v.  Lockwood,  16  Conn.  276. 

39 


§§  933-935.]  PAYMENT   AND  DISCHARGE. 

interest,  it  was  held  that  such  interest  was  no  longer  secured  by 
the  mortgage.^ 

933.  A  new  note  given  for  the  balance  found  due  on  a 
mortgage  is  not  invalid  for  want  of  consideration,  although  the 
old  note  be  not  given  up,^  but  is  left  with  the  mortgagee  as  col- 
lateral to  the  new  note.  The  extension  of  the  time  of  payment  is 
a  suflicient  consideration  to  uphold  the  new  note. 

934.  A  mortgage  of  indemnity  is  generally  held  to  cover 
successive  renewals  of  the  note  for  which  the  indemnity  was 
taken. ^  Nor  does  it  make  any  difference  that  the  renewed  note 
has  different  names  upon  it,  or  is  for  a  different  amount ;  so  long 
as  the  mortgagee  remains  liable  for  the  debt  he  was  indemnified 
against,  he  may,  upon  being  compelled  to  pay  it,  rely  upon  the 
protection  of  the  mortgage.*  Nor  is  it  material  that  the  renewal 
note  is  for  a  larger  amount,  but  signed  and  indorsed  as  the  first 
one  was  ;  ^  or  that  there  are  successive  renewals.^ 

When  the  surety  does  not  become  liable  upon  the  new  note,  but 
this  is  taken  with  other  sureties,  and  the  old  is  taken  up,  the 
condition  of  the  surety's  mortgage  is  saved,  and  consequently  no 
interest  remains  in  him  which  he  can  pass  by  assignment.'^ 

935.  If  a  payment  be  made  upon  a  mortgage  by  check  or 
bill  of  exchange  which  is  not  paid,  although  an  indorsement  of 
payment  be  made  upon  the  mortgage  note  or  bond,  yet  no  part  of 
the  debt  being  actually  paid,  no  part  of  the  mortgage  lien  is  ex- 
tinguished.^ A  mortgage  having  been  paid  by  a  check  and  bills 
of  exchange,  the  latter  were  dishonored.  The  title  and  mortgage 
deeds  were  delivered  up  to  the  mortgagor,  together  with  a  receipt 
by  tlie  mortgagee  declaring  that  the  check  and  bills  were  re- 
ceived in  full  of  principal  and  interest  due  upon  the  mortgage,  and 
agreeing  whenever  required  to  execute  a  conveyance  of  the  prop- 

1  Goenen  V.  Schroedcr,  18  Minn.  66.  Pond  v.  Clarke,  14    Conn.  .334,   overrul- 

2  Langley  v.  Banlett,  33  Me.  477.  ing  Peters  v.  Goodrich,  3  Conn.  146. 

8  Robinson  v.  Urquhart,  1  Beas.  (N.J.)  6  Boxheimer  v.  Gunn,  24  Mich.  372. 

515;   Enston  v.  Friday,  2  Rich.   (S.  C.)  6  Boxheimer  ?;.  Gunn.  s(y«-a. 

427,  n.;  Smith  y.  Prince,  14  Conn.  472 ;  7  Abbott  v.  Upton,   19   Pick.    (Mass.) 

Boswell  V.  Goodwin,  31  Conn.  74  ;  Mar-  434  ;  and  see  Van  Rensselaer  v.  Akin,  22 

kell  V.  Eichelberger,  12  Md.  78;  Handy  Wend.  (N.  Y.)   549;  Ayres  v.  Wattson, 

V.  Commercial  Bank  of  N.  O.  19  B.  Mon.  57  Pa.  St.  360. 

(Ky.)  98;  Choteau  v.  Thompson,  3  Ohio  »  Maryh\nd,  &c.  Co.  v.  Wingert,  8  Gill 

St.  424.  (Md.),   170;   Tucker  v.  Alger,  30  Mich. 

*  Nightingale  v.   Chafee,  11  R.  I.  609  ;  67,  where  a  due  bill  was  taken ;  Burrows 


40 


V.  Bangs,  34  Mich.  304. 


CHANGES  IN   THE   FORM   OF   THE   DEBT. 


[§  936. 


erty.  The  mortgagor  became  bankrupt  without  having  obtained 
a  reconveyance.  It  was  held  that  the  mortgage  was  not  dis- 
charged, but  that  it  might  still  be  foreclosed  for  the  balance  of  the 
debt  remaining  unpaid.^ 

936.  The  merger  of  the  note  in  a  judgment  does  not  extin- 
guish the  debt,  and  the  mortgage  continues  a  lien  till  it  is  satisfied, 
or  the  judgment  is  barred  by  the  statute  of  limitation.^ 

The  rule  is  the  same  whether  the  judgment  be  for  the  whole  or 
for  a  part  only  of  the  mortgage  debt ;  ^  and  whether  the  security 
be  in  the  form  of  an  ordinary  mortgage  or  of  a  trust  deed.* 
Neither  does  a  decree  in  a  foreclosure  suit,"  nor  a  judgment  on 
scire  facias,^  impair  the  lien  of  the  mortgage ;  nor  the  taking  of 


1  Teed  v.  Carruthers,  2  Y.  &  C.  Ch.  31. 
The  Vice-Chancellor,  in  deciding  this  case, 
said  :  "If  I  were  satisfied  that  the  agree- 
ment between  them  was  understood  and 
intended  by  them  to  be,  that  tlie  mort- 
gaged estate  should  be  absolutely  dis- 
charged whether  the  bills  were  honored 
or  dishonored,  productive  or  waste  paper, 
however  unusual  or  improvident  I  might 
consider  such  an  agreement,  I  might  very 
possibly  have  thought  it  right  to  give 
effect  to  such  a  contract  clearly  proved. 
....  I  am  not,  however,  satisfied  that 
this,  as  between  themselves,  was  intended 
by  them ;  the  form  of  the  receipt,  and  the 
facts  to  which  I  have  referred,  being,  in 
my  judgment,  neither  conclusive  on  the 
point,  nor  of  themselves  sufficient  to  estab- 
lish so  improbable  a  state  of  things.  I 
think  the  case  very  capable,  if  necessary, 
of  being  viewed  in  a  manner  analogous  to 
that  in  which  questions  of  lien  between 
vendors  and  purchasers  of  real  estate  are 
considered.  Generally,  where  a  vendor 
receiving  bills  for  the  purchase  money 
signs  a  receipt  for  the  amount  as  cash, 
and  actually  conveys  the  estate  as  upon 
payment,  he  retains,  as  between  him  and 
the  purchaser,  a  lien  on  the  estate  for 
the  money  in  the  event  of  the  bills  being 
dishonored,  unless  the  purchaser  can  show 
an  agreement  to  the  contrary.  Why 
should  a  mortgagee  rcconveying  to  the 
mortgagor,  on  receiving  payment  in  the 
shai>e  of  bills,  be  in  a  worse  situation  than 


a  vendor  having  or  not  having  a  binding 
contract  prior  to  the  conveyance  ?  In  the 
present  case  a  reconveyance  has  not  taken 
place;  but  probably  if  it  had  (though  it 
is  not  necessary  to  decide  this  point),  it 
would,  in  my  judgment,  have  made  no 
difference." 

2  Torrey  v.  Cook,  116  Mass.  16.3  ;  Ely  v. 
Ely,  6  Gray  (Mass.),  439 ;  Jewett  v.  Ham- 
lin, 68  Me.  172;  Priest  v.  "Wheelock,  58 
111.  114;  Darst  v.  Bates,  .51  111.  439; 
Hewitt  V.  Templeton,  48  111.  367  ;  Hamil- 
ton V.  Quimby,  46  111.  90 ;  Vansant  v. 
Allman,  23  111.  30 ;  Wayman  v.  Coch- 
rane, 35  111.  152;  Markle  v.  Rapp,  2 
Blackf.  (Ind.)  268;  Hensiker  v.  Lamborn, 
13  Ind.  468 ;  O'Leary  v.  Snediker,  16  Ind. 
404;  Jenkinson  v.  Ewing,  17  Ind.  505; 
Cissna  v.  Haines,  18  Ind.  496;  Flanagan 
V.  Westcott,  3  Stock.  (N.  J.)  264;  Lewis 
V.  Conover,  21  N.J.  Eq.  230;  Butler  v. 
Miller,  1  N.  Y.  496  ;  Morrison  v.  Morri- 
son, 38  Iowa,  73;  State  v.  Lake,  17  Iowa, 
215  ;  Wahl  v.  Phillips,  12  Iowa,  82  ; 
Shearer  v.  Mills,  35  Iowa,  499  ;  Hender- 
shott  V.  Ping,  24  Iowa,  134;  Jordan  v. 
Snn'th,  30  Iowa,  500 ;  Riley  v.  McCord, 
21  Mo.  285;  Thornton  v.  Pigg,  24  Mo. 
249. 

^  Applegate  v.  Mason,  13  Ind.  75. 

^  HamiltoQ  v.  Quimby,  46  111.  90. 

''  Hendershott  v.  Ping,  24  Iowa,  134  ; 
Peck's  Appeal,  31  Conn.  215. 

«  Rockwell  V.  Servant,  63  111.  424  ; 
Helmbold  v.  Man,  4  What      '"a.^  410. 

41 


§§  937,  938.]  PAYMENT   AND   DISCHARGE. 

a  recognizance  for  the  sum  clue  in  place  of  the  mortgage  note.^ 
The  mortgagee  may  afterwards  foreclose  the  mortgage.^  The 
land  is  liable  for  the  debt  till  the  judgment  is  paid. 

When  the  judgment  is  paid  bj'  the  mortgagor  or  any  one  claim- 
ing under  him,  the  paj'ment  has  the  effect  of  a  redemption,  and 
gives  him  the  same  rights  in  i-espect  to  the  property  that  he 
would  have  had  upon  paying  the  debt  before  judgment.^  And  so 
when  the  mortgage  is  satisfied  by  a  sale  of  the  mortgaged  land 
under  a  decree  of  foreclosure,  neither  the  mortgage  nor  the  decree 
is  any  longer  a  lien  upon  it.*  But  if  the  proceedings  in  the  fore- 
closure suit  be  set  aside  and  vacated,  the  judgment  and  sale  do 
not  cancel  the  mortgage,  but  the  lien  remains  and  may  be  en- 
forced by  new  proceedings.^ 

937.  A  judgment  for  a  portion  of  the  mortgage  debt,  as, 
for  instance,  for  one  of  several  mortgage  notes,  is  no  waiver  of  the 
lien  upon  the  mortgaged  property  for  the  amount  reduced  to  judg- 
ment. If  an  execution  be  issued  upon  the  judgment,  the  mort- 
gage lien  still  continues  until  the  execution  is  actually  satisfied  ; 
so  that  if  the  creditor  is  obliged  to  abandon  his  levy  for  any 
reason,  his  rights  remain  the  same  as  if  no  levy  had  been  made.^ 
Neither  does  the  satisfaction  of  a  judgment  for  a  part  of  the  debt 
affect  the  mortgage  lien  for  the  balance.  If  one  holding  a  bond 
and  mortgage  as  collateral  security  for  an  amount  less  than  that 
secured  by  the  mortgage  recovers  a  judgment  merely  for  the 
amount  of  the  debt  due  to  himself,  the  satisfaction  of  it  does  not 
extinguish  the  mortgage  lien  for  the  balance.''' 

938.  Judgment  under  trustee  process.  —  A  mortgagor  may 
be  held  to  answer  to  a  trustee  process  brought  by  a  creditor  of 
the  mortgagee  whenever  he  would  be  chargeable  if  the  debt  were 
not  secured,  and  a  payment  under  such  process  will  discharge 
the  mortgage  pro  tanto.^  The  judgment  obtained  in  the  trustee 
process  does  not,  until  it  is  satisfied  wholly  or  in  part,  affect  the 
mortgage  lien.^  But  where  the  mortgagor  being  delayed  in  such 
process,  and  arrested  for  the  debt  and  committed  to  prison,  from 

1  Davis  V.  Maynard,  9  Mass.  242.  <>  Applegate  v.  Mason,  13  Ind.  75. 

2  Thornton  v.  Pigj,',  24  Mo.  249.  i  Brumagim  v.  Chew,  19  N.  J.  Eq.  130. 
'  Sibley  y.  Rider,  54  Me.  463 ;  Yeomans         »  ^aton   v.  Whiting,   3   Pick.   (Mass.) 

V.  Rexford,  35  Pa.  St.  273.  484.     Otherwise  if  the  debt  be  not  liable 

*  People  V.  Beelje,  1  Barb.  (N.  Y.)  379.  to   the   process  and   the  trustee   pay  the 

6  Staciipole   V.  Robbins,  47   Barb.   (N.  judgment  in  his  own  wrong. 

Y.)  212 ;  48  N.  Y.  665.  »  Watkins  v.  Cason,  46  Ga.  444. 
42 


CHANGES   IN   THE   FORM    OF   THE   DEBT.       [§§  939-942. 

which  he  was  discharged  on  taking  the  poor  debtor's  oath,  and  the 
judgment  was  thereupon  released  to  him  by  the  creditor,  this  con- 
stituted no  defence  to  an  action  on  the  mortgage.^ 

939.  Proceedings  against  the  mortgagor  personally  by  a 
suit  upon  the  mortgage  debt,  and  his  commitment  to  prison  upon 
execution,  do  not  discharge  the  mortgage. ^ 

940.  Release  of  judgment.  —  But  it  is  generally  held  that  the 
release  of  a  judgment  recovered  upon  the  mortgage  debt  dis- 
charges the  mortgage.^  The  mortgagee's  acknowledgment  of  sat- 
isfaction of  judgment  is  not,  howev^er,  conclusive.* 

Whether  a  foreclosure  commenced  by  entry  under  process  of 
law  is  waived  by  a  subsequent  release  of  the  judgment  is  a  ques- 
tion of  fact  for  the  jury,  when  the  evidence  as  to  the  object  of 
the  continued  possession  is  conflicting.^ 

941.  The  failure  to  charge  an  indorser  who  has  made  a  mort- 
gage to  secure  the  notes  indorsed  by  him  does  not  discharge  the 
lien  of  the  mortgage.^ 

942.  The  extension  of  the  time  of  payment  of  a  mortgage  in 
no  way  impairs  the  security  as  against  subsequent  incumbrancers, 
even  if  this  be  effected  by  a  renewal  of  the  mortgage  note.'^  It 
of  course  does  not  impair  the  security  as  against  the  mortgagor 
when  the  debt  extended  is  his  own,  and  he  remains  primarily 
liable  for  it.  But  the  rule  is  different  when  he  has  mortgaged 
his  property  to  secure  tlie  debt  of  another.^  In  such  case  the 
mortgagor  occupies  the  position  of  a  surety  of  the  debt,  and  an 
extension  of  the  time  of  payment  of  that  debt  without  the  surety's 
concurrence  discliarges  the  mortgage ;  as,  for  instance,  where  a 
"wife  moi'tgages  her  land  to  secure  notes  indorsed  by  her  husband 
or  any  renewals  of  them,  an  extension  of  the  time  of  payment 
without  a  renewal  was  held  to  discharge  her  liability  ;  ^  and  in  an 
ordinary  mortgage  not  providing  for  any  renewal  or  continuance 

1  Gary  v.  Prentiss,  7  Mass.  63.  508;  Cleveland  t;.  Martin,  2  Head  (Tenn.), 

2  Davis  V.  Battine,  2  R.  &  My.  76.  128  ;  Naltner  v.  Tai)i)ey,  55  Ind.  107. 

8  Porter  y.  Perkins,  5  Mass.  236.  «  Gahn  v.   Niemcewicz,  11    Wend.  (N. 

*  Perkins  v.  Pitts,  11  Mass.  125.  Y.)  312  ;  S.  C.  3  Paige,  614  ;  Christncr  v. 

6  Couch  V.  Stevens,  37  N.  II.  169.  Brown,  16  Iowa,  130;  Metz  v.  Todd,  36 

6  Mitchell  V.  Clark,  35  Vt.  104  ;  Hilton  Mich.  473.. 

V.  Catherwood,  10  Ohio  St.  109.  »  See   §  742;   Smith   v.  Townscnd,  25 

^  Bank  of  Utica  v.  Finch,  3  Barb.  (N.  N.  Y.  479 
Y.)  Ch.  293 ;  Whittacre  v.  Fuller,  5  Minn. 

43 


§  94;).]  PAYMENT    AND   DISCHARGE. 

of  it,  any  extension  by  renewal  or  otherwise  without  her  consent 
would  release  her  property.^ 

6.  Revivor  of  Mortgage. 

943.  A  mortgage  after  payment  becomes  functus  officio, 
and  neither  the  mortgagee  nor  any  one  else  has  as  a  general  rule 
any  power  to  transfer  it  as  a  subsisting  security,  or  to  revive  it  to 
secure  the  same  or  any  other  liability.^  A  mortgage  given  to  se- 
cure the  repayment  of  a  legacy  in  case  such  payment  should  prove 
to  be  invalid  is  functus  officio  upon  a  final  decision  being  made 
sustaining  the  payment,  and  cannot  be  enforced  by  an  assignee.^ 

Such  was  also  the  decision  where  a  mortgagor  paid  and  took  up 
the  mortgage  note  and  the  next  day  redelivered  it  to  the  mort- 
gagee, took  back  part  of  the  money  paid  on  the  note,  had  the  bal- 
ance indorsed  upon  it,  and  agreed  with  the  mortgagee  that  the 
mortgage  should  remain  as  security  for  the  money  repaid  to  him, 
and  for  a  collateral  liability  incurred  by  the  mortgagee  for  him  ; 
a  creditor  who  had  attached  the  land,  or  levied  an  execution  upon 
it,  or  obtained  any  other  incumbrance  upon  it,  is  entitled  to  hold 
it  discharged  of  the  mortgage.*  It  is  not  in  the  power  of  the 
mortgagee,  by  reloaning  the  money  paid,  to  revive  the  mortgage 
to  the  prejudice  of  a  bond  fide  incumbrancei.*  whose  claim  is  sub- 
sequent to  the  mortgage  but  prior  to  the  repayment ;  and  it  is  im- 
material that  no  receipt  of  payment  has  been  indorsed  upon  the 
mortgage,  or  upon  the  bond  or  note,  if  the  debt  has  in  fact  been 
once  paid.^  But  a  payment,  to  have  the  effect  of  discharging  the 
debt,  must  be  made  to  the  creditor ;  and  therefore  if  the  principal 
debtor  upon  a  joint  note  secured  by  a  mortgage  of  the  property 
of  the  other  joint  maker,  pay  the  amount  of  the  debt  to  the  mort- 
gagor, who  obtains  an  extension  of  the  mortgage,  thereupon  the 
latter  becomes  the  principal  debtor,  and  the  former  principal 
debtor  the  surety.  The  mortgage  continues  because  there  has 
been  no  payment  of  the  mortgage  debt.^ 

1  BankofAlbionv.Burns,  46N.  Y.  170.         4  Bowman  v.  Manter,  33  N.  H.  530; 

2  McGiven  v.   Wheelock,  7   Barb.   (N,     Warner  v.  Blakcman,  36  Barb.  (N.   Y.) 
Y.)    22;   Mead    v.    York.    6    N.    Y.   449;     501. 

Ledyard  v.  Chaidn,  6  Ind.  320;  Thomas's  &  Gardner  v.  James,  7  R.  I.  396  ;  Large 

Appeal,  30  Pa.  St.  378;  Perkins  v.  Sterne,  v.  Vandoren,  14  N.  J.  Eq.  208  ;  Kellogg 

23  Tex.  561  ;  Fewell  v.  Kessler,  30  Ind.  v.  Ames,  41  Barb.  (N.  Y.)  218;  Purser  v. 

195  ;  Pelton  v.  Knapp,  21  Wis.  63.  Anderson,  4  Edw.  (N.  Y.)  Ch.  17. 

3  Rickard  v.  Talbird,  Rice  (S.  C.)  Ch.  e  Fields  v.  Sherrill,  18  Kans.  365. 
158 

44 


REVIVOR    OF   MORTGAGE.  [§§  944,  945. 

944.  When  the  mortgage  debt  is  once  paid,  though  the 
mortgagor  takes  an  assignment  of  the  mortgage  to  himself, 
he  cannot  reissue  the  mortgage  by  assigning  it  to  a  third  per- 
son, so  as  to  operate  to  defeat  the  claims  of  prior  or  intervening 
creditors  ;^  nor  can  he  revive  it  to  the  prejudice  of  others  by  re- 
paying the  money  to  the  mortgagee  and  agreeing  with  him  that 
the  mortgage  shall  stand  as  security.^  But  if  the  rights  of  third 
persons  have  not  intervened,  the  mortgage  might  be  kept  alive  in 
this  way  ;  or  for  a  valuable  consideration  might  be  continued  for 
another  debt.  Thus,  a  mortgage  debt  being  due,  the  mortgagor 
delivered  a  thousand  dollars  to  the  mortgagee,  which  after  retain- 
ing a  few  days  he  returned  to  the  mortgagor  at  his  request,  and 
it  was  not  indorsed  upon  the  mortgage.  Although  as  between 
the  parties  there  would  be  no  difficulty  in  continuing  the  mort- 
gage lien  for  the  whole  amount  of  the  mortgage  as  against  other 
creditors  of  the  mortgagor,  the  payment  is  deemed  to  have  been 
made  upon  the  mortgage  debt,  and  the  redelivery  of  the  money 
does  not  revive  the  mortgage  lien.^ 

945,  If  an  assignment  be  made  at  request  of  mortgagor  to 
another  creditor  of  his,  although  the  consideration  for  the  assign- 
ment moves  from  the  mortgagor  and  not  from  the  assignee,  the 
transaction  does  not  amount  to  a  payment  of  the  mortgage,  but 
the  assignee  may  enforce  it.*  In  such  case,  especially  if  the  ar- 
rangement for  the  subsequent  transfer  of  the  mortgage  be  made 
at  the  time  it  was  originally  given,  the  mortgage  will  be  kept  alive 
and  the  benefit  of  it  secured  to  the  subsequent  assignee  to  the  ex- 
clusion of  the  mortgagor's  creditors.^ 

And  so  if  a  mortgagor  upon  paying  the  mortgage  debt  has  the 
mortgage  assigned  to  a  third  person,  and  afterwards  borrows 
money  of  anotlier  and  has  the  mortgage  transferred  to  him  as  se- 
curity for  this  loan,  the  latter  assignment  gives  new  life  to  the 
mortgage,  although  it  was  of  no  validity  in  the  hands  of  the  for- 
mer assignee.^ 

1  Gardner  v.  James,  7  R.  I.  396 ;  Carl-  »  Marvin   v.  Veddcr,   sxipra ;    and   see 

ton  V.  Jackson,  121   Mass.  592  ;  and  see  Darst  i?.  Gale,  83  111.  13G. 

Whitney  v.  Franklin,  28  N.  J.  Eq.  126.  *  Sheddy  v.  Geran,  113  Mass.  378. 

••2  Marvin   v.   Vedder,    5  Cow.   (N.  Y.)  &  Hubbeil  r.  Blakcslee,  71  N.  Y.  63. 

671  ;  Mead  v.  York,  6  N.  Y.  449 ;  Cliamp-  «  Bolles'v.  Wade,  4  N.  J.  Vj[.  (3  Green) 

ney  v.  Coope,  32  N.  Y.  543,  reversing  34  458  ;  and  sec  Hoy  /;.  Bramhail,  19  lb.  74, 

Barb.  539  ;  Bowman  v.  Manter,  33  N.  II.  563  ;  Goulding  v.  Biinstur,  9  Wis.  513. 
530. 

45 


§  946.]  PAYMENT   AND   DISCHARGE. 

946.  Redelivery  of  note.  —  Where  a  mortgiige  note  is  found 
among  the  mortgagor's  papers  after  his  death,  tlie  presumption,  in 
the  absence  of  all  evidence  of  the  time  and  manner  of  payment, 
is  that  it  was  paid  according  to  its  terms ;  and  the  estate  of  the 
mortgagee  is  thereupon  terminated  without  a  release.  A  return 
of  the  note  by  the  heirs  of  the  mortgagor  to  the  heirs  of  the 
mortgagee  would  not  revive  the  mortgage,  as  that  was  extin- 
guished.^  By  the  performance  of  the  condition  of  a  mortgage 
the  condition  is  saved,  and  the  mortgagor  is  in  of  his  former 
estate.  The  mortgage  cannot  be  continued  in  force  by  parol 
agreement,  even  if  the  note  be  reissued  for  value.^ 

After  a  mortgage  has  been  paid  and  discharged,  it  would  seem 
that  to  revive  it  the  same  formalities  of  an  instrument  under  seal 
are  necessary  as  were  requisite  to  create  the  mortgage  in  the 
first  instance.  Effect  may  in  some  instances  be  given  to  an  in- 
strument made  with  the  intention  of  reviving  the  mortgage  by 
declaring  it  to  be  an  equitable  mortgage.  This  was  done  in  a 
case  where  the  owner  of  the  equity  of  redemption,  who  had  as- 
sumed the  payment  of  the  mortgage,  paid  the  first  of  the  three 
mortgage  notes  to  the  mortgagee,  who  wrote  upon  it  a  receipt  of 
payment,  and  surrendered  it.  The  owner  of  the  equity  subse- 
quently obtained  a  loan  of  money,  and  by  an  agreement  between 
him,  the  mortgagee,  and  the  person  making  the  loan,  the  receipt 
of  payment  was  erased,  and  an  indorsement  of  the  note  made  to 
the  lender,  with  an  agreement  made  by  all  the  parties,  but  not 
under  seal,  written  upon  the  back  of  the  note,  whereby  the  mort- 
gagee assigned  the  note  and  the  incident  security  in  the  mortgage 
and  extended  the  time  of  payment  as  to  the  mortgagor,  with  the 
understanding  that  tue  payment  of  this  note  should  be  postponed 
to  that  of  the  two  other  notes.  Although  the  agreement  could 
not  operate  in  the  way  intended,  as  a  revival  of  the  mortgage, 
effect  was  given  to  it  as  an  agreement  to  charge  the  lands  as  an 
equitable  mortgage.^ 

When  by  any  arrangement  between  the  mortgagee  and  mort- 
gagor the  mortgage  is  continued  in  force  as  a  security  for  a  new 
indebtedness,  although  the  mortgage  has  no    binding  force  as  a 

1  Richardson  v.  City  of  Cambridge,  2  Furbush  v.  Goodwin,  25  N.  H.  425.  See, 
Allen  (Mass.),  118.  however,  Turser  v.  Anderson,  4  Edw.  Ch. 

2  Holman  v.  Bailey,  3  Met.  (Mass.)  55  ;     17. 

Merrill  v.   Chase,  3  Allen   (Mass.),  339  ;         8  Peckham  v.  Haddock,  36  111.  38. 

46 


REVIVOR    OF   MORTGAGE.  [§§  947,  948. 

mortgage,  yet  a  court  of  equity  will  not  aid  the  mortgagor,  who 
has  obtained  the  mortgagee's  money  upon  the  strength  of  such 
arrangement,  in  obtaining  a  release  or  discharge  of  the  mortgage  ; 
nor  will  it  aid  one  to  do  this  who  has  taken  a  conveyance  of  the 
land  from  the  mortgagor  with  a  knowledge  of  the  facts.^ 

947.  After  a  mortgage  is  once  paid,  whether  it  can  by  a 
mere  verbal  agreement  of  parties  be  transferred  to  a  new 
debt,  which  it  was  not  originally  given  to  secure,  may  be  ques- 
tioned,^  but  the  mortgage  cannot  be  retained  against  the  will  of 
the  mortgagor  as  security  for  another  debt.^  A  mortgage  upon  a 
homestead  once  paid  cannot  be  revived  by  the  agreement  of  the 
husband  alone,  either  verbal  or  written,  where  a  statute  provides 
that  an  alienation  of  the  homestead  shall  not  be  valid  without  the 
signature  of  the  wife.     The  wife's  assent  is  necessary .^ 

This  rule  applies  as  well  to  an  absolute  deed  and  parol  defea- 
sance. Such  a  mortgage  when  once  paid  cannot,  without  consent 
of  all  persons  interested  in  the  property,  be  held  for  another  debt 
of  the  grantor,  but  he  can  compel  a  reconveyance.^ 

A  mortgage  for  a  definite  sum,  after  the  payment  of  that  sum, 
cannot  be  held  as  security  for  a  further  indebtedness  without  an 
agreement  to  that  efifect.  "  There  never  was  a  case,"  says  Lord 
Eldon,^  "  where  a  man  having  taken  a  mortgage  by  a  legal  con- 
veyance was  afterwards  permitted  to  hold  the  estate  as  further 
charged,  not  by  a  legal  contract,  but  by  inference  from  the  pos- 
session of  the  deed."  Something  more  than  a  subsequent  verbal 
agreement  is  necessary  in  order  to  mak^  the  mortgage  available 
for  future  liabilities.'^ 

A  purchaser  of  land  subject  to  a  mortgage  having  paid  the 
mortgage  notes,  and  afterwards  obtained  a  loan  upon  them  by 
representations  leading  to  the  beUef  that  the  mortgage  was  still  a 
subsisting  lien,  is  estopped  from  showing  and  insisting  upon  the 
fact  of  the  payment  of  the  notes.  It  would  be  a  fraud  on  his  part 
thus  to  contradict  a  statement  to  the  injury  of  another  who  had 
been  influenced  to  act  upon  the  statement  as  true.^ 

948.  Generally  the  chief  difficulty  in  reviving  or  continuing 

1  Joslyu  V.  Wyrnan,  5  Allen  (Mass.),  62.  6  Hooper,  ex  parte,  19  Ves.  477. 

2  Joslyu  y.  Wyinan,  supra;  Merrill  v.  ''  Johnson*!;.  Anderson,  30  Ark.  745; 
Chase,  3  II).  339.  Whiting  v.  Beebe.  12  Ark.  428;  Walker 

3  Beardsley  v.  Tiittle,  11  Wis.  74.  v.  Snediker,  1  Iloff.  (N.  Y.)'Ch.  145. 

*  S[)encer  v.  Fredendall,  15  Wis.  666.  8  International  Bank  v,  Bovven,  80  111. 

^  Spencer  o.  Fredendall,  supra.  541. 

47 


§  949.]  PAYMENT   AND   DISCHARGE. 

in  force  a  mortgage  which  has  been  substantially  satisfied  is 
on  account  of  the  intervening  rights  of  third  persons,  which 
Avoiild  be  thereby  injuriously  affected.  The  condition  of  a  mort- 
gage having  been  performed,  a  subsequent  incumbrancer  has  the 
right  to  avail  himself  of  the  advantage,  and  not  to  be  postponed 
to  equities  newly  created  which  in  fact  are  subsequent  to  liis  own 
claim. 1  Thus,  a  mortgage  given  to  idemnify  the  mortgagee  for 
his  liability  as  an  indorser  of  the  mortgagor's  note  cannot,  after 
the  payment  of  that  note,  be  assigned  for  the  mortgagor's  benefit 
as  security  for  another  debt,  as  against  the  holder  of  a  second 
mortgage  upon  the  estate  then  of  record,  although  as  between  the 
mortgagor  and  the  assignee  it  would  be  a  good  security .^ 

The  question  in  these  cases  is  whether  the  original  debt  has 
been  satisfied  within  the  terms  of  the  mortgage.  It  does  not  mat- 
ter whether  this  has  been  accomplished  by  payment  in  money, 
or  by  the  acceptance  of  anything  else  in  its  place.  Other  secu- 
rity may  be  taken  in  place  of  the  original  debt,  under  agreements 
or  circumstances  which  make  the  acceptance  of  the  new  security 
a  discharge  of  the  old ;  and  whenever  this  happens  the  original 
mortgage  cannot,  as  against  third  persons  especially,  be  dealt  with 
as  a  subsisting  security .^  But  where  the  original  mortgage  sur- 
rendered before  maturity  remains  uncancelled  of  record,  and  the 
mortgage  notes  are  reissued,  the  indorsers  of  those  notes  and  the 
holders  of  them  may,  under  some  circumstances,  have  priority  over 
a  mortgage  subsequently  executed,  the  mortgagor  and  the  sub- 
sequent mortgagees  being  equitably  estopped  to  claim  that  the 
original  mortgage  was  discharged."^ 

949.  A  -wife  who  mortgages  her  separate  property  to  se- 
cure her  husband's  debt  is  a  surety,  and  as  such  is  entitled  to 
the  benefit  of  all  securities  which  the  creditor  receives  from  her 
husband  for  the  debt ;  and  therefore  the  proceeds  of  other  security 
for  the  debt  should  be  first  appHed  to  relieve  her  estate ;  and  al- 
though an '  application  to  the  payment  of  a  further  debt  of  the 
husband  made  with  his  approval  is  binding  against  him,  as  against 

1  Jones  V.  Brogan,  29  N.J.  Eq.  139.  So  3  McGiven  v.  Wheelock,  7  Barb.  (N. 
a  grantor  after  payment  by  a  purchaser  Y.)  22  ;  Hodgman  v.  Hitchcock,  15  Vt. 
who  had  assumed  the  mortgage.    Swope  v.     374. 

Leffiiigwr  11,  4  Mo.  App.  .52.5.  *  Jordan  v.  Forlong,  19  Ohio  St.  89. 

2  Purser  v.  Anderson,  4   Edw.  (N.  Y.) 
Ch.  17. 

48 


FORECLOSURE   DOES  NOT   CONSTITUTE   PAYMENT.         [§  950. 

the  wife  it  is  a  perversion  of  the  security,  and  operates  to  dis- 
charge, to  the  extent  of  it,  the  lien  upon  her  land.^ 

A  wife  having  joined  in  a  mortgage  to  release  her  right  of 
homestead  and  right  of  dower  in  land  mortgaged  by  her  husband, 
to  secure  his  indebtedness,  is  entitled  to  the  benefit  of  payments 
made  upon  the  mortgage  and  indorsed  upon  the  note;  so  that 
without  her  consent  the  mortgagee  and  her  husband  cannot,  bv  a 
subsequent  arrangement,  apply  the  payment  made  upon  the  mort- 
gage debt  to  another  indebtedness,  and  agree  that  the  mortgage 
shall  stand  security  for  the  original  amount  of  the  debt.  In  a  sub- 
sequent foreclosure  the  mortgage  can  be  enforced  as  against  the 
husband  according  to  the  agreement  made  by  him  ;  but  as  against 
the  wife  only  for  the  balance  of  the  mortgage  after  the  payment 
made  upon  it.^ 

7.  Foreclosure  does  not  constitute  Payment. 

950.  A  foreclosure,  whether  strict  or  otherwise,  does  not 
of  itself  discharge  the  mortgage  debt.'^  The  mortgagee  may 
sue  for  and  recover  the  debt  or  the  balance  of  it.  A  foreclosure 
sale,  either  by  decree  of  court  or  under  a  power,  fixes  the  amount 
of  the  deficiency.  After  a  strict  foreclosure  a  suit  at  law  may  be 
maintained  for  any  deficiency  which  may  be  proved  in  the  suit. 
The  commencement  of  the  action  for  the  debt  does  not  of  itself 
destroy  the  effect  of  a  strict  foreclosure,  but  the  mortgagor  is 
thereupon  entitled  to  bring  his  bill  for  a  redemption,  and  upon 
a  payment  of  the  whole  debt  to  have  a  reconveyance  ;  but  if  he 
does  not  so  elect,  and  a  judgment  be  recovered  against  him  for 
the  difference  only  between  the  estimated  value  of  the  estate  and 
the  debt,  there  is  no  equity  in  allowing  him  thereafter  to  redeem.* 

Foreclosure  when  complete  is  a  satisfaction  of  the  debt  to  the 
amount  of  the  value  of  the  property,  at  the  time  when  the  mort- 
gagor's right  was  extinguished,  and  when  the  mortgaged  prem- 
ises are  of  greater  value  than  the  debt,  of  course  the  debt  is  fully 
satisfied.^     If  the  property,  after  the  extinction  of  the  equity  of 

1  Purvis  V.  Carstaphan,  73  N.  C.  575.         macher  v.  Ingle,  20  Ind.  135.   But  in  Mas- 

2  Brockschmidt  v.  Hagebusch,   72  111.     sachusetts  a  judgment  for  the  debt  or  any 
^^2.  part  of  it  opens  a  foreclosure  by  entry  and 

^  §1567;  Strong  v.   Strong,  2  Aikens,  possession.     §1274. 

(Vt.)  373;    Smith  v.  Lamb,  1    Vt.  395;  *  Lovell  w.  Leland,  3  Vt.  581. 

Vansant  y.  AUmon,  23  111.  30;  Brown  v.  6  Lovell  v.   Leland,   supra;     Hatch   v. 

Wernwag,   4  Blackf.    (Ind.)    1;    Nunc-  White,  2  Gall.  C.  C.  152  ;  Amory  ?;.  Fair 


VOL.    II.  4 


49 


§  951.]  PAYMENT   AND  DISCHARGE. 

redemption,  depreciate  in  value,  the  loss  falls  upon  tlie  mortgagee 
and  not  upon  the  mortgagor. 

In  Connecticut  the  law  at  one  time  was  that  a  foreclosure  and 
possession  of  the  mortgaged  property  extinguished  the  mortgage 
debt ;  ^  but  this  was  long  since  changed  by  a  statute  providing 
that  the  property  should  be  held  to  be  taken  at  its  value  only, 
and  so  much  of  the  debt  as  remained  should  stand  as  before.^  If 
the  value  of  the  property  exceeds  the  debt,  the  foreclosure  when 
absolute  operates  even  at  law  as  a  payment  of  the  debt.^  But 
until  the  title  of  the  mortgagee  has  become  absolute  by  the  ex- 
piration of  the  time  limited  for  redemption  after  a  decree  of  fore- 
closure, the  debt  is  not  satisfied  even  in  part.*  The  purchase  of 
the  equity  of  redemption  by  the  mortgagee  at  a  sale  by  the  mort- 
gagor's assignee  in  insolvency  or  on  execution  is  not  at  law  a  satis- 
fiiction  of  the  mortgage  debt,  and  the  mortgagee  is  not  estopped 
from  claiming  that  the  property  is  of  less  value  than  the  amount 
of  the  debt.5 

951.  The  union  of  the  titles  of  the  mortgagor  and  mort- 
gagee in  the  latter  or  his  assignee  is  tantamount  to  a  fore- 
closure, and  is  payment  of  the  mortgage  debt  to  the  extent  of  the 
value  of  the  premises.^  Especially  if  the  mortgagee  takes  a  re- 
lease of  the  equity  of  redemption  by  a  deed  reciting  a  full  con- 
sideration and  containing  full  covenants,  the  mortgage  debt  will 
be  presumed  to  be  discharged,  in  the  absence  of  very  strong  proof 
to  the  contrary.  The  fact  that  no  demand  for  the  debt  is  made 
for  a  long  time  afterwards  strengthens  the  presumption.'  Not 
infrequently  it  is  expressly  agreed  between  the  parties  that  the 
premises  shall  be  taken  in  satisfaction  of  the  mortgage  debt ;  ^  in 
which  case  the  deed  of  release  from  the  mortgagor  may  well  de- 
banks,  3  Mass.  562  ;  Dunkley  v.  Van  Bu-  "^  §  848  ;  Spencer  v.  Harford,  4  Wend, 
ren,  3  Johns.  Ch.  330 ;  Hurd  v.  Coleman,  (N.  Y.)  381  ;  Marston  v.  Marston,  45  Me. 
42  Me.  182  ;  Green  v.  Cross,  45  N.  H.  574.     412;  Puffer  v.  Clark,  7  Allen  (Mass  ),  80. 

1  Derby  Bank  v.  Landon,  3  Conn.  62  ;  See  Cattel  ?;.  Warwick,  6  N.  J.  L.  (1  Halst.) 
Coitw.  Fitch,  Kirby( Conn.),  255;  M'Ewen  190;  Hatz's  Appeal,  40  Pa.  St.  209  ;  Post 
V.  Welles,  1  Root  (Conn.),  202.  v.  Tradesmen's  Bank,  28  Conn.  420. 

2  Post  V.  Tradesmen's  Bank,  28  Conn.  ''  Burnet  v.  Denniston,  5  Johns.  (N. 
420.  Y.)  Ch.  35.     See,  also,  Loomer  v.  Wheel- 

8  Bassett  v.  Mason,  18  Conn.  131.  wright,  3  Sandf.  (N.  Y.)  Ch.  135;  Brewer 

*  Peck's  Appeal  from  Probate,  31  Conn.  v.  Staples,  lb.  579  ;  Jennings  v.  Wood,  20 

215.  Ohio,  261  ;  Corwin  v.  Collett,  16  Ohio  St. 

5  Post  i;.  Tradesmen's  Bank,  28  Conn.  289. 

420 ;  Findlay  v.  Hosmer,  2  Conn.  350.  «  Catlin  v.  Washburn,  3_Vt.  42. 

50 


FORECLOSURE   DOES   NOT   CONSTITUTE   PAYMENT.       [§§  952,  953. 

clare  this  fact.  Where  another  mortgage  is  held  as  collateral  to 
that  which  is  satisfied  by  a  release  of  the  equitj^  of  redemption 
such  collateral  mortgage  is  thereby  discharged. ^ 

952.  When  foreclosure  is  made  by  entry  and  possession 
the  moi-tgage  debt  is  thereby  paid  in  full  or  in  part,  according  to 
the  value  of  the  laud,^  but  the  foreclosure  must  be  complete  and 
the  title  of  the  mortgagee  indefeasible,  before  any  defence  of  pay- 
ment can  be  set  up  by  the  mortgagor  by  reason  of  the  proceed- 
ings to  foreclose.^  The  value  of  the  property  is  ascertained  by 
appraisement,  when  suit  is  brought  for  the  debt.  But  if  a  mort- 
gagee who  has  never  entered  under  his  own  mortgage  purchases 
the  title  of  a  prior  mortgagee  who  has  foreclosed  his  mortgage, 
and  afterwards  brings  suit  on  his  own  mortgage  note,  the  mort- 
gagor is  not  allowed  to  prove,  as  evidence  that  such  debt  is  paid, 
that  the  mortgaged  premises  and  the  rents  and  profits  received  by 
the  mortgagees  are  of  greater  value  than  the  sums  secured  by 
both  mortgages,  for  by  the  conveyance  from  the  prior  mortgagee 
the  second  mortgagee  obtained  an  absolute  title  wholly  indepen- 
dent of  his  own  mortgage.* 

A  mortgage  and  note  assigned  as  collateral  security  for  a  debt 
become  a  trust  in  the  hands  of  the  assignee  for  the  benefit  of  all 
parties  interested  ;  and  if  the  assignee  forecloses  the  mortgage  by 
entry  and  three  years'  possession,  the  relation  of  the  parties  is 
not  changed,  but  the  property  as  well  after  foreclosure  as  before 
is  held  in  trust ;  first  to  pay  the  debt  for  which  it  is  pledged,  and 
then  the  surjjlus  to  the  owner  :  such  foreclosure  does  not  operate 
as  payment  of  the  debt  ;  but  the  property  must  still  be  reduced 
to  cash  by  a  fair  and  proper  sale  of  it.  Any  rise  in  value  in 
mean  time  is  the  assignor's  gain,  and  any  decline  in  price  is  his 
loss.  The  payment  dates  only  from  the  actual  sale  of  the  prop- 
erty and  conversion  into  money. ^ 

953.  Generally,  upon  a  foreclosure  sale  of  the  property  the 
mortgage  debt  is  extinguished  to  the  amount  of  the  purchase 
money ,^  whether  the  sale  be  under  a  power,  or  by  a  decree  of  a 

1  Wheelwright  V.  Loomer,  4  Edw.  (N.         ^  Hedge    v.   Holmes,  10   Pick.  (Mass.) 
Y.)   Ch.   2.'}2;  McGiven   v.   Wheelock,   7     380. 

Barb.  (N.  Y.)  22.  6  Brown  v.  Tyler,  8  Gray  (Mass.),  135. 

2  Newall  V.  Wright,  3  Mass.  150;  Am-         «  Deare  v.  Carr,  3  N.  J.  Eq.  (2  Green) 
ory  V.  Fairbanks,  3  Mass.  562.  513  ;  Pierce  v.  Potter,  7  Watts  (Pa.),  475  ; 

8  West  i>.  Chamberlin,  8  Pick.   (Mass.)     Bergtr  y.    Hiester,  6    Whart.    (Pa.)    210; 
336.  Mott  V.  Clark,  9    Pa.  St.  399;  Hartz  v. 

61 


§  953.]  PAYMENT   AND   DISCHARGK. 

court  of  equity  in  a  foreclosure  suit,  or  upon  a  judgment  for  the 
debt.  If  the  debt  be  fully  paid  by  such  sale,  it  seems  that  the 
purchaser  is  not  entitled  to  hold  the  note  or  bond  for  the  greater 
security  of  his  title  without  the  debtor's  assent,  inasmuch  as  he 
is  entitled  to  have  this  evidence  of  the  debt  delivered  up  to  him 
and  cancelled. 1  If  upon  a  foreclosure  sale  duly  made  the  full 
amount  of  the  mortgage  debt,  together  with  the  expenses  of  the 
sale,  be  received,  the  mortgage  debt  is  paid  ;  and  if  the  mortgagee 
himself  bids  the  full  amount  of  the  debt  secured  and  the  expenses 
of  sale,  the  debt  is  paid,  and  he  cannot,  by  refusing  to  execute  the 
deed,  rescind  the  sale  and  maintain  an  action  on  the  note.^  The 
mortgagee,  on  becoming  the  purchaser,  is  bound  to  complete  his 
purchase  to  the  same  extent  as  any  other  purchaser.^ 

A  foreclosure  sale  properly  made,  whether  under  a  power  or 
by  decree  of  court,  discharges  the  mortgage  lien  if  the  whole  es- 
tate be  sold.  Even  if  only  a  part  of  the  mortgage  debt  is  due, 
and  a  sale  of  the  whole  property  be  made  to  satisfy  the  amount 
then  due,  the  sale  of  necessity  releases  the  security  for  the  amount 
not  due.^  Likewise  if  a  decree  of  sale  be  obtained  upon  the  last 
of  a  series  of  mortgage  notes,  without  including  those  which  had 
previously  matured,  a  sale  under  it  wholly  releases  the  lien  of  the 
mortgage,  and  no  foreclosure  can  afterwards  be  had  upon  the 
other  notes.^  For  a  further  reason  should  a  foreclosure  for  a 
part  of  the  notes  operate  as  a  release  of  the  mortgage  lien,  when 
the  holder  of  the  remaining  note  becomes  the  purchaser  of  the 
premises  and  receives  the  deed  of  it,  inasmuch  as  he  would  be 
presumed  to  have  bought  the  land  at  its  value,  less  the  unpaid 
note.^ 

When  a  foreclosui-e  sale,  either  under  a  bill  in  equity  or  under 
a  power  conferred  in  the  mortgage,  is  defective  for  any  reason, 
so  that  the  purchaser,  although  he  takes  a  conveyance  under 
the  sale,  does  not  acquire  an  indefeasible  title,  he  nevertheless 
thereby  acquires  the  mortgage  title.  The  sale,  therefore,  does  not 
amount  to  a  payment  in  whole  or  in  part,  but  only  to  an  assign- 
ment.'^   If  the  mortgagee  himself  has  purchased  at  such  such  sale, 

Woods,  8  lb.  471;  Wing   v.   Hayford,  124         *  Smith  v.  Smith,  32  III.  198. 
Mass.  249.  ^  Rains  v.  Mann,  68  111.  264. 

1  In  re  Coster,  2  Johns.    (N.    Y.)    Ch.         «  Robins  y.  Swain,  68  111.  197. 

503,  ''  See   §  812 ;  see,  however,   Goodenow 

2  Hood  V.  Adams,  124  Mass.  481.  v.  Ewer,  16  Cal.  461. 
8  Hood  V.  Adams,  supra. 

62 


FORECLOSURE  DOES   NOT   CONSTITUTE   PAYMENT.         [§  954. 

and  the  equity  of  redemption  for  any  reason  is  in  no  part  fore- 
closed, his  title  remains  unaffected  by  the  proceedings.^ 

When  a  sale  under  a  power  has  not  been  conducted  in  a  man- 
ner to  obtain  the  real  value  of  the  property,  or  the  sale  is  merely 
a  nominal  one,  it  is  a  good  defence,  to  an  action  to  recover  the 
balance  of  the  debt,  that,  if  the  sale  had  been  made  in  good  faith, 
the  property  would  have  sold  for  more  than  enough  to  pay  the 
debt.2  The  holder  of  the  mortgage,  in  making  sale  of  the  prop- 
erty, is  bound  to  adopt  all  reasonable  modes  of  proceeding,  in 
order  to  render  the  sale  as  beneficial  as  possible  to  the  debtor. 
As  a  trustee  he  caimot,  unless  specially  authorized,  become  the 
purchaser  ;  and  this  objection  is  not  obviated  by  his  assigning  the 
mortgage  to  another  who  makes  the  sale  and  he  purchases  the 
property  under  its  value.  In  a  suit  for  the  balance  of  the  debt, 
such  facts  may  be  shown  and  the  actual  value  of  the  land  must  be 
allowed. 

Of  course  when  proceedings  for  the  foreclosure  of  a  mortgage 
have  been  set  aside  on  account  of  irregularities  or  fraud  in  such 
proceedings,  the  mortgage  remains  unsatisfied  in  any  part,  as 
much  as  if  no  attempt  to  foreclose  had  been  made,  and  the  mort- 
gagee may  again  proceed  to  enforce  it.^ 

The  statute  of  limitations  may  be  pleaded  in  bar  of  an  action 
to  recover  the  balance  due  after  the  value  of  the  land  has  been 
applied  towards  the  payment  of  the  mortgage^ 

954.  If  the  holder  of  a  first  mortgage  purchase  the  equity 
of  redemption  at  a  sale  upon  execution,  the  sale  being  made 
subject  to  the  mortgage,  the  purchase  operates  as  a  payment  of 
the  mortgage  debt,  and  he  has  no  further  remedy  on  the  debt.^ 
In  like  manner  if  the  holder  of  one  note  secured  by  the  mortgage 
purchase  at  a  sale  upon  foreclosure  for  the  other  notes.^  The  pur- 
chaser is  presumed,  in  such  case,  to  have  bought  the  land  at  its 
value  less  the  unpaid  note.     The  mortgagee's  purchase  of  prem- 

1  Hollister  v.  Dillon,  4  Ohio  St.  197.  *  Cross  v.  Gannett,  39  N.  H.  140. 

2  Howard  v.  Ames,  3  Met.  (Mass.)  308.  5  gpger  v.  Whitfield,  10  N.  J.  Eq.  (2 
Chief  Justice  Shaw,  commenting  upon  the  Stock.)  109  ;  Biggins  v.  Brockmau,  63  111. 
evidence  in  this  case,  said  :  "  It  shows  that  316  ;  Murphy  v.  Elliott,  6  Blackf.  (Ind.) 
it  is  the  plaintiffs  own  fault  that  the  debt  482. 

is  not  fully  paid."  o  Robins  !;.' Swain,  09  111.  197  ;  and  see 

3  Stackpole  v.  Robbins,  47    Barb.   (N.     Weiner  w.  Heintz,  17  111.  259. 
Y.)  212. 

53 


§§  955,  956.]  PAYMENT    AND   DISCHARGE. 

ises  at  a  foreclosure  sale,  though  for  a  less  sum  than  was  secured 
by  the  mortgage,  extinguishes  the  lien  of  the  mortgage.^ 

955.  If  the  mortgaged  property  be  sold  for  taxes,  and  tlie 
mortgagor  buys  in  the  land,  or  subsequently  redeems  it  from  such 
sale,  he  does  not  thereby  defeat  the  mortgage  title,  but  inasmuch 
as  it  is  his  duty  to  pay  the  taxes  and  protect  the  mortgage  title, 
his  purchase  must  be  regarded  merely  as  a  payment  of  the  taxes 
by  him. 2  Whether  a  tax  is  a  lien  upon  the  entire  estate,  or  only 
upon  the  equity  of  redemption  of  the  owner  to  whom  the  tax  is 
assessed,  depends  upon  the  special  statutes  of  the  different  states 
regulating  this  matter  ;  ^  but  even  when  the  lien  for  taxes  is  su- 
perior to  the  mortgage  lien,  it  is  usual  to  allow  to  the  mortgagee 
a  certain  time  for  redemption  after  actual  notice  to  him  of  the 
sale. 

And,  on  the  other  hand,  if  the  mortgagee  acquires  a  tax  title  to 
the  mortgaged  premises,  this  is  regarded  as  merely  in  protection 
of  his  mortgage  title,  and  not  as  a  bar  to  the  mortgagor's  redeem- 
ing. Upon  redemption,  however,  the  mortgagor  must  pay  the 
sum  advanced  for  the  tax  title  in  addition  to  the  mortgage  debt. 
The  same  rule  applies  when  tlie  mortgage  is  by  way  of  an  abso- 
lute deed  with  a  bond  of  defeasance.* 

8.    Who  may  receive  Payment  and  7nake  Discharge. 

956.  Payment  should  be  made  to  the  person  to  whom  the 
mortgage  debt  is  due.  Even  if  the  mortgage  itself  has  not  been 
assigned,  if  the  debtor  has  knowledge  that  the  debt  has  been  as- 
signed, and  is  held  by  a  person  other  than  the  mortgagee,  who 
appears  by  record  to  be  the  holder  of  the  mortgage,  he  must  pay 
to  the  assignee  of  the  debt  without  regard  to  the  ownership  of 
the  mortgage,  as  it  appears  by  the  records.  Generally  a  discharge 
of  the  mortgage  would  be  tendered  with  a  demand  for  the  pay- 
ment of  it ;  but  even  if  this  be  not  done,  the  debtor,  when  satis- 
fied of  the  right  of  the  holder  of  the  debt,  may  pay  to  him,  and 
rely  upon  the  statutory  provisions  for  enforcing  a  discharge  of 
record.  As  already  observed,  payment  alone,  even  at  common 
law,  when  made  in  accordance  with  the  condition  of  the  mortgage, 

1  Seligman  v.  Lanbheimer,  58   111.  124.         8  gee  Parker  v.  Baxter,  2  Gray  (Mass.), 

2  See  §  680;  Frye  v.   Bank  of  Illinois,     185 ;  Perry  v.  Brinton,  13  Pa.  St.  202. 

11  111.  367;  Hawkins  v.  McVae,   14   La.         ^  Clark  v.  Laughlin,  62  111.  278.     See 
Ann.  339.  ^  714. 

54 


WHO   MAY    RECEIVE   PAYMENT   AND    MAKE   DISCHARGE.       [§  957. 

discharges  the  mortgage  lien  ;  and  in  many  of  the  states  payment 
at  any  time  has  the  same  effect.  If  the  debtor  be  in  doubt  to 
whom  to  make  payment,  or  as  to  obtaining  a  sufficient  discharge 
of  the  lien,  he  may  resort  to  a  bill  to  redeem. 

In  making  a  payment  upon  a  mortgage  the  debtor  should  al- 
ways require  the  production  of  the  note  or  bond  secured  by  it, 
otherwise  it  may  turn  out  that  this  evidence  of  the  debt  has  been 
assigned,  or  perhaps  that  a  formal  assignment  of  the  mortgage 
has  been  made  and  recorded  ;  and  although  the  mortgagor  is  pro- 
tected in  making  payment  to  the  mortgagee  until  he  has  received 
notice  of  the  assignment  of  the  mortgage,^  yet  this  notice  may 
be  constructive  as  well  as  actual,  and  the  debtor  always  incurs 
much  risk  in  making  payments  without  having  actual  knowledge 
that  the  person  to  whom  he  makes  payment  actually  holds  the 
mortgage  at  the  time.^ 

A  married  woman  holding  a  mortgage  as  her  separate  estate 
can  of  course  receive  payment ;  but  as  a  general  rule  a  discharge 
of  the  mortgage  should  be  executed  by  her  in  the  manner  pre- 
scribed by  statute  for  a  conveyance  of  her  separate  estate.  Her 
separate  discharge,  like  her  separate  receipt  of  the  debt,  might  be 
equitably  sufficient,  even  under  laws  which  make  her  separate  con- 
veyance ineffectual.  But  where  it  is  necessary  to  a  valid  convey- 
ance of  her  separate  property  that  her  husband  should  join  in  the 
deed,  it  is  proper,  and  generally  necessai'y,  that  he  should  join  in 
her  discharge  of  a  mortgage.  The  necessity  for  this  may  be  done 
away  with  by  special  statute,  as  is  the  case  in  Pennsylvania.^  Of 
course  in  states  where  a  married  woman  can  convey  her  separate 
estate  as  if  she  were  sole,  she  can  alone  make  a  valid  discharge. 

957.  When  a  recorded  mortgage  is  discharged  by  a  person 
other  than  the  mortgagee,  the  person  paying  the  money,  and  all 
subsequent  purchasers  as  well,  are  bound  to  inquire  what  author- 
ity he  had  to  discharge  it,  and  are  chargeable  with  notice  of  such 
facts  as  by  proper  inquiry  might  have  been  ascertained.*  If  the 
discharge  is  made  by  one  professing  to  act  in  a  representative 
capacity,  as,  for  instance,  as  administrator  or  guardian,  and  he  has 

^  Hodgdon  v.  Naglee,  5  W.  &  S.  (Pa.)  mortgage,  may  assign  or  satisfy  the  same 

217.  of  record,  with  like  effect  as  if  she  were 

2  Clark  V.  Igelstrom,  51   How.   (N.  Y.)  unmarried.     Pardon's  Ann.  Dig.  p.  2136, 

Pr.  407.     See§  814.  §  1. 

^  Any   married    woman,   owning    any  *  Swarthout  v.  Curtis,  5  N.  Y.  301. 

65 


§  957.]  PAYMENT   AND   DISCHARGE. 

not  been  empowered  to  act,  or  lias  been  empowered  to  act  only- 
after  giving  a  bond,  and  has  failed  to  comply  with  this  require- 
ment, the  discharge  will  not  bind  those  whom  he  represents,  and 
will  not  protect  one  who  afterwards  purchases  in  good  faith. ^  In 
like  manner  when  moneys  have  been  invested  by  a  clerk  or  other 
officer  of  court,  under  its  direction,  in  his  own  name,  an  order  of 
court  would  generally  be  necessary  to  empower  him  to  discharge 
it,  and  his  discharge  without  such  order  would  be  void,  even 
against  subsequent  purchasers  in  good  faith.^ 

A  mortgagee,  with  notice  that  a  prior  mortgage  has  been  im- 
properly discharged  without  being  satisfied,  still  holds  subject  to 
that  mortgage  as  much  as  if  no  discharge  had  been  made  ;  ^  if,  for 
instance,  he  has  notice  that  the  prior  mortgage  has  been  assigned 
as  collateral  security,  and  the  assignment  not  being  recorded,  the 
assignor  enters  satisfaction  of  it  on  record,  this  does  not  deprive 
the  assignee  of  his  priority  of  claim.  The  discharge,  however, 
would  bar  all  equitable  rights  of  the  assignor,  and  the  assignee 
could  recover  only  to  the  extent  of  his  actual  interest  in  the  mort- 
gage.^ 

And  yet  the  cases  go  further  than  this,  and  hold  that  an  entry 
of  satisfaction  by  a  mortgagee,  after  he  has  parted  with  his  inter- 
est in  the  security,  will  not  discharge  the  mortgage  in  favor  of  one 
who  had  acquired  an  interest  in  the  land  before  the  discharge  was 
made.  He  is  no  worse  off  than  he  supposed  himself  to  be  when 
he  acquired  his  interest ;  and  there  is  no  reason  in  equity  why  the 
person  really  entitled  to  the  mortgage  should  not  have  the  benefit 
of  it  so  far  as  he  is  concerned.  But  the  case  is  quite  otherwise 
when  one  has  purchased  the  land  in  good  faith  after  such  entry  of 
satisfaction  and  relying  upon  it,  having  no  notice  of  the  assign- 
ment, or  of  any  want  of  authority  in  the  making  of  such  entry. 
The  effect  of  the  discharge  cannot  be  avoided  as  against  him.^ 

A  mortgage  given  by  a  trustee  to  his  cestui  que  trust,  condi- 
tioned for  the  faithful  execution  of  the  trust,  cannot  be  discharged 
by  his  paying  the  money  to  himself,  nor  by  his  receiving  the  money 
from  a  purchaser  of  the  property .^ 

1  Swarthout  v.  Curtis,  5  N.  Y.  301.  4  Gibson  v.  Miln,  1  Nev.  526. 

2  Farmers'  Loan  &  Trust  Co.  v.  Wal-         s  Roberts  v.  Halstead,  9  Pa.  St.  32. 
worth,  1  N.  Y.  433.  6  Hawkins  v.  Taylor  (Ga.  1878),  7  Re- 

8  Morgan  v.  Chamberlain,  26  Barb.  (N.     porter,  105. 
Y.)  163  ;  Ely  v.  Scofield,  35  lb.  330. 
56 


WHO   MAY    RECEIVE   PAYMENT    AND   MAKE   DISCHARGE.       [§§  958,  959. 

958.  A  mortgage  held  by  two  or  more  persons  jointly  to 
secure  a  joint  debt  may  be  paid  to  any  one  of  them,  and  he  can 
effectually  discharge  it,  either  by  an  entry  upon  the  record  or  by 
a  deed  of  release.^  As  between  the  mortgagees,  he  who  receives 
payment  is  a  trustee  for  the  benefit  of  all  who  have  an  interest  in 
the  fund  ;  but  this  does  not  concern  the  mortgagor,  who  may  deal 
with  one  as  representing  all.  Upon  the  death  of  one  of  two  joint 
holders  of  the  mortgage,  the  survivor  has  the  exclusive  right  to 
receive  payment  and  discharge  the  mortgage.^  When,  however, 
the  mortgage  secures  notes  or  other  obligations  which  are  held  by 
the  mortgagees  separately,  it  is  necessary  that  all  of  them  should 
join  in  receiving  payment  and  in  making  discharge  of  the  mort- 
gage ;  3  and  of  course,  upon  the  death  of  the  holder  of  a  separate 
obligation,  his  representatives  must  join  in  a  discharge. 

When  one  mortgagee  assents  to  a  release  made  by  a  joint  mort- 
gagee, and  receives  a  part  of  the  money  paid  to  obtain  it,  having 
knowledge  of  the  facts,  he  is  bound  by  the  release,  even  in  case 
the  release  alone  would  not  bind  him.* 

Where  there  ai-e  two  or  more  joint  mortgagees,  who  are  each 
owners  in  severalty  of  a  part  of  the  mortgage  debt,  one  of  them 
may  so  act  as  to  merge  his  own  mortgage  interest  without  affect- 
ing that  of  another.^ 

959.  One  of  two  executors  may  receive  payment  of  a  mort- 
gage belonging  to  the  estate  under  their  charge,  and  give  a  valid 
release,  whether  the  mortgage  was  made  to  the  testator  or  to  the 
executors  as  such  ;  and  an  administrator  has  the  same  power.^ 
This  is  so  even  where  the  will  makes  the  executors  trustees,  and 
directs  them  to  retain  the  mortgage,  with  other  securities,  for  the 
purposes  of  the  trust,  unless  it  appears  that  the  estate  has  been  set- 

1  Goodwin  v.  llichanison,  11  Mass.  »  Burnett  v.  Pratt,  22  Pick.  (Mass.) 
469;  Bruce  v.  Eonney,  12   Gray  (Mass.),     556.     See  §  794. 

107.     lu  Massachusetts  this  authority  is  *  Hubbard  v.  Jasinski,  46  111.  160. 

given  by  statute   1870,  c.    171,  though  it  5  Loomer  v.  Wheelwright,  3  Sandf.  (N 

existed  before.     Carman  v.  Pultz,  21   N.  Y.)  Ch.  135. 

Y.  550;  People  v.    Keyser  28N.  Y.  235;  «  People  v.  Miner,  37    Barb.  (N.   Y.) 

Pierson  v.  Hooker,  3  Johns.  (N.  Y.)  68  ;  466  ;  23  How.  Pr.  223  ;  Bogert  v.  Hertell, 

Bulkley  v.   Dayton,  14  lb.  387  ;  Stuyve-  4  Hill  (N.  Y.),  492  ;  Douglass  v.  Satterlee, 

santr.   Hall,  2   Barb.   (N.  Y.)    Ch.    151;  11  Johns.  (N.  Y.)  16;  Murray  v.  Blatch- 

Bowes  V.  Seeger,  8  W.  &  S.  (Pa.)  222;  ford,  1   Wend.   (N.  Y.)  583;   Wheeler  v. 

Penn  v.  Butler,  4  Dall.  (Pa.)  354.  Wheeler,  9  -Cow.  (N.  Y.)  34;  People  v. 

2  Gilson  V.  Gilson,  2  Allen  (Mass.),  115  ;  Keyser,  28  N.  Y.  228.  In  this  latter  case 
Savary  v.  Clements,  8  Gray  (Mass.),  155  ;  the  previous  decisions  are  noticed  at 
People  y.  Keyser,  28  N.  Y.  235.  length.     See  §  796. 


0 


7 


§  9G0.]  PAYMENT   AND   DISCHARGE. 

tied,  and  that  the  securities  are  held  by  them  as  trustees,  or  that 
not  enough  securities  remain  in  their  hands  to  fulfil  the  trust. 
Primd  facie  the  discharge  is  valid.'  Trustees  must  generally,  in 
all  matters  which  involve  judgment  and  discretion,  act  jointly  ; 
but  under  some  circumstances  one  trustee  may  receive  payment 
of  a  mortgage  and  enter  satisfaction,  as,  for  instance,  when  he  is 
an  acting  trustee,  and  his  co-trustee  is  absent  from  the  country 
for  a  long  period. 

It  seems  that  an  executor  or  administrator  may  make  a  valid 
discharge  of  a  mortgage  which  a  mortgagee  held  as  "  trustee," 
when  there  is  nothing  to  show  the  nature  of  the  trust,  and  no  new 
trustee  has  been  appointed  to  execute  the  trust.^ 

960.  Whether  a  foreign  executor  or  administrator  can 
make  a  valid  discharge  of  a  mortgage  has  been  a  matter  of 
doubt.  Undoubtedly  his  receipt  for  the  money  discharges  the 
debt ;  but  under  the  present  system  of  recorded  titles  it  is  a  mat- 
ter of  importance  that  the  authority  of  the  executor  or  adminis- 
trator should  be  a  matter  of  record  in  the  state  where  the  land  is 
situated,  and  the  discharge  is  to  be  recorded  ;  and  for  this  reason 
it  is  necessary  to  require  an  administration  to  be  taken  upon  the 
estate  of  the  mortgagee  or  other  holder  of  a  mortgage  in  the  state 
where  the  mortgaged  premises  are  situate,  before  making  pay- 
ment of  the  incumbrance.^ 

While,  therefore,  an  executor  or  administrator  appointed  in  one 
state  may  receive  payment  of  a  mortgage  upon  land  in  another,  if 
it  be  voluntarily  made,  yet  the  courts  of  the  state  in  which  the 
land  is  situate  will  not  aid  him  in  enforcing  payment,  until  he  is 
authorized  to  act  under  the  appointment  of  the  proper  tribunal  of 
such  state.^ 

Doubtless  the  foreign  executor  or  administrator  might  exercise 
a  power  of  sale  ;  but  a  practical  difficulty  about  his  doing  so  would 
be  that  no  judicious  person  would  take  the  title  which  he  could 
give.  He  might  also  assign  the  mortgage  to  a  resident  of  the 
state  in  which  the  land  is  situated,  if  any  one  could  be  found  to 

1  Weir  V.  Mosher,  19  Wis.  311.  Y.),  549  ;  Doolittle  v.  Lewis,  7  Johns.  (N. 

2  Sturtevant  u.  Jaques,  14  Allen  (Mass.),  Y.)  Ch.  45  ;  Morrell  v.  Dickey,  1  lb.  l.'iS  ; 
523,  527.  Parsons  v.  Lyman,  20  N.  Y.  112;  Peter- 

3  See  §  797;  Hiitchins  v.  State  Bank,  sen  v.  Chemical  Bank,  32  N.  Y.  22;  29 
12  Met.  (Mass.)  421,  425.  See  Stone  j;.  How.  Pr.  240;  Vermiiyea  v.  Beatty,  6 
Scripture,  4  Lans.  (N.  Y.)  186.  Barb.  (N.  Y.)  429. 

*  Vroom  V.  Van  Home,  10  Paige  (N. 

58 


WHO   MAY   RECEIVE   PAYMENT   AND   MAKE   DISCHARGE.        [§§  961-963. 

take  such  an  assignment.  But  he  would  not  be  allowed  to  pros- 
ecute a  suit  in  his  representative  capacity  for  foreclosure  in  a  state 
where  he  had  not  received  appointment.^ 

961.  An  assignee  of  a  mortgage  by  a  formal  assignment  has, 
of  course,  the  right  to  receive  payment  and  power  to  make  due 
acquittance  of  it.  But,  as  already  noticed,^  although  his  assign- 
ment has  been  duly  recorded,  he  makes  himself  liable  to  loss  if 
he  fail  to  give  notice  to  the  debtor  of  his  ownership  of  the  secu- 
rity ;  for  until  he  do  this  the  debtor  is  justified  in  paying  to  the 
mortgagee,  only  that  in  making  payment  of  the  whole  amount  of 
the  debt  his  neglect  to  require  the  surrender  of  the  note  or  bond 
would  invalidate  the  payment.  Not  only  should  the  debtor  re- 
quire the  production  of  the  evidence  of  the  debt,  as  proof  of  au- 
thority to  receive  payment  of  it,  but  for  the  further  reason  that, 
upon  discharging  the  debt,  he  is  entitled  to  have  the  evidence  of 
it  delivered  up  to  be  cancelled.^ 

After  an  assignment  of  a  mortgage  no  transaction  between  the 
mortgagor  and  the  mortgagee  can  defeat  the  assignee's  right  to 
enforce  the  note  and  mortgage.  If  the  mortgage  be  transferred  at 
the  request  of  the  mortgagor  as  security  for  another  debt  of  his, 
and  the  mortgagee  is  secured  in  some  other  way,  or  is  paid,  the 
mortgage  remains  a  valid  security  in  the  hands  of  the  assignee.* 

962.  After  an  equitable  assignment  of  the  mortgage  by  an 
indorsement  of  the  mortgage  note,  or  by  a  delivery  of  it  merely 
with  a  power  of  attorney  to  collect  it  in  the  name  of  the  as- 
signor, a  payment  to  the  assignor  and  a  discharge  by  him  will  not 
discharge  the  mortgage.^  The  fact  that  the  mortgagor,  on  mak- 
ing payment  to  an  equitable  assignee  who  has  possession  of  the 
securities,  demands  and  receives  indemnity  against  loss,  knowing 
that  another  person  makes  claim  to  the  mortgage  by  a  formal  as- 
signment, is  not  a  suspicious  circumstance  affecting  the  validity  of 
the  equitable  assignment.^ 

963.  One  -who  holds  a  mortgage  by  assignment  as  col- 
lateral security  for  a  sum  smaller  than  the  mortgage  debt  may 
receive  payment,  or  may  compel  payment  by  foreclosure ;  and 
holding  the  mortgage    title   of  record  he  may  give    a  valid  dis- 

1  Trecothick  v.  Austin,  4  Mason,  16,  33.         ^  Cutler  v.  Haven,  8  Pick.  (Mass.)  490  ; 

2  See  §  791.  Gordon   v.   Mulhare,   13   Wis.    22.      See 
8  In  re  Coster,  2  Johns.  (N.  Y.)  Ch.  503.     §  817. 

*  Sheddy  v.  Geran,  113  Mass.  373.  ^  Haescig  v.  Brown,  34  Mich.  503. 

69 


§  964.]  PAYMENT   AND   DISCHARGE. 

charge.  If  he  collects  a  sum  more  than  sufficient  to  pay  the  debt 
due  him,  he  will  hold  the  surplus  in  trust  for  his  assignor.^ 

964.  Payment  may  be  made  to  a  duly  authorized  agent,  and 
his  agency  may  be  inferred  from  possession  of  the  securities. 
As  a  general  rule,  a  mortgage  debtor  is  authorized  to  iufer  that 
an  attorney  or  agent  who  has  been  employed  to  make  a  loan  and 
retains  possession  of  the  bond  and  mortgage  is  empowered  to 
receive  payment  of  both  the  interest  and  of  principal.^  But  this 
inference  is  founded  on  his  custody  of  the  securities,  and  it  ceases 
when  these  are  withdrawn  by  the  creditor  ;  ^  and  it  is  incumbent 
on  the  debtor  who  relies  upon  a  payment  so  made  to  an  attorney 
or  agent  to  show  that  the  securities  were  in  his  possession  when 
he  made  the  payment,  unless  the  action  of  the  creditor  be  such 
as  to  estop  him  from  denying  the  agency.*  The  son  of  a  mort- 
gagee in  possession  of  the  papers  is  presumed  to  have  authority 
to  receive  payments,  but  this  presumption  of  course  ceases  upon 
his  father's  death.^  A  legatee  who  is  entitled  to  the  interest  of 
a  mortgage  for  life,  having  possession  of  the  bond  or  note,  may 
be  presumed  to  be  authorized  to  receive  the  interest ;  but  this  pre- 
sumption would  not  extend  a  collection  of  the  principal.^ 

In  making  payments  to  an  agent  the  mortgage  debtor  should 
be  assui-ed  of  his  continued  authority  to  act  for  the  owner  of  the 
mortgage ;- and  such  assurance  of  this  as  may  be  derived  from 
his  possession  of  the  mortgage  note  or  bond,  and  indorsement 
thereon  of  the  payment,  would  be  omitted  only  through  great 
negligence.'''  Authority  of  an  agent  to  receive  interest  or  principal 
on  a  mortgage  cannot  be  inferred  from  the  fact  that  the  agent  had 
collected  and  paid  over  to  the  mortgagee  interest  on  other  mort- 
gages.^ Even  authority  to  collect  the  interest  upon  a  mortgage 
does  not  afford  ground  for  inferring  authority  to  collect  the  prin- 
cipal, where  the  agent  is  not  intrusted  with  the  possession  of  the 

1  Slee  V.  Manhattan   Co.  1   Paige  (N.         *  Haines  v.  Pohlmann,   25  N.  J.  Eq. 
Y.),  48 ;  Norton   v.  Warner,  3  Edw.  (N.     179  ;  Smith  v.  Kidd,  68  N.  Y.  130. 

Y.)  106.  5  Megary  v.  Funtis,  supra. 

2  Williams  v.  Walker,  2  Sandf.  (N.  Y.)  6  Qiddings  v.  Seward,  16  N.  Y.  365. 
Ch.  325 ;  Hatfield  v.  Reynolds,  34   Barb.  ^  gee   Kimball  v.  Goodburn,  32  Mich. 
(N.  Y.)   612;  Van  Keuren  v.  Corkins,  4  10,  as  to  discharge  of  a  mortgage  already 
Hun  (N.  Y.),  129  ;  66  N.  Y.  77.  paid,  executed  by  the  last  secretary  of  the 

3  Megary  v.  Funtis,  5  Sandf.  (N.  Y.)  company. 

Sup.  Ct.  376;  Brown  y.  Blydcnburgh,  7  *  Cox  v.  Cutter,  sfyjra ;  Smiths.  Kidd, 
N.  Y.  141 ;  Cox  v.  Cutter,  28  N.  J.  Eq.  13.     supra. 

60 


WHO    MAY    RECEIVE   PAYMENT   AND   MAKE   DISCHARGE.       [§  964. 

securities. 1  The  rule  has  been  strictly  adhered  to  in  all  the  ad- 
judged cases  that  the  possession  of  the  securities  by  the  agent  is 
the  indispensable  evidence  of  his  authority  to  collect  the  princi- 
pal.2  After  an  agent  has  without  authority  collected  the  prin- 
cipal of  a  mortgage,  and  the  mortgagee,  after  learning  the  fact, 
but  without  full  knowledge  of  all  the  material  facts  of  the  agent's 
wrongful  acts,  accepts  from  him  security  for  the  amounts  he  had 
collected,  such  acceptance  is  not  a  ratification  of  the  payment  to 
the  agent,  and  does  not  estojD  the  mortgagee  from  repudiating  it ; 
nor  does  it  furnish  evidence  of  the  agent's  original  authority  to 
receive  payment.^ 

If  payment  be  made  to  an  attorney,  by  giving  other  securities 
which  he  was  once  authorized  to  receive  in  settlement,  the  mort- 
gage is  satisfied,  where  the  circumstances  are  such  that  the  mort- 
gagor was  justified  in  supposing  that  the  attorney  still  had  author- 
ity to  settle  in  that  manner.*  In  like  manner,  where  an  attorney, 
foreclosing  his  client's  mortgage,  discontinued  the  suit  and  de- 
clared the  mortgage  paid,  upon  receiving  part  of  the  amount  due 
in  cash  and  the  balance  in  the  debtor's  note  to  himself  personally, 
by  way  of  a  loan  to  the  debtor,  the  mortgage  was  held  to  be  ex- 
tinguished.^ 

An  attorney  employed  to  foreclose  a  mortgage  cannot  with- 
out special  authority  receive  notes  for  the  amount,  or  extend  the 
payment  of  the  debt.^  He  can  only  receive  money  in  payment. 
After  receiving  a  part  of  the  debt  he  cannot  make  a  valid  exten- 
sion of  the  time  of  payment  of  the  residue ;  but  the  holder  of 
the  mortgage  may  proceed  to  foreclose  immediately.  The  mort- 
gagor is  in  law  affected  with  notice  that  the  attorney  has  no 
power  to  receive  notes  in  payment  or  to  extend  the  time  of  pay- 

^  Williams  y.  Walker,  2  Sandf.  Ch.  (N.  cicnt  to  warrant  a  finding  of  a  general 

Y.)  325;  Smith  r.  Kidd,  68  N.  Y.  130.  authority  to  collect  the  principal  of  all 

2  Curtis   V.   Drought,   1    Molloy,   487;  the  mortgages  of  the  client,  notwithstand- 

Henn  y.  Conisby,  I  Ch.  Cas.  93  n. ;  Gerard  ing  that  the  client  takes  the  precaution 

V.  Baker,  lb.  94 ;  Wosten holme  v.  Davics,  to  retain  his  securities  in  his  own  posses- 

2  Freem.  Ch.  289 ;  Smith  v.  Kidd,  supra,  sion,  no   investor  would  be  safe."     Per 

"Any  other  principle  would  be  dangerous  liapallo,  J.,  in  Smith  v.  Kidd,  supra. 

in  the  extreme.     If  the  fact,  that  a  cap-  *  Smith  v.  Kidd,  supra. 

italist    makes    investmenta   on   bond   and  *  Mallory47.  Mariner,  15  Wis.  172. 

mortgage  through  an  attorney,  and  em-  ^  Hawkes  v.  Dodge  County,  &c.  Ins.  Co. 

ploys  him  to  collect  the  interest,  and  in  11  Wis.  188. 

special  cases  authorizes  him  to  collect  the  ^  Ileyman  v.  Beringer,  1  Abb.  (N.  Y.) 

principal  of  particular  mortgages,  is  suffi-  N.  C.  315. 

61 


§§  965,  966.]  PAYMENT   AND   DISCHARGE. 

ment.  A  paj'ment  to  the  attorney  of  notes  so  taken  by  liirn  is 
not  a  payment  on  the  mortgage,  unless  the  holder  of  it  receives 
the  proceeds.^ 

965.  A  receiver  authorized  by  order  of  court,  upon  receiving 
payment  of  a  mortgage  debt,  to  execute  formal  satisfaction  and 
discharge  of  the  mortgage,  has  authority  to  receive  payment  and 
to  satisfy  the  mortgage  although  it  be  not  due  at  the  time.^ 

9.    Discharge  hy  Mistalce  or  Fraud. 

966.  A  discharge  obtained  by  fraud  or  made  through  mis- 
take may  be  cancelled  if  other  parties,  having  no  notice  of  the 
fraud,  have  not  in  the  mean  time  acquired  an  interest  in  the  prop- 
erty.^ The  cancellation  is  of  course  presumptive  evidence  that 
the  mortgage  has  been  actually  satisfied  ;  but  it  is  not  conclusive 
of  this.  The  burden  is  upon  the  person  who  would  impeach  the 
cancellation  to  show  that  the  mortgage  was  not  actually  paid,  and 
that  the  discharge  was  obtained  either  by  fraud  practised  upon 
the  holder  of  the  mortgage,  or  was  made  by  him  through  some 
mistake  of  fact.^ 

Of  course  an  unauthorized  cancellation  of  a  mortgage  by  the  re- 
corder does  not  in  any  way  impair  the  rights  of  the  owner  of  the 
mortgage,^  even  against  one  who  has  purchased  the  mortgaged 
premises  in  good  faith,  relying  upon  the  cancellation  appearing  of 
record.^ 

If  one  be  induced  by  the  fraudulent  representations  of  the 
mortgagor  to  deliver  up  the  mortgage  together  with  the  mortgage 
note,  and  to  take  instead  worthless  security,  the  mortgage,  not 
being  discharged  of  record  or  released  by  deed,  may  be  foreclosed 
as  a  subsisting  lien.'^  And  if  a  discharge  of  record  has  been 
made  by  the  mortgagee  upon  receiving  a  worthless  check  or  worth- 
less security,  the  mortgage  may  still  be  foreclosed,  if  no  one  has 
afterwards  acquired  an  interest  in  the  property,  relying  upon  the 

1  Hejman  v.  Beringer,  1  Abb.  (N.  Y.)         4  Lilly  v.  Quick,  1  Green  (N.  J.)  Ch.  97  ; 
N.  C.  315.  Trentou   Banking    Co.    v.  Woodruff,   lb. 

2  Hcermans  v.  Clarkson,  64  N.  Y.  171.       117;  Miller  v.  Wack,  Siixt.  (N.  J.)  204; 
8  Stover  V.  Wood,   26   N.   J.   Eq.  417;     Middlesex  v.  Thomas,  20  N.  J.  Eq.  39. 

McLean   v.  Lafayette  Bank,  3  McLean,  ^  Mechanics' Building  Ass.  y.  Ferguson, 

587;  Fassett   v.    Smith,   23   N.   Y.    252;  29  La  Ann.  548. 

Barnes  v.  Camack,  1   Barb.  (N.  Y.)  392;  «  Harris  v.  Cook,  28  N.  J.  Eq.  345. 

Weir  V.  Mosher,  19  Wis.  311  ;  Hollenbeck  "<  Grimes  v.  Kimball,  3   Allen  (Mass.), 

V.  Shoyer,  16  Wis.  499;  Vanuice  i-.  Ber-  518. 

gen,  16  Iowa,  555. 

62 


DISCHARGE   BY   MISTAKE   OR   FRAUD.  [§  967. 

discharge,  though  a  cancellation  of  the  discharge  might  first  be  ob- 
tained in  equity.^ 

A  release  executed  by  the  mortgagee  and  placed  in  the  hands 
of  a  third  person,  to  be  delivered  upon  certain  conditions  to  the 
mortgagor,  is  not  operative  if  delivered  before  the  performance  of 
the  conditions  ;  and  if  by  accident,  mistake,  or  fraud,  it  is  placed 
on  record  before  such  performance,  as  against  the  mortgagee  the 
court  will  order  the  discharge  to  be  cancelled.  A  judgment  cred- 
itor of  the  mortgagor  acquires  no  rights  or  advantage  by  the  re- 
cording of  the  release,  and  may  be  restrained  from  selling  any- 
thing more  than  the  equity  of  redemption.^  And  it  would  seem 
that  an  innocent  purchaser  would  not  be  protected  by  such 
record  of  the  release  before  delivery .^  It  is  likened  to  a  deed 
which  the  grantee  had  stolen,  where  no  title  is  thereby  acquired, 
and  it  is  distinguished  from  one  obtained  by  fraud  from  the 
grantor  when  the  title  passes  by  the  actual  delivery  of  the  grantor 
himself."* 

A  father  having  made  a  mortgage  to  his  daughter,  who  was  a 
minor,  for  the  consideration,  as  expressed,  of  natural  love  and 
affection,  afterwards  being  dissatisfied  with  her  marriage,  with- 
out authority  from  her,  entered  satisfaction  of  it  on  record.  The 
daughter  was  still  a  minor,  and  the  mortgage  note  had  never  been 
delivered  to  her,  although  the  mortgage  itself  had  been  delivered 
and  recorded.  Upon  suit  by  her  the  entry  of  satisfaction  was  set 
aside  as  fraudulent,  and  judgment  was  entered  for  the  amount  of 
the  note  and  interest,  and  enforced  against  the  property.^ 

967.  If  the  giving  up  of  the  mortgage  notes,  or  a  formal 
discharge  of  the  mortgage,  has  been  obtained  by  fraudulent 
means,  this  is  no  payment  and  discharge  of  the  mortgage.^  In 
such  case  a  subsequent  mortgagee,  whose  rights  existed  at  the 
time  of  such  discharge,  cannot  object  to  the  prior  mortgagee  being 
restored  to  his  rights.^     And  so  also  the  mortgage  will  be  reiu- 

1  Middlesex  V.  Thomas,  20  N.  J.  Eq.  39  ;  6  Grimes  u.  Kimball,  3  Allen  (Mass.), 
De  Yampert  o.  Browu,  28  Ark.  166.  518  ;  Weir  v.  Moslier,  19   Wis.  311 ;  and 

2  Stanley  v.  Valentine,  79  111.  544.  see  Eyre  v.  Burneester,  10   11.  L.  90;  8 
8  Stanley  v.  Valentine,  su/)m,  and  cases     Jiir.  N.   S.   1019;  Ileagan   f.  Hadley,  57 

cited.     See  §§  540,  541.  Ind.  509. 

*  Per  Mr.  Justice  Walker,  in  Stanley  v.  '  Downer  v.  Miller,  15  Wis.  612;  Rob- 
Valentine,  supru.  inson  v.   Sampson,   23    Me.  388 ;    Treu- 

6  Mallett  V.  Page,  8  lad.  364.  ton  Banking  Co.  v.  Woodruff,  2  N.  J.  Eq. 

63 


§  968.]  PAYMENT   AND   DISCHARGE. 

stated,  not  only  fis  against  the  mortgagor,  but  against  one  who 
has  purchased  from  him  with  notice  of  the  mortgage,  or  without 
giving  any  new  consideration,  and  in  whose  favor  no  new  rights 
have  intervened  since  the  release.^  Of  course  the  mortgage 
cannot  be  restored  as  against  one  wiio  has  in  good  faith  purchased 
the  property  after  the  canceUation,  or  has  advanced  money  upon 
it  upon  the  faith  of  a  clear  record  title.  The  mortgage  cannot 
be  restored  when  the  rights  of  innocent  third  persons  will  be 
affected.2  'Pl^g  holder  of  the  mortgage  wrongfully  discharged 
should  therefore  lose  no  time  in  taking  steps  to  have  his  mort- 
gage restored.^ 

A  judgment  creditor  of  the  mortgagor  would  not  by  virtue  of 
his  lien  stand  in  the  condition  of  a  purchaser  in  this  respect,  be- 
cause he  does  not  part  with  any  value  or  become  worse  off  by 
reason  of  the  discharge  of  the  mortgage.  But  a  purchaser  under 
execution  sale  would  have  the  right  to  stand  upon  the  record  title 
if  he  had.no  notice  of  the  equities  of  the  holder  of  the  notes,  and 
it  would  seem  that  the  judgment  plaintiff  himself,  purchasing  at 
the  judicial  sale,  would  have  this  right.* 

968.  When  a  mortgage  has  been  obtained  by  fraud  from 
the  mortgagor,  and  the  mortgagee  has  assigned  it  as  collateral 
security  to  one  who  is  not  shown  to  have  participated  in  the  fraud, 
or  to  have  known  of  it,  although  the  court  cannot  cause  the  mort- 
gage to  be  discharged  as  against  such  holder,  it  may  order  the 
mortgagee  who  fraudulently  obtained  it  to  pay  the  sum  secured  to 
the  holder  of  the  assignment  of  it,  and  to  cause  the  mortgage  to 
be  discharged  within  a  given  time.^ 

When  the  lien  cannot  be  restored,  either  wholly  or  in  part,  the 
mortgagor  is  entitled  to  recover  of  the  person  who  induced  the 
making  of  the  release  the  amount  of  the  security  released,  and 
not  merely  such  deficiency  as  may  result  on  the  mortgage.  Even 
when  a  part  of  the  mortgaged  premises  are  released,  and  the  part 
remaining  is  worth  more  than  the  mortgage  debt,  yet  so  far  as  the 

(1  Green)  117;  Eggeraan  v.  Harrow,  37  r.  Judson,  15  Hun  (N.  Y.),  328;  Etzler  v. 
Mich.  436.  Evans,  61  Ind.  56. 

1  Ellis'  V.  Lindley,  37  Iowa,  334  ;  Reed         ^  Viele  v.  Judson,  supra. 

V.  King,  23  Iowa,  500  ;  Reagan  v.  Hadley,  *  Vannice  v.  Bergen,  16  Iowa,  555.    Soe 

57  Ind.  509.  §  460. 

2  Schokfield  v.  Templer,  4  De  G.  &  J.  &  Mason  v.  Daly,  117  Mass.  403. 
429  ;  Fassett  v.  Smith,  23  N.  Y.  252 ;  Viele 

64 


DISCHARGE    BY    MISTAKE   OR   FRAUD.  [§  969. 

value  of  the  security  is  lessened  by  the  defendant's  fraud  or  bad 
faith,  the  mortgagee  is  entitled  to  recover.^ 

969.  To  entitle  one  to  relief  on  the  ground  of  mistake,  it 
must  be  a  mistake  of  fact  and  not  a  mistake  of  law :  thus  where  a 
husband,  under  the  erroneous  supposition  that  as  executor  of  his 
deceased  wife  he  was  liable,  paid  a  mortgage  upon  her  estate,  no 
relief  could  be  afforded  him  in  equity .^  For  mistakes  of  law, 
neither  courts  of  law  nor  of  equity  give  relief.  When  there  is  no 
mistake  nor  misrepresentation  as  to  the  facts,  and  no  fraud,  there 
is  no  redress.^  Upon  this  ground  relief  was  refused  to  one  who 
purchased  land  subject  to  a  mortgage,  and  supposing  that  he  had 
a  good  title  upon  paying  off  the  mortgage  had  it  cancelled  on  the 
record.  Afterwards  discovering  that  his  title  was  not  good,  he 
sought  to  have  this  cancellation  set  aside  and  the  mortgage  de- 
clared in,  force,  on  the  ground  that  had  he  then  known  of  the 
defect  in  his  title  he  would  have  taken  an  assignment  of  the  mort- 
gage to  protect  his  title ;  but  this  was  not  regarded  as  a  mistake 
as  to  a  matter  of  fact.'^  The  mistake  of  fact,  moreover,  must  be  of 
such  a  nature  that  it  could  not  by  reasonable  diligence  have  been 
avoided  at  the  time  ;  and  on  this  ground  the  court  refused  to  set 
aside  a  discharge,  voluntarily  made  by  the  holder  of  a  mortgage 
under  an  apprehension  that  the  debt  had  been  satisfied,  when,  as 
he  alleged,  it  had  not  been  satisfied.^ 

Relief  may  be  had  where  the  mortgagee  supposing  erroneously 
that  the  mortgage  had  been  foreclosed,  and  that  the  mortgagor 
was  entitled  to  the  notes,  has  delivered  them  up  without  pay- 
ment.^ In  like  manner  where  a  mortgagee,  upon  the  mortgage 
becoming  due,  by  agreement  with  the  mortgagor  took  the  mort- 
gaged property  in  satisfaction  of  it,  and  thereupon  executed  a 
release,  which  was  recorded,  the  release  was  ordered  to  be  can- 
celled, so  as  to  restore  the  mortgage  to  its  priority  over  other 
incumbrances  intervening  between  the  giving  of  this  mortgage 
and  the  satisfaction  of  it.^  The  ground  of  the  application  was 
the  fraudulent  concealment  of  the  existence  of  the  subsequent  in- 
cumbrances ;  but  mistake  would  also  be  a  sufficient  ground  for 

1  Stebbins  v.  Howe'.l,  4  Abb.  (N.  Y.)  *  Bentley  v.  Whittemore,  18  N.  J.  Eq. 
App.  Dec.  297.  366. 

2  Peters  v.  Florence,  38  Pa.  St.  194.  &  Banta  v.  Vreeland,  15  N.  J.  Eq.  103. 

3  Hampton  v.  Nicholson,  23  N.  J.  Eq.         «  Smith  v.  Smith,  15  N.  II.  55. 

423 ;  Railroad  Co.  v.   Soutter,  13   Wall.         '  Lambert  v.  Leland,  2  Sweeny  (N.  Y.), 
517.  218. 


VOL.  II. 


5  65 


§§  970,  971.]  PAYMENT   AND   DISCHARGE. 

it.  Relief  may  also  be  given  when  a  mortgagee  has  cancelled  the 
mortgage  and  given  up  the  note  or  bond,  on  receiving  a  check  or 
draft  or  other  security  for  the  amount  of  the  debt,  which  turns 
out  to  be  uncollectible  ;  and  this  would  be  given  whether  the 
check  was  given  with  a  fraudulent  intent,  or  whether  it  was  taken 
under  a  mistake  of  fact  on  both  sides  that  the  draft  was  good, 
when  it  proved  not  to  be  good  by  reason  of  the  failure  of  the 
bank.i 

One  who  paid  off  a  mortgage  on  land  which  he  supposed  be- 
longed to  his  wife,  who  was  a  widow  at  the  time  of  his  marriage 
with  her,  when  in  fact  it  belonged  to  her  daughter,  was  allowed 
the  amount  paid  with  interest  as  an  equitable  lien  upon  the  land.^ 

If  a  mortgagor  pays  a  note  through  mistake,  supposing  the  sig- 
nature to  be  genuine,  wlien  it  was  in  fact  forged  and  the  genuine 
note  had  been  transferred  to  another,  he  may  recover  tlie  money 
paid  in  an  action  for  money  had  and  received.^ 

970.  Relief  may  be  had  in  equity  against  a  discharge  of  a 
mortgage  made  by  mistake  or  through  ignorance,  when  an 
assignment  was  intended.*  But  in  the  absence  of  any  such 
ground  for  relief  a  mere  stranger  who  voluntarily  pays  off  a  mort- 
gage and  allows  the  mortgage  to  be  cancelled,  relying  upon  the 
validity  of  his  own  title  to  the  property,  cannot  afterwards  come 
into  equity  for  relief  and  ask  to  be  substituted  in  the  place  of  the 
mortgagee.^ 

The  allegation  of  mistake  is  supported  by  proof  that,  although 
the  mortgagee  intentionally  discharged  the  mortgage,  the  person 
who  was  to  pay  the  money  only  intended  to  purchase  the  mort- 
gage at  the  request  of  the  mortgagor,  and  accordingly,  on  the  note 
and  mortgage  being  brought  to  him,  declined  to  take  them,  but 
took  an  assignment  instead.  Under  the  prayer  for  general  relief 
the  mortgage  was  established,  and  the  mortgagor  restrained  from 
setting  up  the  discharge.^ 

971.  When  a  new  mortgage  is  substituted  in  ignorance  of 

1  Grimes  v.  Kimball,  3  Alien  (Mass.),  ley  v.  Bergen,  23  N.  J.  Eq.  397,  and  cases 
518;  Middlesex  v.  Thomas,  20  N.  J.  Eq.  cited  ;  Dubois  v.  Schaffer,  lb.  401 ;  Hamp- 
39,  and  see  Hunt  V.  Fox,  5  B.  Mon.  (Ky.ji  ton  v.  Nicholson,  lb.  423;  Skillnian  v. 
327  ;  Hollenbeck  v.  Shoyer,  16  Wis.  499.  Teeple,  Saxt.  (N  J.)  Eq.  232;  Champlin 

2  Haggerty  v.  McCanna,  25  N.  J.  Eq.  v.  Laytin,  18  Wend.  (N.  Y.)  407. 
48.  ^  Guy  V.  Du  Uprey,  16  Cal.  195. 

3  Welch  V.  Goodwin,  123  Mass.  71.  ^  Bruce  v.  Bonney,  12  Gray  (Mass.), 
*  llussell  V.  Mixer,  42  CaL  475 ;  Dud-     107. 

66 


DISCHARGE   BY   MISTAKE   OR   FRAUD.  [§  971. 

an  intervening  lien,  the  mortgage  released  through  mistake  may 
be  restored  in  equity  and  given  its  original  priority  as  a  lien. 
This  was  done  in  a  case  where  the  holder  of  a  first  mortgage,  in 
ignorance  of  the  existence  of  a  subsequent  one  on  the  premises, 
released  his  mortgage  and  took  a  new  one.  There  was  no  evi- 
dence of  mistake  except  such  as  might  be  inferred  from  the  mort- 
gagee's ignorance  of  the  existence  of  the  intermediate  mortgage, 
and  there  was  no  evidence  that  he  would  not  have  made  this  ar- 
rangement had  he  known  this  fact ;  but  it  was  considered  that 
although  the  court  was  not  at  liberty  to  infer  facts  not  proved, 
yet  that  it  was  at  liberty  to  draw  all  the  inferences  which  logic- 
ally and  naturally  follow  from  the  facts  proved  ;  that  it  is  not  an 
act  of  reasonable  prudence  and  caution  such  as  men  commonly 
use  in  the  conduct  of  business  affairs  for  one  having  a  first  mort- 
gage upon  property,  without  consideration  or  other  apparent  mo- 
tive to  release  it,  and  take  a  new  mortgage  subject  to  a  prior  lien 
of  a  considerable  amount ;  and  therefore  it  may  be  inferred  that 
the  mortgagee  would  not  have  made  the  release  had  he  known  of 
the  intervening  mortgage.^ 

Where  a  new  mortgage  is  taken  to  secure  the  payment  of  the 
same  debt,  and  the  fact  is  so  stated  in  the  mortgage,  the  old  mort- 

^  Bruse  v.  Nelson,  35  Iowa,  157.  some  way,  appear  of  record,  so  that  in 
In  this  case  the  original  mortgage  se-  every  case  in  which  the  claim  is  in  a  con- 
curetl  the  payment  of  three  notes  of  $919.50  dition  to  be  asserted  in  preference  to  the 
each.  Shortly  afterwards  the  mortgagee  mortgage,  the  mortgagee  has  the  means 
wishing  to  transfer  two  of  the  notes  to  a  of  ascertaining  its  existence.  The  argu- 
creditor  of  his,  it  was  arranged  between  ment,  then,  would  amount  to  this :  that  a 
the  parties  that  a  new  mortgage  should  be  mortgage  released  iu  mistake  could  never 
made  running  directly  to  this  creditor,  and  be  restored  against  a  prior  claim,  which 
that  he  should  loan  to  the  mortgagor  a  was  in  a  condition  to  become  a  lien.  In 
small  additional  sum  to  make  the  amount  other  words,  that  the  lien  of  the  mortgage 
of  the  mortgage  $2,000.  This  arrange-  could  never  be  restored,  except  when  the 
ment  was  carried  out,  and  the  old  mort-  restoration  is  unnecessary  and  unimpor- 
gage  was  entered  of  record  as  satisfied,  and  tant."  See,  also,  Causler  v.  Sallis,  54  Miss, 
the  mortgage  and  mortgage  notes  delivered  <i46.  See,  however,  §  927. 
up  to  the  mortgagor.  Beck,  C.  J.,  dissented,  on  the  ground 
It  was  urged  in  this  case  that  the  second  that  the  fact  of  the  mistake  was  a  matter 
mortgage  was  of  record,  and  that  the  prior  of  inference  alone  ;  and  that  relief  could 
mortgagee,  having  constructive  notice  of  be  had  only  against  a  mistake  clearly 
it  when  he  took  the  new  mortgage,  was  made  out  by  satisfactory  proof;  and  that 
not  entitled  to  relief.  "  This  position,"  the  mistake  must  be  of  some  matter  lead- 
says  Mr.  Justice  Day,  "proves  too  much,  ing  to  and  influencing  the  execution  of  the 
In  order  that  a  debt  may  attach  as  a  lien  release, 
prior  to  a  mortgage,  it  must  always,  in 

67 


I  972.]  PAYMKNT    AND   DISCIIAKGE. 

o-ao-e  not  remaining  as  the  evidence  of  that  debt,  but  is  released 
and  the  new  one  recorded  on  the  same  day,  tlie  new  mortgage 
will  have  priority  of  any  intervening  incumbrance. ^ 

If  money  is  borrowed  on  a  mortgage  for  the  purpose  of  paying 
off  a  former  mortgage  of  the  same  lands,  the  fact  that  an  inter- 
vening judgment  lien  was  overlooked  in  examining  the  title  will 
not  enable  the  mortgagee  to  set  up  in  equity  the  former  mortgage 
after  it  has  been  duly  discharged.^ 

10.  Form  and  Construction  of  Discharge. 

972.  Mode  of  effecting  a  discharge.^ —  Wherever  a  mortgage 
retains  its  common  law  character  of  a  conveyance  of  the  legal 
estate,  a  discharge  should  be  effected  either  by  a  deed  of  recon- 
veyance, or  by  an  entry  upon  the  records  in  the  manner  provided 
by  statute.  A  receipt  of  the  mortgagee,  though  executed  under 
seal,  while  it  is  evidence  of  payment  and  of  a  discharge  of  the 
mortgage  by  reason  of  the  payment,  does  not  after  breach  of  the 
condition  revest  the  title  in  the  mortgagor.*  It  is  not  even  con- 
clusive of  payment,  but  is  open  to  explanation.^  A  payment 
actually  received  may  be  regarded  as  an  equitable  release  of  the 
mortgage.^  A  mere  verbal  agreement  by  a  mortgagee  to  execute 
a  release,  though  made  for  a  valuable  consideration,  cannot  be  en- 
forced, as  it  is  void  under  the  statute  of  frauds.'^ 

No  precise  formality  in  making  a  release  of  the  lien  of  a  mort- 

1  Shaver  v.  Williams,  87  111.  469;  18  original  mortgage,  the  following  is  suiTi- 
Am.  L.  Reg.  (N.  S.)  132.  cient :  — 

2  Banta  v.  Garmo,  1  Sandf.  (N.  Y.)  Ch.  "  Know  all  men,  that  having  received 
383.  full  payment  of  the  debt  secured   by  this 

8  In  New  England  a  common  form  of  a  mortg.age,  I  do  hereby  cancel  and  discharge 

deed  of  release  to  discharge  a  mortgage  is  tlie  same,  and  release  and  quitclaim  to  the 

as  follows  :  "  Know  all  men  that  I  ,  within  named  mortgagor  and  his  heirs  all 

of  ,  the  mortgagee  named  in  (or  the  right  in  and  to  the  within  described  real 

assignee  of)  a  certain  mortgage  dated       ,  estate.     Witness,"  &c. 
and  recorded         ,  do  hereby  acknowledge         *  See  AUard  v.  Lane,  18  Me.  9. 
that  I  have  received  from        ,  the  mort-         ^  Perkins  v.  Pitts,  11  Mass.  125;    Por- 

gagor  named  in  said  mortgage,  full  pay-  ter  f.  Hill,  9  lb.  34 ;   Parsons  r.  Welles,  17 

ment  and  satisfaction  of  the  same;  and  in  lb. 419  ;  Pearce  v.  Savage,  45  Me.  90. 
consideration  thereof  I  do  hereby  cancel         ^  Marriott  v.  Handy,  8  Gill  (Md.),  31. 
and  discharge  said  mortgage,  and  release         "  Leavitt  v.  Pratt,  53  Me.  147  ;    Phil- 

and  quitclaim  unto  the  said         ,  and  his  lips  v.   Leavitt,  54   Me.   405;    Parker  v. 

heirs   and   assigns  forever,  the   premises  Barker,  2  Met.  (Mass.)  423;    Maynard  u. 

therein  described.     Witness  my  hand  and  Hunt,  5  Pick.  (Mass.)  240  ;  6  lb.  488.    See, 

seal  this  day  of        ,  187  ."  however,  Malins  v.  Brown,  4  N.  Y.  403. 

If  the  discharge  is  indorsed  upon  the 

68 


FORM   AND   CONSTRUCTION   OF  DISCHARGE.  [§  973. 

gage  is  necessary.  It  may  be  effected  by  a  reconveyance,  al- 
tliougli  the  only  mode  provided  by  statute  is  for  the  entry  of  satis- 
faction upon  the  margin  of  the  record.  But  this  method  is  not 
exclusive.  Release  may  be  made  of  the  whole  or  of  a  part  of  the 
mortgaged  premises  by  a  quitclaim  deed  from  the  mortgagee  to 
the  mortgagor.^ 

Ordinarily  a  deed  of  release  or  quitclaim  by  the  mortgagee  to 
the  mortgagor,  or  to  the  owner  of  the  equity  of  redemption,  will 
discharge  the  mortgage,  although  the  mortgagee  has  also  acquired 
some  other  claim  or  title  to  the  premises,  as,  for  instance,  the 
equity  of  redemption,  upon  which  the  deed  might  operate.  The 
deed  would  pass  his  entire  title.^  But  the  instrument  will  be 
construed  according  to  the  intention  as  manifested  by  the  whole 
instrument ;  and  therefore  where  a  mortgagee  holding  an  inde- 
pendent title  by  a  subsequent  mortgage  indorsed  upon  his  prior 
mortgage  a  discharge,  whereby  he  "  released  and  forever  quit- 
claimed "  all  his  "  right,  title,  and  interest  in  and  to  the  within 
described  premises,"  it  was  held  that  his  release  passed  only  his 
interest  in  that  mortgage  and  not  his  entire  interest.  The  natural 
import  of  the  words  used  was  satisfied  by  confining  the  effect  of 
the  release  to  the  mortgage  upon  which  it  was  written.^  But  a 
mere  attachment  which  has  not  ripened  into  a  title  would  not  be 
discharged  by  a  mortgagee's  release  of  all  his  "right,  title,  claim, 
and  demand  whatever  "  in  the  mortgaged  premises.*  The  mort- 
gagee's release  to  a  subsequent  mortgagee  without  any  transfer  of 
tlie  debt  operates  as  a  discharge  of  the  prior  mortgage.^  If  a  mort- 
gagee at  the  request  of  the  owner  of  the  equity  of  redemption, 
who  is  about  to  sell  the  pi-emises,  execute  to  the  purcliaser  a  bond, 
conditioned  that  the  vendor  should  save  the  grantee  harmless  from 
all  cost  and  damage  in  consequence  of  any  previous  incumbrance 
upon  the  premises,  the  effect  of  the  bond  is  to  release  the  land 
from  his  mortgage.^ 

973.  When  a  mortgagee  has  received  payment  of  a  mort- 
gage debt  after  maturity,  without  releasing  the  mortgaged 
premises,  wherever  the  common  law  view  that  he  holds  the  legal 
estate  prevails  he  becomes  a  trustee  of  the    mortgagor,  and  so 

1  Waters  V.  Jones,  20  Iowa,  363.  <  Lacey  v.  Toinlinson,  5  Day  (Conn.), 

2  "Woodbury  v.  Aikin,  13  111.  639.  77. 

'  BarnstaMe  Savings  Bank  v.  Barrett,         *  Hill  v.  West,  8  Ohio,  222. 
122  Mass.  172.     See  §  824.  «  Proctor  v.  Thrall,  22  Vt.  262. 

6y 


§  974.]  PAYMENT    AND   DISCHARGE. 

holds  the  title  until  he  releases  it.^  He  has  of  course  no  equitable 
interest ;  but  he  is  liable  to  the  penalties  imposed  by  statute  for 
not  disehargiug  tlie  mortgage  after  being  in  fact  paid  ;  and  he  is 
moreover  liable  to  an  equitable  suit  to  compel  a  discharge  or  re- 
conveyance.^ He  holds  the  legal  seisin  in  trust  for  the  mortgagor, 
and  the  court  will  not  permit  him  or  those  claiming  under  him  to 
set  up  this  legal  estate  to  defeat  the  possession  of  the  cestui  que 
trust.  The  equitable  estate  of  the  mortgagor,  which  in  courts  of 
equity  is  always  recognized,  and  is  protected  in  a  great  many 
ways,  in  courts  of  law  obtains  recognition  by  the  fiction  of  regard- 
ing the  mortgagee,  after  his  debt  is  satisfied,  as  a  trustee  of  the 
legal  estate  for  the  mortgagor.  Until  the  debt  is  paid,  the  legal 
seisin  of  the  mortgagee  is  but  a  mere  formal  title,  and  no  trust 
will  be  raised  for  the  benefit  of  the  mortgagor  until  the  purposes 
for  which  the  mortgage  was  made  is  answered.^ 

974.  Where  a  mortgage  is  regarded  as  merely  a  lien  upon 
the  land  and  not  a  conveyance  of  the  legal  estate,  a  discharge  may 
be  made  without  a  deed  ;  a  writing  not  under  seal  is  sufficient  ;* 
and  payment  without  any  writing  in  fact  discharges  the  mort- 
gage. Even  an  agreement  to  discharge  made  for  a  sufficient  con- 
sideration, when  the  debtor  has  fulfilled  his  part  of  the  agreement, 
may  operate  as  a  discharge,  upon  the  ground  that  equity  treats  as 
done  that  which  a  party  has  agreed  to  do  ;  therefore  where  the 
mortgagee  agreed  verbally  to  cancel  and  discharge  his  mortgage 
in  consideration  that  the  mortgagor  would  discharge  a  debt  due 
him  from  a  third  person,  and  the  mortgagor  discharged  his  claim, 
it  was  held  that  the  mortgage  was  thereby  discharged.^  Upon 
the  same  principle  it  is  held  that  a  mortgage  given  in  part  pay- 
ment of  the  price  of  other  land,  which  by  agreement  is  to  be  con- 
veyed to  the  mortgagor  upon  the  cancelling  of  that  agreement  by 
mutual  consent,  is  itself  annulled  and  discharged  unless  it  be  ex- 
pressly saved  and  continued.^ 

1  Armstrong?  v.  Peirse,  3  Burr.  1898;  *  Headley  v.  Goundry,  41  Barb.  (N.  Y.) 
Robinson  i;.  Cross,  22  Conn.  171 ;  Den  v.  279;  Ackla  v.  Ackla,  6  Pa.  St.  228; 
Dimon,  10  N.  J.  L.  (5  Halst.)  156  ;  Wolfe  Wentz  v.  Dehaven,  1  S.  &  R.  (Pa.)  312; 
V.  Dowell,  21  Mi.ss.  103  ;  Smith  v.  Otley,  Wallis  v.  Long,  16  Ala.  738  ;  and  see 
26  Miss.  291 ;  McNair  v.  Picotte,  33  Mo.  Thornton  v.  Irwin,  43  Mo.  1.53. 

57.  ^  Griswold   v.   Griswold,    7    Lans.    (N. 

2  McNair  y.  Picotte,  si/pra.  Y.)    72;    and  see   Swain   v.    Seamens,  9 
8  Harrison  v.  Eldredge,  2  Halst.  (N.  J.)     Wall.  254. 

407,  per  Ch.  J.  Kinsey  ;  Shields  i;.  Lozear,         ^  Eveland  v.  Wheeler,  37  N.  Y.  244. 
24  N.  J.  L.  496,  per  Depue,  J. 

70 


FORM   AND   CONSTRUCTION   OF   DISCHARGE.       [§§  975-977. 

Anything  which  amounts  to  payment  or  satisfaction  of  the  debt 
discharges  the  mortgage  lien.  If  a  judgment  for  the  debt  be  sat- 
isfied out  of  other  property  of  the  debtor,  the  mortgage  is  dis- 
charged ;  and  if  one  afterwards  purchases  the  property  in  good 
faith,  relying  upon  the  records  as  showing  that  the  execution  had 
been  returned  as  satisfied,  no  inquiry  can  be  made  as  against  him 
as  to  the  regularity  of  the  proceedings  in  which  the  judgment  was 
obtained.!  When  the  purposes  of  a  trust  deed  are  accomplished, 
the  owner  of  the  land,  without  any  action  on  his  part,  is  vested 
with  the  legal  title,  and  can  maintain  ejectment  upon  it.^ 

975.  In  case  of  a  mortgage  of  indemnity.  —  When  indem- 
nity has  in  fact  been  obtained,  although  not  by  a  compliance  with 
the  terms  of  the  contract  between  the  parties,  or  in  the  way  con- 
templated by  them,  the  object  of  the  mortgage  being  substan- 
tially and  fully  accomplished,  the  mortgage  is  extinguished.^ 

976.  Whether  a  general  release  from  all  claims  and  de- 
mands whatever,  made  by  the  holder  of  a  mortgage  to  the  mort- 
gagor, releases  the  mortgage  debt  or  not,  depends  upon  the  in- 
tention of  the  parties.  That  the  mortgage  debt  was  not  due  at 
the  time,  and  that  the  mortgage  was  not  delivered  up  or  cancelled, 
are  reasons  for  supposing  that  the  intention  was  not  to  release  the 
mortgage  debt.*  A  mortgage  is  discharged  by  the  creditor's  join- 
ing with  others  in  a  release  under  seal,  whereby,  for  value  re- 
ceived and  in  consideration  of  one  dollar,  he  releases  the  debtor 
from  indebtedness,  "  whether  on  book  account,  note  of  hand,  or 
any  other  way."  ^ 

It  is  competent  for  a  mortgagee  who  has  signed  a  general  re- 
lease or  a  composition  paper  in  behalf  of  the  mortgagor  to  show, 
by  parol  Evidence,  that  at  the  time  of  such  release  he  was  not  the 
owner  of  the  mortgage,  having  previously  sold  it ;  or  he  may,  in 
the  same  way,  show  that  the  validity  of  the  release  was  depend- 
ent upon  a  considei-ation  which  has  not  been  fulfilled.^ 

977.  Surrender  of  defeasance.  -^  When  a  mortgage  has  been 
made  by  giving  an  absolute  deed  and  taking  back  a  defeasance,  if 
this  has  not  been  recorded  the  parties  may  afterwards,  with  the 

1  Drifjgs  V.  Simson,3  Thomp.  &  C.  (N.  ^  Van  Bokkelen  v.  Taylor,  62  N.  Y. 
Y.)  786.  105,  reversin|V  S.  C.  2  Hun,  138. 

2  McNab  V.  Younj^,  81  111.  11.  »  Van  Bokkelen  v.  Taylor,  4  Thomp.  & 
'^  Aichambau  v.  Green,  21  Minn.  520.        C.  422. 

*  Mclntyrc  v.  Williamson,  1    Edw.  (N. 
Y.)  34. 

71 


§§  978,  979.]  PAYiMENT   AND   DISCHARGE. 

intent  to  vest  the  estate  unconditionally  in  the  grantee  by  force 
of  the  deed,  surrender  and  cancel  the  defeasance,  and  the  estate 
will  thereupon  become  absolute  in  the  mortgagee,  without  any 
further  act,  if  the  transaction  be  fairly  conducted  and  no  rights 
of  third  paitieshave  intervened.^  But  the  assignment  of  the  bond 
of  defeasance  to  an  assignee  of  the  mortgage  has  been  held  not  to 
operate  as  an  extinguishment  of  the  equity  of  redemption ;  but 
the  decision  is  questioned,  and  it  is  difficult  to  see  why  such  as- 
signment should  not  have  effect  equally  with  a  mere  surrender.^ 
When  the  debtor  has  paid  a  mortgage  made  in  the  form  of  an 
absolute  conveyance,  and  the  defeasance  has  not  been  recorded 
or  rests  in  parol,  the  only  relief  is  in  a  reconveyance,  which  the 
grantee  may  in  equity  be  compelled  to  execute.^ 

If  such  transactions  occur  between  the  parties  as  would  render 
it  inequitable  that  the  grantor  should  redeem,  that  itself  in  such 
case  operates  as  a  cancellation  of  the  defeasance,  and  gives  the 
deed  the  effect  of  an  original  absolute  conveyance.^ 

978.  The  mortgage  lien  may  of  course  be  cut  off  by  proper 
proceedings  had  for  that  purpose  under  a  prior  incumbrance. 
If  the  mortgagor,  however,  acquire  such  pi'ior  title,  he  would 
generally  be  estopped,  under  the  covenants  of  his  mortgage,  to  set 
it  up.  But  if  a  purchaser  from  the  mortgagor  who  has  simply 
bought  the  estate  subject  to  the  mortgage,  without  assuming  to 
pay  it,  acquires  such  prior  title,  an  intervening  mortgage  is  cut 
off,  as  much  as  it  would  be  if  the  purchase  had  been  made  by 
some  one  having  no  interest  in  the  estate.^  Even  if  the  purchaser 
at  the  foreclosure  sale  pays  no  money,  but  takes  a  deed  and  treats 
the  subsequent  mortgage  as  a  lien  and  continues  to  pay  interest 
on  it,  his  recognition  of  it  binds  only  himself  and  those  Vho  have 
notice.  If  he  afterwards  conveys  the  premises  by  warranty  deed 
for  a  valuable  consideration,  a  purchaser  without  notice  takes  the 
entire  title  free  from  the  lien  of  the  subsequent  mortgage.^ 

979.  A  verbal  agreement  to  release  a  mortgage,  to  be  sus- 

1  Harrison     v.   Phillips    Academy,    12         *  West  v.  Eeed,  55  111.  242. 

Mass.  456;  Rice  v.  Bird,  4  Pick.  (Mass.)  ^  McCammon  v.  Worrall,  11  PaJKC  (N. 
350,  note  ;  Green  v.  Butler,  26  Cal.  595.        Y,),  99  ;  and  see  Bullard  v.  Leach,  27  Vt. 

2  Porter  u.  Millet,  9  Mass.   101.      See     491.     See  §  748. 

§§  252-255.  6  Wood   v.  McClughan,   4   Thorap.  & 

8  Kenton   v.    Vandergrift,   42   Pa.   St.     C.  (N.  Y.)  420. 
339 ;  Sherwood  v.  Wilson,  2  Sweeny  (N. 
Y.),  684. 

72 


FORM   AND   CONSTRUCTION   OF  DISCHARGE.      [§§  980,  981. 

tained,  should  be  established  beyond  a  reasonable  doubt.  An 
owner  of  land  being  desirous  of  selling  it  went  with  the  purchaser 
to  the  mortgagee,  who  verbally  agreed  to  surrender  the  mortgage 
for  other  security,  and  told  the  purchaser  to  go  on  and  complete 
the  purchase,  as  he  had  made  an  arrangement  with  the  mortgagor 
in  relation  to  the  mortgage  debt.  The  purchase  having  been 
made,  the  mortgagee  failed  to  surrender  the  mortgage,  whereupon 
the  purchaser  sought  to  compel  him  to  cancel  it.  The  evidence 
being  contradictory,  and  not  showing  that  other  security  had  been 
given  or  offered,  relief  was  refused. ^ 

980.  A  release  of  a  mortgage  may  be  limited  in  its  oper- 
ation to  a  particular  person,  or  to  a  particular  demand,  so  as 
merely  to  give  priority  to  that  particular  person  or  demand  over 
the  mortgage,  and  leave  it  unaffected  as  to  others.  Thus  where 
a  mortgagee,  in  pursuance  of  a  stipulation  made  in  the  mortgage 
to  that  effect,  gave  a  release  in  favor  of  the  United  States  to 
enable  tlie  mortgagor  to  commence  the  distillery  business,  which 
stipulated,  "  that  the  lien  of  the  United  States  for  taxes  and 
penalties  should  have  priority  of  said  above  mentioned  mortgage, 
and  in  case  of  the  forfeiture  of  the  distillery  premises,  or  any 
part  thereof,  the  title  shall  vest  in  the  United  States,  discharged 
from  said  mortgage,  and  for  that  purpose  the  said  party  of  the 
first  part  does  hereby  remise  and  release  "  the  mortgaged  prem- 
ises, it  was  held,  as  against  a  party  claiming  title  under  a  junior 
incumbrance,  that  the  instrument  did  not  operate  as  a  general  re- 
lease of  the  premises  from  the  prior  mortgage,  but  that  its  only 
effect  was  to  give  the  government  a  priority  of  lien.^ 

981.  The  release  of  a  portion  of  the  mortgaged  premises, 
upon  the  payment  of  proper  consideration,  does  not  discharge 
or  affect  the  mortgage  lien  upon  other  portions  of  the  land,  al- 
though they  have  previously  been  sold  ;  ^  and  the  mortgagee  hav- 
ing no  notice  of  the  prior  conveyance  of  other  portions  of  the 
premises  may  release  to  a  subsequent  purchaser,  and  the  lion  of 
the  mortgage  upon  the  land  of  the  prior  purchaser  will  not  be 
affected,  although  he  received  no  payment  in  reduction  of  the 
mortgage  debt  for  the  release.*  If  the  release  be  made  to  a  third 
person,  the  mortgagor  can  claim  no  benefft  from   it,  even  as  a 

i  Stevenson  v.  Adams,  50  Mo.  475.  »  Evertson  v.  Ogden,  8  Paige  (N.  Y.), 

2  Flower  v.  Elwood,  66  111.  438.  275.     See  §§  722-729. 

4  Patty  V.  Pease,  8  Paige  (N.  Y.),  277. 

73 


§  982.]  PAYMENT   AND   DISCHARGE. 

discharge  of  that  part  of  the  hiiul.  The  release  in  such  case  merely 
transfers  the  interest  of  the  mortgagee  in  that  portion  of  the  mort- 
gaged premises  to  his  grantee.^ 

As  between  the  parties  to  the  mortgage,  and  without  reference 
to  intervening  rights,  the  mortgagee  may  release  any  portion  of 
the  mortgaged  property  without  impairing  his  lien  upon  the  re- 
mainder.^  There  is  no  obligation  on  his  part  to  first  exhaust  his 
remedy  on  the  other  realty  before  enforcing  his  claim  upon  a  por- 
tion of  the  mortgaged  premises  which  is  the  debtor's  homestead. 
He  may,  after  the  debtor  has  parted  with  all  the  balance  of  the 
mortgaged  estate  except  the  homestead,  release  such  other  realty 
and  still  maintain  his  lien  on  the  homestead.  Where  a  debtor 
after  mortgaging  his  homestead  and  other  land  was  thrown  into 
bankruptcy,  and  the  homestead  was  assigned  and  set  over  to  the 
debtor,  and  the  assignees  on  their  application  were  ordered  to  sell 
the  other  realty,  and  they  sold  one  piece  of  it  to  the  mortgagee  in 
part  paj^ment  of  the  mortgage,  and  he  released  other  parcels  ex- 
cept the  homestead  to  the  assignees,  it  was  held  that  these  trans- 
actions did  not  satisfy  and  cancel  the  whole  mortgage,  but  that 
the  mortgagee  might  enforce  it  for  the  balance  of  the  claim 
against  the  homestead.^ 

982.  The  effect  of  a  mortgagee's  making  a  partial  release 
when  he  has  actual  notice  of  a  subsequent  incumbrance  upon 
another  part  is  elsewhere  considered  ;^  but  it  should  be  stated  in 
this  connection,  that  a  release  so  made  discharges  pro  tanto  his 
own  claim  upon  the  property  as  against  any  third  person  inter- 
ested in  any  part  of  the  remainder  of  the  property.  But  it  is 
universally  held  that  the  mere  recording  of  a  subsequent  convey- 
ance or  incumbrance  is  not  notice  to  the  prior  mortgagee ;  he  is 
affected  only  by  actual  notice.^ 

1  Wyman  v.  Hooper,  2  Gray  (Mass.),  hausting  the  other  property  pledged  for  the 
141  ;  Grover  v.  Thatcher,  4  lb.  526.  payment  of  the  debt  in  the  same  written 

2  Coutant  V.  Servoss,  3  Barb.  (N.  Y.)  contract,  in  case  of  a  debt  for  the  payment 
128.  of  which  the  homestead  is  expressly  made 

8  Chapman  f.  Lester,  12  Kans.  592.  liable.      Code,  1873,  §§  1992,  1993  ;    and 

In  Iowa  it  is  provided  by  statute  that  see  Dickson  v.  Chorn,  6  Iowa,  19;    Two- 

the  homestead  shall  be  sold  only  to  sup-  good  v.  Stephens,  19  Iowa,  405. 

ply  the  deficiency  remaining  after  exhaust-  *  §§  722-729. 

ing  the  other  property  of  the  debtor  liable  ^  See  §§  562,  723  ;  also,  Birnie  v.  Main, 

to  execution,  in  case  of  a  debt  contracted  29   Ark.  591,   and   cases   cited;    Hoy  v. 

prior  to  the  purchase  of  the  homestead,  or  Bramhall,  19  N.  J.  Eq.  74,  563  ;    Johnson 

to  supply  the  deficiency  remaining  after  ex-  v.  Rice,  8  Me.  157;  Deuster  v-  McCamus, 

74 


FORM  AND   CONSTRUCTION   OF   DISCHARGE.  [§  983. 

Upon  the  same  principle,  after  the  mortgaged  premises  have 
passed  to  several  devisees,  if  the  mortgagee  releases  one  devisee's 
portion  the  others  are  liable  only  for  that  share  of  the  debt  for 
which  their  portion  would  be  liable  had  no  release  been  made.^ 
And  so  if  the  mortgagee  releases  the  mortgagor  from  personal 
responsibility  for  the  debt,  after  notice  of  his  conveyance  of  a 
part  of  the  premises  to  a  purchaser,  the  purchaser's  security  is 
thereby  diminished,  and  it  is  therefore  held  that  the  portion  he 
has  purchased  is  discharged  from  the  lien  of  the  mortgage.^ 

Owners  of  those  portions  of  the  mortgaged  estate  not  released 
cannot  claim  an  entire  release  of  their  own  property  from  the 
mortgage  lien,  because  of  a  partial  release  of  the  mortgaged  prop- 
erty ;  but  they  must  in  every  case  pay  their  fair  proportion  of  the 
mortgage  debt.  The  mortgage  security  at  most  is  affected  only 
to  the  extent  of  the  value  of  the  property  released.^ 

983.  The  personal  liability  of  the  mortgagor  may  be  re- 
leased without  extinguishing  the  mortgage,  if  this  be  done  with- 
out any  intention  of  discharging  the  debt.^  Such  a  release  of 
personal  liability  is  sometimes  made  when  the  mortgagor  has  sold 
the  premises  to  another  who  has  assumed  the  payment  of  the 
debt,  and  the  mortgagee  is  willing  to  look  to  the  latter  and  the 
property  for  the  satisfaction  of  his  claim.^  This  release  is  per- 
sonal merely,  and  does  not  discharge  the  debt  or  the  mortgage. 
Whether  the  intention  in  any  case  was  to  discharge  the  debt  or 
merely  tlie  personal  liability  is  a  question  of  fact,  depending  upon 
the  circumstances  of  the  case  or  the  construction  of  the  release.^ 
A  release  from  the  debt  without  limitation  is  generally  a  dis- 
charge of  the  mortgage,  because  the  debt  is  the  principal  thing, 
and  when  that  is  discharged  the  mortgage  is  discharged  along 
with  it.7 

14  Wis.  307  ;    Iglehart  v.  Crane,   42  111.  Stevens  v.  Cooper,  1  Johns.  (N.  Y.)  Ch. 

261;    Patty    v.  Pease,  8  Paige    (N.  Y.),  42.5;  Guion  v.  Knapp,  6  Paige  (N.   Y.), 

277;     Taylor    v.    Short,    27   Iowa,   .361;  35  ;  Williams  i>.  Wilson,  124  Mass.  257. 
Waters   v.  Waters,  20  Iowa,  363;  How-         *  Donnelly  u.  Simonton,  13  Minn.  301 ; 

ard  Ins.  Co.   v.  Halsey,  4  Sandf.  (N.  Y.)  and  see  Hayden  v.  Smith,  12  Met.  (Mass.) 

565;    8  N.  Y.   271;   Trustees   of  Union  511. 
College  V.  Wheeler,  61  N.  Y.  88.  6  Bentley  v.  Vanderheyden,   35  N.  Y. 

1  See  §§  722-728  ;    Gibson  v.   McCor-  677. 

mick,  10  Gill  &  J.  (Md.)  65.  6  Tripp  v.  Vincent,  3  Barb.  (N.  Y.)  Ch. 

2  Coyle  V.  Davis,  20  Wis.  564.  614. 

8  Frost  V.  Koon,  30  N.    V'.  428;    Stiiy-         ^  See  §  727;  Armitage  v.  Wickliffe,  12 
vesant  v.  Hall,  2  Barb.  (N.  Y.)  Ch.  151  ;     B.  Mon.  (Ky.)  488, 

75 


§  984.]  PAYMENT    AND   DISCHARGE. 

If  the  mortgage  note  be  given  up  by  the  mortgagee  to  be  can- 
celled without  a  release  of  the  mortgage,  and  the  mortgagor  re- 
leases the  land  to  him,  the  transaction  is  open  to  the  inquiry, 
whether  the  purpose  of  it  was  to  discharge  the  inortgage  or 
merely  to  release  the  mortgagor  from  personal  liability.^  If  the 
debt  was  not  in  fact  paid,  and  the  land  was  still  to  be  charged 
with  it,  the  mere  giving  up  of  the  note  would  not  discharge  the 
mortfjajje. 

The  surrender  of  the  mortgage  note  in  consideration  of  a  re- 
lease of  the  equity  of  redemption  does  not  necessarily  discharge 
the  mortgage  lien.  As  against  an  intermediate  incumbrance,  this 
ti-ansaction  would  be  held  to  operate  merely  as  a  relinquishment 
of  the  personal  obligation  of  the  mortgagor,  and  not  as  a  satisfac- 
tion of  the  mortgage,^  In  like  manner  where  a  mortgagee,  who 
has  acquired  the  equity  of  redemption  from  one  who  had  pur- 
chased it  from  the  mortgagor  and  assumed  the  payment  of  the 
mortgage,  releases  all  claims  and  demands  arising  by  virtue  of  that 
agreement,  neither  the  mortgage  debt  nor  lien  is  discharged.^ 

984.  Although  payment  of  the  debt  is  in  effect  a  discharge 
of  the  mortgage,  a  release  of  the  security  does  not  of  itself 
discharge  the  debt.*  A  deed  of  release  in  the  ordinary  form,  as 
well  as  an  entry  of  satisfaction  upon  the  margin  as  usually  made, 
contains  an  express  acknowledgment  of  the  payment  of  the  debt ; 
and  in  such  case  this  would  be  primd  facie  evidence  of  the  dis- 
charge of  the  debt,  and  perhaps  conclusive  evidence  of  it,  unless 
fraud  or  mistake  be  shown  in  making  such  entry  or  release.^  But 
this  is  otherwise  if  the  release  contains  no  such  recital ;  although 
if  the  purpose  be  to  release  the  security  without  releasing  the  debt 
this  should  be  distinctly  stated.  If  after  an  entry  of  satisfaction 
the  debtor  continues  to  pay  interest  upon  the  same  debt,  and  the 
creditor  continues  in  possession  of  the  mortgage  bond  or  note,  the 
presumption  of  payment  arising  from  such  entry  is  rebutted.^  If 
the  mortgage  note  be  left  outstanding,  and  there  is  no  evidence 

1  Hemenway  j;.  BasseU,  13  Gray  ^  Wade  v.  Howard,  11  Pick.  (Mass.) 
(Mass.),  380.  289,  297  ;  Chappell  v.  Allen,  38  Mo.  213  ; 

2  Baldwin  v.  Norton,  2  Conn.  161.  Fleming  v.  Parry,  24  Pa.  St.  47  ;  and  see 

3  Kuowles  V.  Carpenter,  8  K.  I.  548.  Cross  v.  Stahlman,  43  Pa.  St.  129. 
*  Van  Ueusen  y.  Frink,  15  Pick.  (Mass.)         t*  Fleming  w.  Parry,  S(<pra. 

449 ;  Sherwood   v.   Dunbar,   6    Cal.   53 ; 
Edgington  v.  Hefner,  81  111.  341. 
76 


FORM   AND   CONSTRUCTION   OF  DISCHARGE.       [§§  985-987. 

that  the  release  was  intended  to  operate  as  payment  of  the  note, 
the  mortgagee  may  still  collect  or  negotiate  the  note.^ 

985.  The  effect  of  a  release  or  discharge  of  a  mortgage 
upon  the  title  of  the  person  to  whom  the  release  is  made  is 
in  general  merely  to  extinguish  the  mortgage  lien,  and  to  leave 
his  title  just  as  if  the  mortgage  had  never  existed.  Sometimes,  in 
order  to  protect  the  person  who  has  paid  for  the  release,  it  is  nec- 
essary to  regard  the  mortgage  title  as  still  subsisting  in  him  ;  but 
this  is  exceptional  when  the  release  is  made  to  the  owner  of  the 
equity  of  redemption.  Where  a  mortgagor  and  mortgagee  had 
joined  in  making  a  second  mortgage  to  another  person,  who  after- 
wards entered  for  the  purpose  of  foreclosure,  and  after  the  lapse 
of  three  years  and  more  made  a  deed  of  release  to  them,  the  effect 
of  it  was  held  to  be  merely  to  replace  the  estate  in  them  as  they 
held  it  before  making  the  second  mortgage,  and  to  restore  them 
to  the  original  relation  of  mortgagor  and  mortgagee.^ 

986.  A  mortgagee  who  stands  by  at  a  sale  of  a  part  or  the 
whole  of  the  premises  by  the  mortgagor,  and  acquiesces  in  a 
sale  of  the  entire  title  to  the  property  without  making  known 
his  mortgages  and  receives  the  price,  cannot  set  up  his  mortgage 
against  the  purchaser;  as  to  him  the  mortgage  is  discharged.^ 
In  like  manner  if  he  permit  the  mortgagor  to  sell  the  mortgaged 
land,  under  the  promise  to  pay  him  from  another  fund,  the  pur- 
cliaser  takes  the  land  discharged  of  the  mortgage,  although  the 
mortgagee  obtains  nothing  from  such  fund.* 

987.  Release  wrongfully  obtained.  —  Where  a  release  was 
executed  and  sent  to  an  agent  to  be  delivered  upon  payment  of 
the  debt,  and  the  owner  of  the  propei'ty  procured  possession  of  it 
upon  a  promise  to  pay  the  sum  due  in  a  few  weeks,  which  he  neg- 
lected to  do,  it  was  held  that  the  release  was  inoperative,  and 
could  not  take  effect  until  payment  of  the  mortgage  debt.^ 

The  entry  of  satisfaction  of  the  mortgage  upon  the  record  will 
pi'otect  a  subsequent  bond  fide  purchaser  of  the  land  from  the 
mortgagor,  although  the  mortgagee  had  negotiated  the  mortgage 
note  to  a  third  person,  if  the  purchaser  had  no  notice  that  the  note 

1  VanDeusen  I'.  Frink,  ISPick.  (Mass.)  99;  Curtiss  v.  Tripp,  Clarke  (N.  Y.), 
449.  318. 

2  Bavlies  v.  Bussey,  5  Me.  153.  *  Taylor  v.  Cole,  4  Munf.  (Va.)  351. 

3  M'Cormick  v.  Digby,  8  Blackf.  (Ind.)         6  Hale  v.  Morgau,  68  111.  244. 

77 


§§  988,  989.]  PAYMENT   AND   DISCHARGE. 

was  not  paid,^  and  is  not  chargeable  with  notice  through  neglect 
to  require  the  surrender  of  it. 

A  forged  release  does  not,  of  course,  affect  the  mortgage  lien. 
It  is  not  necessar}'^  that  the  mortgagee  should  execute  and  record 
any  instrument  to  counteract  the  forgery,  though  it  would  be 
prudent  for  him  to  give  such  notice.  It  would  be  his  duty,  how- 
ever, to  inform  all  persons  who  might  apply  to  him  for  informa- 
tion that  the  release  is  a  forgery .^  Neither  is  it  necessary  that 
he  should,  within  any  particular  period,  commence  proceedings  at 
hnv  or  in  equity  against  the  forger,  or  any  one  claiming  under 
him,  to  vindicate  his  title.  He  may  rest  upon  the  strength  of  his 
title.3 

988.  The  debtor  who  demands  a  release  of  a  mortgage 
should  tender  the  instrument  to  be  executed  and  also  the  ex- 
penses of  its  execution  ;  *  and  if  satisfaction  be  entered  upon  the 
margin  of  the  record  he  should  offer  to  pay  the  expenses  of  this. 

11.  E7itry  of  Satisfaction  of  Record. 

989.  Provision  is  generally  made  for  the  discharge  of  a 
mortgage  when  paid,  either  by  a  brief  entry  upon  the  margin 
of  the  record  of  the  mortgage  signed  by  the  holder  of  it,  or  by  his 
executing  a  certificate  of  satisfaction,  which  is  recorded  at  length 
with  a  proper  reference  to  and  from  the  record  of  the  mortgage. 
An  abstract  of  the  statutory  provisions  for  the  dischai'ge  of  mort- 
gages is  here  given.  In  general,  it  may  be  said  that  the  entry  or 
certificate  provided  for  may  be  made  by  the  person  who  is  author- 
ized to  receive  payment  of  the  mortgage,  or  who  could  properly 
execute  a  deed  of  release  of  the  pi'emises. 

These  statutes  generally  provide  also  for  the  recovery  of  a  pen- 

* 

1  See  §  472 ;  Cornog  v.  Fuller,  30  Iowa,  and  afterwards  the  premises  were  pur- 
212;  Bank  of  Indiana  v.  Anderson,  14  chased  by  a  person  relying  upon  the  record 
Iowa,  544  ;  Ayers  y.  Hays,  60  Ind.  452.         that  tlie  mortgage  had  been  discharged, 

2  Chandler  v.  White,  84  111.  435.  held  that  the  assignee  could  not  enforce 
8  Chander  v.   White,  supra;   Meley  v.     his  mortgage,  because  he  had  not,  as  soon 

Collins,  41  Cal.  6fi3.     On  the  other  hand,  as  he  discovered  the  forgery,  taken  steps  to 

in  Costello  v.  Meade,  55  How.  Pr.  (N.  Y.),  correct  tiie  record  or  enforce  his  mortgage, 

the  Supreme  Court  of  New  York,  in  a  case  the  purchaser,  through  his  silence  and  in- 

where  a  forged  satisfaction  of  a  mortgage  activity  being  justified  in  dealing  with  the 

had  been  executed  and  filed  in   the  regis-  property  as  though  the  mortgage  had  been 

ter's  office,  and  the  mortgage  marked  sat-  properly  discharged, 
isfied  of  record,  and  the  mortgage  was  af-         *  See  Pettengill  v.  Mather,  16  Abb.  (N. 

terwards  assigned  to  a,bondJide  purchaser,  Y.)  Pr.  399. 

78 


ENTRY  OF  SATISFACTION  OF  RECORD.   [§§  990,  991. 

alty  from  the  person  who  has  refused  or  neglected  to  discharge  a 
mortgage  after  having  received  payment  of  it.  This  is  a  means 
of  compelling  a  discharge,  in  addition  to  the  relief  that  may  be 
had  under  the  general  jurisdiction  of  courts  of  equity. ^ 

990.  An  action  for  the  recovery  of  the  statutory  penalty 
for  neglecting  to  discharge  a  mortgage  is  a  penal  action,  and 
calls  for  a  strict  construction.^  The  action  should  be  brought 
against  the  person  who  has  the  power  legally  to  discharge  the 
mortgage,  whether  he  be  the  mortgagee  or  an  assignee  or  other 
holder  of  the  mortgage.^  It  is  erroneous  when  an  assignee  holds 
the  mortgage  to  join  with  him  in  the  action  the  mortgagee,  or 
any  one  else  who  could  not  execute  satisfaction  of  the  mortgage.* 
When  the  mortgage  is  in  the  form  of  a  trust  deed,  the  trustee, 
being  the  person  who  has  the  authority  to  enter  satisfaction,  is  the 
one  liable  for  neglect  or  refusal  to  do  so.  Where  an  assignee  of  a 
mortgage  has  negligently  omitted  to  provide  himself  with  author- 
ity to  satisfy  a  mortgage  of  record  on  payment  of  the  debt,  he  is 
liable  for  the  costs  of  a  suit  instituted  to  obtain  a  judicial  satis- 
faction of  it.^ 

As  a  mortgage  to  several  persons  who  are  partners  may  be  dis- 
charged by  any  one  of  them,  a  request  to  one  is  sufficient,  and  all 
the  members  are  jointly  liable  to  the  penalty  for  failure  of  one 
to  enter  satisfaction.^ 

After  the  penalty  for  neglecting  to  discharge  a  mortgage  of  rec- 
ord after  request  has  been  once  incurred,  a  subsequent  entry  of 
satisfaction,  even  if  entered  before  suit  is  brought  for  the  penalty, 
is  no  defence  ; '''  neither  is  it  any  defence  that  the  mortgagor  has 
subsequently  conveyed  the  land  to  the  mortgagee,  and  the  deed 
has  been  recorded.^ 

991.  The  holder  of  a  mortgage  renders  himself  liable  to 
the  statutory  penalty  for  refusing  to  release  a  mortgage  upon 
a  sufficient  tender,  althougli  he  claims  that  the  tender  is  insuffi- 
cient, and  it  so  appears  from  the  mortgage  note  by  a  strict  compu- 
tation, if  in  fact  it  be  sufficient ;  as,  for  instance,  where  the  holder 

1  Barnes  v.   Camack,  I    Barb.  (N.  Y.)         *  Galloway  v.  Litchfield,  8  Minn.  188. 
392;    Beach     v.     Cooke,  28   N.  Y.   508;         *  Hillman    v.    Stumph,   1    Wils.  (Ind.) 
Sutherland    v.  Rose,    47    Barb.    (N.  Y.)     285. 

144;  Beecher  v.  Ackerman,  1  Abb.  (N.  Y.)  c  Renfro  v.  Adams  (Ala.),  2  South.  L. 

N.  S.  Pr.  141.  J.  207. 

2  Stone  V.  Lannon,  6  Wis.  497.  ^  Ueeter  v.  Crosslcy,  20  Iowa,  180. 
8  Ewing  V.  Shelton,  34  Mo.  518.  8  Dceter  v.  Crossley,  supra. 

79 


§  991.]  PAYMENT   AND   DISCHARGE. 

of  the  mortgage  took  it  aftei-  its  maturity,  and  after  several  pay- 
ments had  been  made,  with  the  understanding  between  the  parties 
that  they  were  in  full  satisfaction  of  the  yearly  interest,  although 
by  reason  of  being  made  after  the  time  when  the  interest  was  due 
these  payments,  if  applied  at  large,  would  not  have  the  effect  of 
fully  satisfying  the  interest.^ 

The  statutory  penalty  for  refusing  to  discharge  a  mortgage  after 
a  proper  tender  and  request  applies  to  all  mortgages,  whether 
large  or  small ;  and  it  is  immaterial  that  the  amount  of  the  pen- 
alty is  more  than  the  amount  due  on  the  mortgage.^  It  is  im- 
material, too,  whether  the  mortgage  is  paid  voluntarily  or  is  en- 
forced by  suit.  The  penalty  may  just  as  well  be  enforced  when 
the  mortgage  is  paid  upon  a  judgment.^ 

But  it  has  been  held  that  in  an  action  for  not  entering  satis- 
faction on  a  mortgage  the  jury  may  and  should  consider  whether 
the  refusal  to  discharge  it  was  wanton  and  oppressive,  or  the  result 
of  an  honest  doubt.*  It  is  doubted  whether  this  broad  statement 
would  be  generally  sustained  under  the  statutes  now  in  force ;  but 
the  mortgagee  will  never  be  adjudged  liable  to  a  penalty  for  re- 
fusing to  discharge  a  mortgage  if  he  has  in  fact  any  substantial 
ground  for  so  refusing;  as,  for  instance,  when  he  can  justify  his 
refusal  on  the  ground  that  although  the  mortgage  debt  had  been 
paid,  the  costs  of  a  suit  brought  by  him  to  enforce  the  payment 
had  not  been  paid.^  Nor  will  the  statutory  penalty  be  imposed 
when  there  has  been  an  honest  difference  between  the  parties 
regarding  their  rights.^  But  a  mortgagee  incurs  the  penalty  if 
his  failure  to  enter  satisfaction  resulted  from  inadvertence  or  indif- 
ference, although  it  was  not  wilful  and  intentional.'^  No  recovery 
can  be  had  when  the  mortgage  has  not  actually  been  paid,  but 
the  mortgagee  has  united  the  legal  and  equitable  estates  in  him- 
self by  purchasing  the  equity  of  redemption.^ 

In  an  action  for  the  penalty  it  appeared  that  the  purchaser  of 
land  subject  to  a  mortgage  made  by  another,  after  paying  the 
mortgage  debt  requested  the  mortgagee  to  discharge  it  of  record. 

1  Barnard  v.  Harrison,  30  Mich.  8.  And  see  Lewis  v.  Conover,  21  N.  J,  Eq. 

2  Collar  V.  Harrison,  28  Mich.  518.  230. 

3  Verges  v.  Giboney,  47  Mo.  171.  See         ^  Burrows  ;;.  Bangs,  34  Mich.  304. 
Lewis  V.  Conover,  21  N.  J.  Eq.  230.  "!  Renfro  v.  Adams  (Ala.),  2  South.  L. 

*  Haubert  v.  Haworth,  9  Phila.  (Pa.)     J.  207. 
123.  **  Phelps  V.  Relfe,  20  Mo.  479. 

°  Emerson  v.  Oilman,  44  N.   H.  235. 

80 


PROVISIONS   FOR  ENTERING   DISCHARGE   OF   RECORD.       [§§  992,  992  a. 

The  latter  thereupon  gave  a  satisfaction  piece  to  the  mortgagor, 
but  it  was  never  recorded,  and  when  the  owner  of  the  land  again 
applied  to  him  to  execute  a  discharge,  he  said  nothing  of  his  hav- 
ing executed  such  an  instrument,  and  neglected  to  execute  an- 
other. The  jury  were  correctly  instructed  that  if  they  believed 
the  satisfaction  piece  was  given  to  the  mortgagor  to  be  kept  in  his 
pocket,  and  to  be  used  as  a  defence  to  an  action  for  the  penalty, 
and  not  to  be  recorded  as  a  discharge  of  the  mortgage,  it  was  a 
fraud  upon  the  owner,  and  no  defence  to  the  action  ;  and  more- 
over that  the  fraud  might  be  inferred  from  the  circumstances.^ 

Matters  of  excuse  or  justification  of  refusal  to  enter  satisfaction 
must  be  specially  pleaded  and  cannot  be  given  in  evidence  under 
a  general  denial,^ 

12.  Statutory  Provisions  for  Entering  Satisfaction  of  Record. 

992.  Alabama.^  —  A  mortgagee,  upon  receiving  satisfaction  of 
the  amount  secured  by  the  mortgage,  must,  if  it  has  been  re- 
corded, at  the  request  of  the  mortgagor,  enter  satisfaction  upon 
the  margin  of  the  record  of  it,  which  operates  as  a  release  of  the 
mortgage  and  a  bar  to  all  actions  upon  it.  A  penalty  of  two  hun- 
dred dollars  is  attached  to  the  neglect  of  a  mortgagee  to  do  this 
for  three  months  after  such  payment  and  request. 

992  a.  Arizona  Territory.*  —  Any  recorded  mortgage  may 
be  discharged  by  an  entry  in  the  margin  of  the  record  thereof, 
signed  by  the  mortgagee  or  his  personal  representative  or  assignee, 
acknowledging  the  satisfaction  of  the  mortgage,  in  the  presence 
of  the  recorder  or  his  deputy,  who  shall  subscribe  the  same  as  a 
witness,  and  such  entry  has  the  same  effect  as  a  deed  of  release 
duly  acknowledged  and  recorded.  Any  mortgage  may  also  be 
discharged  upon  the  record  thereof  by  the  recorder  in  whose  cus- 
tody it  may  be,  whenever  there  shall  be  presented  to  him  a  cer- 
tificate executed  by  the  mortgagee,  his  pei'sonal  representative  or 
assignee,  acknowledged,  or  proved  and  certified,  as  required  to 
entitle  conveyances  to  be  recorded,  specifying  that  such  mortgage 
has  been  paid,  or  otherwise  satisfied  and  discharged.  Every  such 
certificate,  and  the  proof  or  acknowledgment  thereof,  must  be 
recorded  at  full  length,  and  a  reference  made  io  the  book  contain- 
ing such  record,  in  the  minutes  of  the  discharge  of  such  mortgage, 

1  Eaton  V.  Copcland,  17  Wis.  218.  3  Code,  1876,  §§  2222,  2223. 

2  Petty  V.  Dill,  53  Ala.  641.  *  Compiled  Laws,  1877,  §§  281-284. 
VOL.  II.                     6  g;^ 


§§  993,  994.]  PAYMENT   AND   DISCHARGE. 

made  by  the  recorder  upon  the  record  thereof.  If  any  mortgagee, 
or  his  personal  representatives  or  assignee,  as  the  case  may  be,  after 
a  full  performance  of  the  conditions  of  the  mortgage,  whether 
before  or  after  a  breach  thereof,  shall,  for  the  space  of  seven  days 
after  being  thereto  requested,  and  after  tender  of  his  reasonable 
charges,  refuse  or  neglect  to  execute  and  acknowledge  a  certificate 
of  discharge  or  release  thereof,  he  is  liable  to  the  mortgagor,  his 
heirs  or  assigns,  in  the  sum  of  one  hundred  dollars,  and  also  for 
all  actual  damages  occasioned  by  such  neglect  or  refusal. 

993.  Arkansas.^  —  Upon  receiving  satisfaction  for  the  amount 
due  on  a  mortgage,  the  mortgagee  must  upon  request  acknowledge 
satisfaction  upon  the  margin  of  the  record  ;  and  if  he  does  not 
do  this  within  sixty  days  after  such  request,  he  forfeits  to  the 
party  aggrieved  any  sum  not  exceeding  the  amount  of  the  mort- 
gage money,  to  be  recovered  by  civil  action.  This  acknowledg- 
ment of  satisfaction  has  the  effect  to  release  the  mortgage  and 
revest  in  the  mortgagor,  or  his  representatives,  the  title  to  the 
mortgaged  property.  If  payment  be  made  to  the  officer  before 
sale,  he  is  required  to  make  and  acknowledge  and  record  a  certifi- 
cate thereof,  which  has  the  same  effect  as  satisfaction  entered  on 
the  margin  of  the  record. 

994.  Calif orma.2  —  A  recorded  mortgage  may  be  discharged 
by  an  entry  in  the  margin  of  the  record,  signed  by  the  mortgagee, 
or  his  personal  representative  or  assignee,  acknowledging  satisfac- 
tion in  the  presence  of  the  recorder,  who  must  certify  the  ac- 
knowledgment substantially  as  follows :  "  Signed  and  acknowl- 
edged before  me,  this  day  of  ,  in  the  year  .  A.  B., 
Recorder."  If  not  discharged  in  this  manner,  it  must  be  dis- 
charged upon  the  record  by  the  officer,  on  presentation  of  a  cer- 
tificate signed  by  the  mortgagee,  his  representative,  or  assign, 
acknowledged  or  proved,  stating  that  the  mortgage  has  been  paid 
or  discharged.  The  certificate  is  recorded  at  length  with  reference 
to  and  upon  the  record  of  the  mortgage.  The  mortgagee  must 
immediately  upon  request  enter  satisfaction,  or  make  a  discharge 
of  the  mortgage  in  such  form  as  to  entitle  it  to  be  recorded,  and 
upon  his  neglect  or  refusal  to  do  so  is  liable  for  all  damages  which 
the  mortgagor  or  his  grantee  may  sustain  by  reason  of  such  re- 

1  Dig.  of  Stat.  1874,  §§4290-4293,  p.         2  Civil  Code,  §§  2938-2941,  amended. 
771. 

82 


PROVISIONS   FOR   ENTERING   DISCHARGE    OF   RECORD.       [§§  995-997. 

fiisal,  and  also  forfeits  to  him  the  sum  of  one  hundred  dollars,  to 
be  recovered  in  a  civil  action, 

995.  Colorado. 1  —  When  the  mortgagee  of  any  property 
within  the  state  receives  payment  of  the  money  due  to  him,  and 
secured  by  mortgage,  and  enters  satisfaction  or  a  receipt  for  the 
same,  either  on  the  mortgage  or  on  the  record  of  the  mortgage, 
such  satisfaction  or  receipt  so  recorded  operates  to  release  the 
mortgage  to  the  person  entitled  to  a  release,  and  reconveys  the 
title  of  any  property  in  any  mortgage  as  fully  as  a  release  deed 
would  have  done,  executed  under  the  formalities  prescribed  by 
the  law  regulating  conveyances.  The  clerk  and  recorder  of  each 
county,  when  recording  a  mortgage,  is  required  to  leave  a  space  on 
the  margin  of  the  record  for  the  entry  of  satisfaction,  and  to  re- 
cord therein  the  satisfaction  made  on  said  mortgage,  or  to  permit 
the  mortgagee  to  enter  therein  the  satisfaction  of  the  mortgage, 
which  record  has  the  same  force  and  effect  as  the  record  of  a  re- 
lease deed  of  said  mortgagee. 

996.  Connecticut.-  —  Upon  the  satisfaction  of  a  mortgage  the 
mortgagee,  or  person  by  law  authorized  to  release  the  same,  must 
execute  and  deliver  a  deed  of  release  ;  and  if  he  neglect  so  to  do 
for  thirty  days  after  a  written  request,  and  the  tender  of  the  nec- 
essary expense,  he  is  liable  to  pay  to  any  person  aggrieved  five 
dollars  for  each  week  of  such  neglect  after  thirty  days.  The  ex- 
ecutor or  administrator  of  any  deceased  mortgagee,  and  any  guar- 
dian or  conservator  of  a  mortgagee,  may  release  the  legal  title  to 
the  mortgagor  or  party  entitled  to  the  release. 

997.  Dakota  Territory.^  —  A  recorded  mortgage  may  be  dis- 
charged in  the  margin  of  the  record  by  the  mortgagee,  his  per- 
sonal representative  or  assignee,  in  the  presence  of  the  register,  or 
by  the  register,  on  presentation  to  him  of  a  certificate  signed  by 
the  mortgagee  or  such  other  person,  acknowledged,  or  proved  and 
certified,  stating  that  the  mortgage  has  been  satisfied.  This  cer- 
tificate is  i-ecorded  at  length,  and  a  reference  made  in  the  record 
to  the  book  and  page  where  the  mortgage  is  recorded,  and  in  the 
minute  of  the  discharge  made  upon  the  record  of  the  mortgage, 
to  the  book  and  page  where  the  discharge  is  recorded.  By  failure 
so  to  discharge  on  request,  a  penalty  of  one  hundred  dollars  is  in- 
curred, and  also  all  damages  which  may  result. 

1  Gen.  Laws,  1877,  §§  1847,  1849.  8  Civil  Code,  1877,  §  1735. 

2  Gen.  Stat.  1875,  p.  355,  §§  21,  22. 

83 


§§  998-1002.]  PAYMENT   AND   DISCHARGE. 

998.  Delaware.^  —  When  a  mortgage  debt  is  satisfied  the  legal 
holder  of  the  mortgage  must  within  sixty  days  afterwards  cause 
an  entry  of  satisfaction  to' be  made  upon  the  record,  signed  by 
him,  or  when  a  corporation  is  the  holder,  by  the  cashier  or  treas- 
urer, and  attested  by  the  recorder.  Such  entry  extinguishes  the 
mortgage.  A  neglect  or  refusal  on  the  part  of  the  holder  of  the 
mortgage  so  to  discharge  it  renders  him  liable  in  damages  of  not 
less  than  ten,  nor  more  than  five  hundred  dollars,  except  when 
special  damage  to  a  larger  amount  is  alleged  and  proved,  to  be 
recovered  by  action.  Upon  request  a  reconveyance  of  the  prem- 
ises embraced  in  such  mortgage,  or  in  a  conveyance  in  the  nature 
of  a  mortgage,  must  be  executed. 

999.  District  of  Columbia.  —  Deeds  of  trust  are  taken  as  se- 
curity for  debts  almost  to  the  exclusion  of  mortgages.  Release  is 
made  by  a  deed  from  the  trustee.  There  is  no  statutory  provision 
for  cancellation  upon  the  record, 

1000.  Florida.^ —  Whenever  the  amount  of  money  due  on  any 
mortgage  shall  be  fully  paid  to  the  person  or  party  entitled  to  the 
payment  thereof,  the  mortgagee,  or  party  to  whom  such  payment 
shall  have  been  made,  shall,  within  sixty  days  thereafter,  enter  on 
the  margin  of  the  record  of  said  mortgage,  in  the  presence  of  the 
custodian  of  said  record,  to  be  attested  by  said  custodian,  satisfac- 
tion of  said  mortgage,  and  sign  the  same  with  his,  her,  or  their 
hand,  or  shall  make  and  execute  in  writing  an  instrument  ac- 
knowledging satisfaction  of  said  satisfied  mortgage,  and  have  the 
same  entered  of  record  in  the  book  of  mortgage  records  in  the 
proper  county,  the  said  instrument  to  be  first  legally  acknowledged 
or  proven  to  be  the  act  and  instrument  of  the  party  or  parties 
making  the  same. 

1001.  Georgia.  —  It  is  customary  to  discharge  recorded  mort- 
gages by  a  written  certificate  entered  upon  the  record  by  the  clerk. 
A  deed  of  release  may  also  be  used. 

1002.  Idaho  Territory.^  —  Mortgages  may  be  discharged  by  an 
entry  on  the  margin  of  the  record,  signed  by  the  mortgagee,  or 
his  personal  representative  or  assignee,  acknowledging  satisfac- 
tion of  the  mortgage,  in  the  presence  of  the  recorder  or  his  dep- 
uty, who  must  subscribe  the  same  as  a  witness  ;  and  such  entry 
has  the  same  effect  as  a  deed  of  release  duly  acknowledged  and 

1  Rev.  Code,  1874,  p.  50G.  »  Rev.  Laws,  1875,  p.  603. 

2  Laws,  1877,  c.  3013. 

84 


PROVISIONS   FOR   ENTERING   DISCHARGE   OF   RECORD.      [§§  1003-1006. 

recorded.  A  discharge  may  also  be  made  upon  the  record  by  the 
recorder,  whenever  there  sliall  be  presented  to  him  a  certificate 
executed  by  the  mortgagee,  his  personal  representative  or  assignee, 
duly  acknowledged  or  proved,  specifying  that  such  mortgage  has 
been  paid  or  otherwise  satisfied  or  discharged.  The  certificate  is 
recorded  at  length,  with  a  minute  of  reference  to  the  record  of 
the  mortgage.  A  neglect  or  refusal  of  the  holder  of  a  satisfied 
mortgage  for  seven  days  after  request  to  execute  and  acknowledge 
a  certificate  of  dischai-ge  renders  him  liable  to  the  mortgagor,  his 
heirs  or  assigns,  in  the  sum  of  one  hundred  dollai's,  and  also  for 
all  actual  damages  occasioned  by  such  neglect  or  refusal. 

1003.  Illinois.^ — Upon  satisfaction  of  a  mortgage  the  mort- 
gagee shall,  at  the  request  of  the  mortgagor  or  his  assigns,  enter 
satisfaction  upon  the  margin  of  the  record  in  the  recorder's  office. 
A  mortgage  or  trust  deed  may  also  be  released  by  an  instrument 
in  writing,  acknowledged  or  proved  in  the  same  manner  as  a  deed. 
If  release  is  not  made  within  one  month  after  payment  of  the 
debt  and  tender  of  all  reasonable  charges,  and  a  request  for  re- 
lease, the  person  whose  duty  it  is  to  make  the  release  shall  forfeit 
and  pay  to  the  party  aggrieved  the  sum  of  fifty  dollars,  to  be  re- 
covered in  an  action  of  debt. 

1004.  Indiana.^  —  The  mortgagee,  upon  receiving  full  payment 
of  the  mortgage  debt,  shall,  upon  request,  enter  satisfaction  on 
the  margin,  or  other  proper  place  in  the  record  of  the  mortgage, 
which  operates  as  a  complete  release  and  discharge  of  it.  Instead 
of  such  entry  a  certificate  of  payment  may  be  made,  acknowl- 
edged and  recorded,  with  proper  references  to  the  record  of  the 
mortgage.  The  executor  or  administrator  of  a  deceased  mort- 
gagee may  release  and  discharge  the  mortgage.^ 

1005.  Iowa.*  —  When  the  amount  due  on  a  mortgage  is  paid, 
the  mortgagee  must  acknowledge  satisfaction  in  the  margin  of  the 
record  of  the  mortgage,  or  must  execute  an  instrument  in  writing 
referring  to  the  mortgage,  and  duly  acknowledge  it  for  record.  If 
he  fails  to  do  so  within  sixty  days  after  being  requested  he  forfeits 
the  sum  of  twenty-five  dollars  to  the  mortgagor. 

1006.  Kansas.^  —  A  recorded  mortgage  may  be  discharged  by 

1  R.  S.  1877,  c.  95,  §§  8,  9,  10.  3  Jb.  507,  §  39. 

2  Revision,  1876,  vol.  2,  p.  334,  §§  5,  6.         *  Code,  1873,  §  3327. 

A  tender  merely  of  the  amount  due  does         ^  D.assler's  Stat.  1876,  c.  68,  §§  5-8. 
not  entitle  the  mortgaj^or  to  a  discharge. 
Storey  j;.  Krewson,  55  Ind.  397. 

85 


§§  1007,  1008.]  PAYMENT   AND   DISCHARGE. 

an  entry  on  tlio  margin  of  the  record,  signed  by  the  mortgagee,  or 
his  attorney,  assignee,  or  personal  representative,  acknowledging 
satisfaction  of  the  mortgage,  in  the  presence  of  the  register  of 
deeds  or  his  deputy,  and  subscribed  by  him  as  a  witness.  A 
mortgage  may  also  be  released  by  a  receipt  indorsed  thereon, 
by  the  mortgagee,  his  agent  or  attorney,  which  receipt,  when  re- 
corded on  the  margin  of  the  record,  has  the  same  force  and  effect 
as  an  entry  on  the  margin  of  the  record.  A  mortgage  may  also 
be  discharged  npon  the  record  by  the  register  of  deeds,  whenever 
there  is  presented  to  him  an  instrument  acknowledging  satisfac- 
tion of  the  mortgage,  executed  by  the  mortgagee,  his  duly  author- 
ized attorney  in  fact,  assignee,  or  personal  representative,  and 
duly  acknowledged  and  certified,  as  other  instruments  affecting 
real  estate.  Such  instrument  is  recorded  at  length,  with  refer- 
ence to  it  in  the  record  of  the  mortgage.  Upon  the  satisfaction 
of  a  mortgage,  it  is  the  duty  of  the  mortgagee  or  his  assignee, 
immediately  on  demand,  to  enter  satisfaction  of  record  ;  and  if  he 
neglects  to  do  so  he  is  liable  in  damages  to  the  mortgagor  or  his 
grantee  in  the  sum  of  one  hundred  dollars,  to  be  recovered  in  a 
civil  action. 

1007.  Kentucky.  —  Liens  by  deed  or  moi-tgage  may  be  dis- 
charged by  an  entry  acknowledging  satisfaction  of  the  same  on 
the  margin  of  the  record,  signed  by  the  person  entitled  or  his 
personal  representative,  and  attested  by  the  clerk  or  his  deputj'-, 
which  shall  have  the  effect  to  reinvest  the  title  in  the  mortgagor, 
or  grantor,  or  person  entitled  to  it.  There  may  also  be  a  common 
law  release. 

1008.  Louisiana.^  —  Mortgages  are  discharged  by  the  fact  of 
payment.  The  erasure  of  record  is  made  on  presentation  to  the 
recorder  of  the  acts,  receipts,  and  judgments  which  operate  as  a 
release  of  the  mortgage,  with  the  certificate  of  the  notary  public 
before  whom  the  act  was  executed,  stating  by  such  act  a  release 
was  granted  and  the  erasure  allowed  ;  this  certificate  is  filed  in 
the  office  of  the  recorder  of  mortgages,  where  such  cancelling  is 

1  Rev.  Civil  Code,  lft70,  art.  3371-3385.  entation  of  a  false  certificate  that  the  note 

The  erasure  can    only   be    made   by  the  had  been  paid,  impair  the  rights  of  the 

mortgagee's  consent  or  by  decree.     By  no  mortgagee,  although   one  has  innocently 

act  of  the  recorder  can  the  mortgage  be  bought  the  property  on  the  faith   of  a  cer- 

destroyed.     Guesnard    v.    Soulie,    8    La.  tificate  that  there  was  no  mortgage  on  the 

Ann.  58.     Neither  does  the  cancellation  of  property.     De  St.  Romes  v.  Blanc,  20  La. 

the  mortgage  by  the  recorder,  on  the  pres-  Ann.  424. 

86 


PROVISIONS   FOR   ENTERING  DISCHARGE   OF   RECORD.      [§§  1009-1011. 

asked  for.  If  the  erasure  has  been  given  by  an  act  under  private 
signature,  the  erasure  only  takes  place  when  it  has  been  acknowl- 
edged by  the  mortgagee,  or  proved  by  the  oath  of  one  of  the 
subscribing  witnesses,  unless  the  register  be  acquainted  with  the 
signature  of  the  party  who  has  subscribed  the  act,  and  shall  agree 
on  his  own  responsibility  to  make  the  erasure  on  the  presentation 
of  the  original.  If  the  debt  be  payable  by  instalments,  the 
debtor  may,  on  the  payment  of  each  instalment,  require  a  release 
from  the  creditor  in  relation  to  the  instalment  paid  ;  and  the  re- 
corder shall  make  mention  of  these  partial  releases  on  the  margin 
of  the  record  ;  but  he  shall  not  erase  the  record  entirely  until  the 
whole  debt  has  been  discharged.^ 

1009.  Maine.2  —  A  mortgage  may  be  discharged  by  a  deed  of 
release  from  the  person  authoi-ized  to  discharge  it,  or  by  causing 
satisfaction  and  payment  under  his  hand  to  be  entered  in  the 
margin  of  the  record  of  such  mortgage  in  the  register's  office.  A 
guardian  of  a  mortgagee  may  execute  a  dischai'ge. 

1010.  Maryland.^ — A  release  of  a  mortgage  may  be  made  in 
the  following  form,  or  to  like  effect :  "  I  hereby  release  the  above 
(or  within)  mortgage.  Witness  my  hand  and  seal  this  day 
of  .  (Seal.)"  This  may  be  written  by  the  mortgagee  or 
his  assignee  upon  the  record  in  the  office  where  the  mortgage  is 
recorded,  and  attested  by  the  clei'k  of  the  court ;  or  it  may  be 
indorsed  on  the  original  mortgage  by  the  mortgagee  or  his  as- 
signee ;  and  upon  such  mortgage,  with  the  release,  being  filed  in 
the  office  in  which  the  mortgage  is  recorded,  the  clerk  is  required 
to  record  the  release  at  the  foot  of  the  raortsfasre.  When  the 
mortgage,  with  the  release,  is  filed  for  this  purpose,  the  clerk  re- 
tains it  in  his  office,  and  does  not  permit  it  to  be  again  with- 
drawn. A  release  may  be  made  by  an  executor  or  assignee  in  the 
same  manner  and  with  like  effect  as  by  the  mortgagee. 

1011.  Massachusetts.*  —  Mortgages  may  be  discharged  by  an 
entry  on  the  margin  of  the  record  in  the  registry  of  deeds,  signed 
by  the  mortgagee,  or  his  executor,  administrator,  or  assignee,  ac- 
knowledging the  satisfaction  of  the  mortgage ;  and  such  entry  has 

1  An  unauthorized  cancellation  by  the  evidence.    Ilorton  v.  Cutler,  28  La.  Ann. 

recorder  cannot  impair  the  rights  of  the  331.  * 

holder  of  the  mortgage.   Mechanics' Build-         2  r_  g.  ig;]^  c.  90,  §§  25,  26. 
ing  Asso.  V.  Ferguson  29  La.  Ann.  . '548.         8  Code,  1860,  art.  24,  §§  33-38. 
The   holder  of  the  mortgage  may  show         *  G.  S.  c.  89,  §§  30,  31. 
that  the  recorder  acted  upon  insufficient 

87 


§  1012.]  PAYMENT    AND   DISCHARGE. 

the  same  effect  sis  a  deed  of  release  duly  acknowledged  and  re- 
corded. When  there  are  two  or  more  joint  holders  of  a  mort_ 
gage,  one  of  them  may  discharge  it  in  either  of  these  modes.^ 
When  the  mortgagee  or  the  holder  of  the  mortgage  is  under 
guardianship,  as  an  infant  or  otherwise,  the  guardian  may,  upon 
satisfaction  of  the  debt,  execute  a  release  of  the  mortgage.^  If 
the  holder  of  a  mortgage,  after  full  performance  of  the  condition, 
whether  before  or  after  breach,  for  seven  days  after  being  re- 
quested, and  after  a  tender  of  his  reasonable  charges,  refuses  or 
neglects  to  make  such  discharge,  or  execute  and  acknowledge  a 
deed  of  release,  he  is  liable  for  all  damages  occasioned  by  such 
neglect  or  refusal,  to  be  recovered  in  an  action  of  tort.^ 

1012.  Michigan.*  —  A  mortgage  may  be  discharged  by  an  en- 
try on  the  margin  of  the  record,  signed  by  the  mortgagee  or  his 
personal  representative  or  assignee,  acknowledging  satisfaction,  in 
the  presence  of  the  register  or  his  deputy,  as  a  witness,  and  such 
entry  has  the  effect  of  a  deed  of  release.  It  may  also  be  dis- 
charged upon  the  record  by  the  register  of  deeds,  when  a  certifi- 
cate of  payment,  duly  executed  and  acknowledged,  is  presented  ; 
or  upon  the  presentation  of  the  certificate  of  the  circuit  court  of 
the  county,  under  its  seal,  that  it  has  been  made  to  appear  that 
the  mortgage  has  been  duly  paid,  or  upon  presentation  of  a  cer- 
tificate of  the  register  in  chancery  of  the  county,  certifying  that 
a  decree  of  foreclosure  has  been  entered,  and  that  the  records  of 
his  office  show  that  the  decree  has  been  satisfied.^  A  neglect  or 
refusal  for  seven  days,  after  payment  and  request  and  tender  of 
reasonable  charges,  to  discharge  the  mortgage,  renders  the  person 
so  neglecting  or  refusing  liable  to  the  mortgagor,  his  heirs  or  as- 
signs, in  the  sum  of  one  hundred  dollars  damages,  besides  all 
actual  damages,  to  be  recovered  in  an  action  upon  the  case,  or 
upon  a  bill  in  equity  to  procure  a  discharge,  with  double  costs.^ 
Any  person  whose  lands  are  incumbered  by  a  mortgage  that  has 
been  satisfied  may  petition  the  circuit  court  for  the  county,  stating 
the  facts  and  alleging  that  the  residence  of  the  holder  of  the  mort- 
gage cannot  be  ascertained,  or  that  he  is  deceased,  and  three 
months  and  more  having  elapsed,  the  names  of  his  representatives 

1  St.  1870,  c.  171.  5  Laws,  1875,  No.  47,  p.  40. 

2  G.  S.  c.  140,  §  .34.  ®  The  penalty  may  be  recovered  in  an 
8  G.  S.  c.  89,  §  31.  action  to  redeem.  Cowles  v.  Marble,  37 
*  Compiled  Law.s,  1871,  pp.  1348,  1349.     Mich.  158. 


PROVISIONS   FOR   ENTERING   DISCHARGE   OF   RECORD.       [§§  1013,  1014. 

cannot  be  ascertained  ;  and  upon  satisfactoi-y  proofs  the  court 
makes  and  delivers  to  the  petitioner  an  attested  certificate  of  the 
fact  of  payment  and  of  the  evidence  establishing  it.^ 

1013.  Minnesota,^ —  Mortgages  may  be  discharged  by  an  entry 
in  the  margin  of  the  record,  signed  by  the  mortgagee,  or  his  ex- 
ecutor, administrator,  or  assignee,  acknowledging  satisfaction  ; 
and  such  entry  has  the  same  effect  as  a  deed  of  release  duly  ac- 
knowleged  and  recorded.  They  may  also  be  discharged  upon  the 
record  by  the  register  of  deeds  whenever  there  shall  be  presented 
to  him  a  certificate  signed  by  the  mortgagee  or  grantee,  his  per- 
sonal representatives  or  assigns,  duly  executed  and  acknowledged, 
specifying  that  the  mortgage  has  been  paid  or  otherwise  dis- 
charged. This  certificate  is  recorded  at  length  with  a  minute  of 
reference  to  and  from  the  record  of  the  mortgage. 

If  the  holder  of  the  mortgage  neglects  for  the  space  of  ten  days 
after  being  thereto  requested,  with  tender  of  his  reasonable  charges 
to  discharge  the  same,  he  is  liable  for  all  actual  damages  occa- 
sioned by  his  neglect  or  refusal,  to  be  recovered  in  a  civil  action. 
In  the  same  action  may  be  united  a  claim  for  the  satisfaction  of 
the  mortgage,  which  the  court  may  decree,  and  a  certified  copy 
of  the  decree  operates  as  a  discharge.  If  the  mortgagee  be  a 
non-resident,  the  action  may  be  maintained  at  the  expiration  of 
sixty  days  after  the  conditions  of  the  mortgage  have  been  fully 
performed,  without  any  previous  request  to  satisfy  the  mortgage. 

1014.  Mississippi.^  —  A  mortgagee  or  cestui  que  trusty  or  his 
assignee  or  successor,  having  received  full  payment  of  the  money 
due  by  the  mortgage  or  deed  of  trust,  shall,  at  the  request  of 
the  mortgagor  or  grantor,  enter  satisfaction  upon  the  margin  of 
the  record  of  such  mortgage  or  deed  of  trust,  in  the  clerk's  office, 
which  entry  discharges  the  same  and  revests  the  title  in  the 
grantor.^  The  trustee  in  any  deed  of  trust  is  empowered  and  re- 
quired, upon  satisfactory  proof  being  made  to  him  that  his  cestvi 
que  truat  has  received  full  payment  of  the  money  secured  by  such 
deed,  to  enter  satisfaction  in  like  manner.  Discharge  may  also 
be  made  by  a  deed  of  release,  or  an  attorney  may  be  appointed 
to  enter  satisfaction  upon  the  margin  of  the  record.  A  neglect 
to  enter,  discharge,  or  make  release  for  three  .months  after  request 

1  Acts,  1877,  p.  9.  8  i^ev.  Code,  1871,  p.  501. 

2  Revision,  1866,  p.  332;  1  Stat,  at  Large,         *  Laws,  1876,  p.  262. 
1873,  p.  642  ;  and  see  Laws.  1876,  c.  38. 

89 


§§  1015,  1016.]  PAYMENT   AND  DISCHARGE. 

and  tender  made  of  reasonable  expenses,  makes  the  person  so 
neglecting  or  refusing  liable  to  forfeit  to  the  party  aggrieved  any 
sum  not  exceeding  the  mortgage  money,  to  be  recovered  by  ac- 
tion.i 

1015.  Missouri.2  —  A  mortgagee,  trustee,  or  cestui  que  trusty 
his  executor,  administrator,  or  assignee,  upon  receiving  full  sat- 
isfaction of  any  mortgage  or  deed  of  trust,  shall,  at  the  request 
and  cost  of  the  person  making  the  same,  acknowledge  satisfaction 
on  the  margin  of  the  record,  or  deliver  to  such  person  a  sufficient 
deed  of  release  of  the  mortgage  or  deed  of  trust.  A  trustee  ac- 
knowledging satisfaction,  or  making  a  deed  of  release,  must  be 
joined  b}'  the  cestui  que  trust.  Neglect  for  thirty  days  after  re- 
quest and  tender  of  cost  renders  the  delinquent  liable  to  forfeit 
to  the  person  aggrieved  ten  per  cent,  of  the  amount  of  the  mort- 
gage or  deed  of  trust,  absolutely,  and  any  other  damages  he  may 
be  able  to  prove  he*  has  sustained,  to  be  recovered  by  action. 
Any  attorney  in  fact  to  whom  the  money  due  has  been  paid  has 
power  to  execute  the  release.^  Such  acknowledgment  or  release 
has  the  effect  to  discharge  the  mortgage  or  reinvest  in  the  mort- 
gagor or  his  legal  representative  the  title  to  the  property. 

1016.  Montana  Territory.'*  —  A  mortgage  may  be  discharged 
by  an  entry  in  the  margin  of  the  record,  signed  by  the  mortgagee, 
or  his  personal  representative  or  assignee,  acknowledging  satis- 
faction of  the  mortgage  in  the  presence  of  the  recorder  or  his  dep- 
uty, who  must  subscribe  as  a  witness.  Such  entry  has  the  same 
effect  as  a  deed  of  release  duly  acknowledged  and  recorded.  It 
may  also  be  discharged  upon  the  record  by  the  recorder  when- 
ever there  shall  be  presented  to  him  a  certificate  executed  by  the 
mortgagee,  his  personal  rejiresentative  or  assignee,  acknowledged 
or  proved,  specifying  that  such  mortgage  has  been  paid  or  other- 
wise satisfied.  The  certificate  is  recorded  at  length,  with  a  note 
of  reference  to  the  record  of  the  mortgage.  If  the  holder  of  the 
mortgage,  having  received  payment,  refuses  or  neglects  for  the 
space  of  seven  days  after  request  to  execute  and  acknowledge  a 
certificate  of  discharge,  he  is  liable  to  the  mortgagor,  his  heirs  or 

1  Rev.  Code,  1871,  p.  501.  need  be  under   seal.     Valle'  v.   Am.  Iron 

«  "Wagner's  Stat.  1872,  c.  99,  §§  14-18.  Mountain  Co.  27  Mo.  4.5.5. 

8  Neither  the  authority  of  the  attorney  *  Codified  Stat.  1872,  p.  402. 
nor  his  acknowledgment    of   satisfaction 

90 


PROVISIONS  FOR  ENTERING   DISCHARGE   OF  RECORD.       [§§  1017-1019. 

assigns,  in  the  sum  of  one  hundred  dollars,  and  also  for  all  actual 
damages  occasioned  by  such  neglect  or  refusal. 

1017.  Nebraska.^  —  A  mortgage  may  be  discharged  by  an  en- 
try in  the  margin  of  the  record  signed  by  the  mortgagee,  or  his 
personal  representative  or  assignee,  acknowledging  satisfaction  of 
the  mortgage,  in  the  presence  of  the  county  clerk  or  his  deputy, 
who  must  subscribe  as  a  witness.  Such  entry  then  has  the  same 
effect  as  a  deed  of  release  duly  acknowledged  and  recorded.  It 
may  also  be  discharged  upon  the  record  by  the  county  clerk,  in 
whose  custody  it  may  be,  whenever  there  shall  be  presented  to 
him  a  certificate  executed  by  the  mortgagee,  his  personal  repre- 
sentatives or  assigns,  duly  acknowledged  or  proved,  specifying 
that  the  mortgage  has  been  paid  or  otherwise  satisfied.  Such 
certificate  is  recorded  with  a  reference  to  the  record  of  the  mort- 
gage. In  case  of  a  neglect  or  refusal  for  the  space  of  seven  days 
after  request  and  tender  of  reasonable  charges  to  make  such  dis- 
charge, the  person  whose  duty  it  is  to  make  such  discharge  is 
liable  to  the  mortgagor,  his  heirs  or  assigns,  in  the  sum  of  one 
hundred  dollars,  in  addition  to  all  actual  damages  occasioned  by 
such  neglect  or  refusal,  to  be  recovered  by  action. 

1018.  Nevada.2  —  ^  mortgage  may  be  discharged  by  an  entry 
on  the  margin  of  the  record,  signed  b}'-  the  mortgagee,  or  his  per- 
sonal representative  or  assignee,  acknowledging  satisfaction,  in 
the  presence  of  the  recorder  or  his  deputy,  who  must  subscribe  as 
a  witness,  and  such  entry  has  the  same  effect  as  a  deed  of  release. 
It  may  also  be  discharged  upon  the  record  by  the  recorder  on 
presentation  of  a  certificate  of  payment  duly  acknowledged  and 
certified.  Such  certificate  is  recorded  at  length  with  proper  ref- 
erences. A  neglect  or  refusal  for  seven  days  after  request  and  a 
tender  of  reasonable  charges  to  execute  a  release  renders  the  per- 
son whose  duty  it  is  to  do  this  liable  to  the  mortgagor,  his  heirs 
or  assigns,  in  the  sum  of  one  hundred  dollars,  and  also  for  all 
actual  damages  occasioned  by  such  neglect  or  refusal. 

1019.  New  Hampshire.^  —  Upon  the  performance  of  the  con- 
dition of  the  mortgage  or  upon  the  tender  of  such  performance, 
the  mortgage  is  void.  If,  after  such  performance  or  tender,  the 
mortgagee,  upon  being  requested,  and  having  his  reasonable 
charges  tendered  to  him,  refuses  or  neglects  to  execute  a  release 

1  G.  S.  1873,  c.  61,  §§  26-29.  8  Q    S.  1867,  C.  122,  §§  4,  5,  6 ;  G.  L. 

2  1  Compiled  Laws,  1873,  §§  263-266.        1878,  c.  136,  §§  4-7. 

91 


§§  1020-1022.]  PAYMENT    AND   DISCHARGE. 

of  his  interest  in  the  mortgaged  premises,  the  mortgagor  or  per- 
son having  his  estate  may  apply  by  petition  to  the  supreme  court 
in  the  county  where  the  premises  lie,  for  a  decree  of  discharge.  If 
the  court  finds  that  the  condition  has  been  performed  or  tendered, 
a  decree  is  entered  that  the  mortgage  be  discharged.  A  copy  of 
the  decree  is  then  recorded,  and  has  the  same  effect  as  a  release 
duly  executed. 

1020.  New  Jersey.^  —  When  a  mortgage  is  paid  it  is  the 
duty  of  the  clerk  of  the  court  of  common  pleas  of  the  county  in 
which  the  mortgage  is  recorded,  on  application  to  him  by  the 
mortgagor  or  person  redeeming  or  paying  the  mortgage,  and  pro- 
ducing to  him  the  mortgage  cancelled,  or  a  receipt  upon  it  signed 
by  the  mortgagee,  his  representatives  or  assigns,  to  enter  in  a 
margin,  to  be  left  for  that  purpose  opposite  to  the  abstract  or 
record,  a  minute  of  the  redemption  or  payment ;  which  minute  is 
a  full  and  absolute  bar  to  and  discharge  of  the  entry  and  mort- 
gage. 

1021.  New  Mexico  Territory.  —  There  are  no  statutory  pro- 
visions relating  to  the  discharge  of  mortgages  ;  therefore  a  deed 
of  release  should  be  used. 

1022.  New  York.2  — Any  mortgage  that  has  been  recorded 
may  be  discharged  upon  the  record  by  the  officer  in  whose  cus- 
tody it  may  be  whenever  there  shall  be  presented  to  him  a  certif- 
icate signed  by  the  mortgagee,  his  personal  representatives,  or  as- 
signs, duly  acknowledged  or  proved,  specifying  that  the  mortgage 
has  been  paid,  or  otherwise  satisfied  and  discharged.  Such  certif- 
icate is  recorded  at  length,  and  a  reference  made  to  the  book  and 
page  of  such  record  in  the  minute  of  the  discharge  of  the  mort- 
gage made  upon  the  record  of  that.  When,  from  lapse  of  time,  a 
mortgage  may  be  presumed  to  have  been  paid,  any  person  inter- 
ested in  the  lands  may  petition  the  court  for  a  discharge  of  it ; 
and  upon  hearing  and  proof  the  court  may  order  the  mortgage 
discharged  of  record.^ 

1  Nixon's  Dig.  1868,  p.  611  ;  Rev.  1877,  allege  that  the  mortgage  is  paid.  It  must 
P-  706.  also  allege  that  the  mortgagee  has  been 

2  2  11.  S.  1875,  p.  1149  ;  1  Fay's  Dig.  of  dead  for  more  than  five  years,  and  that 
Laws,  1874,  pp.  584,  592.  letters  testamentary  or  of  administration 

3  The  object  of  this  latter  provision  is  have  not  been  granted.  Although  the 
to  remove  an  existing  incumbrance  when  statute  relates  to  mortgages  presumed 
it  has  been  paid  in  fact  and  not  by  mere  from  lapse  of  time  to  have  been  paid,  yet 
presumption  of  law.     The  petition  must  payment  must  be  alleged  and  proved.     If 

92 


PROVISIONS   FOR  ENTERING   DISCHARGE   OF   RECORD.        [§§  1023-1025. 

1023.  North  Carolina.^  —  A  deed  of  trust  or  mortgage  may 
be  discharged  by  an  acknowledgment  of  satisfaction  of  the  trust 
or  mortgage  in  the  presence  of  the  register  of  deeds,  whose  duty 
it  is  forthwith  to  make  upon  the  margin  of  the  record  an  entry  of 
such  acknowledgment,  which  entry,  being  signed  by  the  person 
discharging  it  and  witnessed  by  the  register,  has  the  same  effect 
to  release  and  discharge  all  interest  of  the  trustee,  mortgagor,  or 
representative  in  such  deed  or  mortgage,  as  if  a  deed  of  release 
or  reconveyance  thereof  had  been  duly  executed  and  recorded. 

1024.  Ohio.2  —  Upon  the  payment  of  the  mortgage  debt  the 
mortgagee  must  enter  satisfaction  on  the  margin  of  the  record,  or 
upon  the  mortgage  itself,  which  entry  made  upon  the  mortgage 
the  recorder  of  deeds  for  the  county  enters  upon  the  margin  of 
the  record.  Such  entry  made  in  either  way  has  the  effect  of 
a  release.  These  provisions  for  the  entry  of  satisfaction  do  not 
preclude  a  release  made  in  any  other  customary  manner.  When 
satisfaction  is  made  by  application  of  the  proceeds  of  a  judi- 
cial sale,  or  when  the  lien  is  declared  invalid  by  judgment  or  de- 
cree, it  is  the  duty  of  the  clerk  to  enter  a  memorandum  of  the  pro- 
ceeding upon  the  record  of  the  mortgage,  and  the  court  may  order 
the  entry  of  such  memorandum.^ 

1025.  Oregon.*  —  A  mortgage  may  be  discharged  by  an  entry 
in  the  margin  of  the  record,  signed  by  the  mortgagee,  or  his  per- 
sonal representative  or  assignee,  acknowledging  the  satisfaction  of 
the  mortgage  in  the  presence  of  the  county  clerk  or  his  deputy, 
who  must  subscribe  the  same  as  a  witness ;  and  such  entry  has 
the  same  effect  as  a  deed  of  release  duly  acknowledged  and  re- 
corded. 

A  mortgage  may  also  be  discharged  upon  the  record  by  the 
county  clerk  in  whose  custody  it  may  be  whenever  there  shall  be 
presented  to  him  a  certificate  executed  by  the  mortgagee,  his  per- 
sonal representative  or  assignee,  duly  acknowledged,  or  proved 
and  certified,  specifying  that  the  mortgage  has  been  paid,  or  other- 
wise satisfied  or  discharged.  This  certificate  must  be  recorded 
with  a  reference  to  the  record  of  the  mortgage.     A  neglect  or 

the  evidence  shows  no  payment  except  by  i  Battle's  Revisal,  1873,  c.  35,  §  29. 

presumption  of  la\v,no  remedy  can  be  liad  ^  jjyy.  Stat.  18G8  (S.  &  C),  p.  471. 

by  this  summary  proceeding.     Re  Town-  ^  Act,  1872,  p.  74. 

send,  4  Hun,  31  ;  S.  C.   6   Thoinp.   &  C.  *  Gen.  Laws,  1872,  p.  519. 

227. 

93 


§§  1026-1028.]  PAYMKNT   AND   DISCHARGE. 

refusal  of  the  mortgagee,  or  his  personal  representative  or  as- 
signee, for  the  space  of  ten  days  after  request  and  tender  of  his 
reasonable  charges,  to  execute  a  dischai'ge,  renders  him  liable  in 
the  sura  of  one  hundred  dollars  damages,  and  also  for  all  actual 
damages  occasioned  by  such  neglect  or  refusal,  to  be  recovered  in 
an  action  at  law. 

1026.  Pennsylvania.^  —  A  mortgagee  upon  securing  satisfac- 
tion of  the  mortgage  is  required,  at  the  request  of  the  mort- 
gagor, to  enter  satisfaction  upon  the  margin  of  the  record,  v^hich 
entry  operates  as  a  full  release  and  discharge  of  the  mortgage. 
If  he  does  not  by  himself  or  his  attorney,  within  three  months 
after  such  request  and  a  tender  of  his  reasonable  charges,  repair 
to  the  office  for  recording  deeds  and  there  make  such  acknowledg- 
ment, he  shall  forfeit  and  pay  to  the  party  aggrieved  any  sum  not 
exceeding  the  mortgage  money,  to  be  recovered  by  suit.  When 
a  mortgage  is  payable  by  instalments,  the  receipt  of  each  instal- 
ment must  upon  request  be  entered  upon  the  record,  under  a  like 
penalty  for  a  refusal  or  neglect  so  to  do.  The  amount  claimed  to 
be  due  upon  a  mortgage  may  be  paid  into  court,  whereupon  a 
decree  is  made  that  satisfaction  be  entered  upon  the  mortgage  or 
that  the  property  be  reconveyed,  and  the  court  may  afterwards 
proceed  to  hear  and  determine  the  objections  to  the  payment  of 
any  part  of  the  money  in  court,  and  may  decree  accordingly. 

1027.  Rhode  Island.^ — The  holder  of  a  mortgage,  upon  re- 
ceiving full  satisfaction  for  the  money  due  upon  it,  must  at  the 
request  of  the  mortgagor,  his  heirs,  executors,  administrators,  or 
assignee,  and  at  his  or  their  cost,  discharge  the  same  by  release 
under  his  hand  and  seal,  upon  the  mortgage,  or  upon  the  face  or 
margin  of  the  record,  or  by  separate  instrument,  to  be  recorded  on 
the  face  or  margin  of  the  record,  or  in  the  record  book,  with  suit- 
able references  to  the  original  record.  His  neglect  or  refusal  for 
ten  days  after  a  request  and  tender  of  all  reasonable  charges  to 
discharge  the  mortgage  in  one  of  these  modes,  or  to  execute  a  re- 
lease and  quitclaim  of  the  mortgaged  estate,  renders  him  liable  to 
make  good  all  damages  that  may  accrue  for  want  of  such  dis- 
charge, to  be  recovered  in  an  action  of  the  case  in  a  court  of  record 
with  treble  costs. 

1028.  South  Carolina.^  —  Every  person  who  has  received  full 

Brightly's  Purdon's  Dig.  1872,  p.  481.        ^  Rev.  Stat.  1873,  pp.  427,  428. 
2  Gen.  Stat.  1872,  p.  356. 

94 


PROVISIONS   FOR   ENTERING   DISCHARGE   OF   RECORD.        [§§  1029-1033. 

payment  or  satisfaction  of  a  mortgage,  or  to  whom  a  legal  ten- 
der shall  have  been  made  of  his  or  their  debt,  damages,  costs,  and 
charges,  shall,  at  the  request  of  the  mortgagor  or  his  legal  repre- 
sentative, or  of  any  other  person  being  a  creditor  of  such  debtor,  or 
a  purchaser  under  him,  or  having  an  interest  in  any  estate  bound 
by  such  mortgage,  and  on  tender  of  the  fees  of  office  for  entering 
such  satisfaction,  within  three  months  after  such  request  made, 
enter  satisfaction  in  the  proper  office  on  such  mortgage,  which  for- 
ever discharges  and  satisfies  it.  If  any  person  who  has  received 
such  payment  or  satisfaction  does  not  within  that  time,  by  himself 
or  his  attorney,  after  request  and  tender  of  fees  of  office,  repair  to 
such  office  and  enter  satisfaction,  he  shall  for  such  refusal  or  neg- 
lect forfeit  to  the  party  aggrieved  a  sum  of  money  not  exceeding 
one  half  the  amount  of  the  debt  secured  by  the  mortgage,  to  be 
recovered  by  action.  On  the  recovery  of  judgment  by  the  plain- 
tiff, it  is  the  duty  of  the  judge  to  order  satisfaction  of  the  mort- 
gage to  be  entered  by  the  proper  officer. 

1029.  Tennessee.  —  There  are  no  statutory  provisions  as  to 
the  release  of  mortgages  and  deeds  of  trust.  A  deed  of  release 
is  used  for  this  purpose. 

1030.  Texas.  —  Mortgages  and  deeds  of  trust  are  discharged 
by  payment,  and  no  record  of  discharge  is  necessary  and  none  is 
provided  for. 

1031.  Utah  Territory.  —  No  provision  of  statute  in  relation  to 
the  release  of  mortgages  and  trust  deeds  is  found. 

1032.  Virginia.  —  Mortgages,  in  the  technical  sense  of  the 
term,  are  not  in  use,  deeds  of  trust  taking  their  place.  These  are 
discharged  by  a  deed  of  release.  Whenever  a  release  of  a  trust 
deed  or  other  obligation  shall  be  admitted  to  record  in  the  clerk's 
office  of  any  county  or  corporation  court,  or  of  the  Chancery  Court 
of  Richmond  city,  it  shall  be  the  duty  of  the  clerk  of  such  court 
to  make  a  memorandum  on  the  margin  of  the  page  of  the  book 
upon  which  such  trust  deed  or  other  obligation  is  recorded,  stating 
that  such  trust  deed  or  other  obligation  is  released,  and  referring 
to  the  page  and  number,  and  number  of  the  deed  book,  upon  which 
such  release  is  recorded.^ 

1033.  Vermont.2 — Mortgages  may  be  discharged  by  an  entry 
on  the  margin  of  the  record,  signed  by  the  mortgagee  or  his  at- 
torney, executor,  administrator,  or  assignee,  acknowledging  satis- 

1  Acts,  1876,  p.  130,  §  1.  2  Gen.  Stat.  1870,  c.  65,  §§  29-31. 

95 


§§  1034,  1035.]  PAYMENT   AND   DISCHARGE. 

faction  of  the  mortgage  ;  and  such  entry  has  the  same  effect  as  a 
deed  of  release  duly  acknowledged  and  recorded.  Mortgages 
may  also  be  discharged  by  the  mortgagee,  or  his  attorney,  execu- 
tor, administrator,  or  assignee,  acknowledging  payment  by  an 
entry  on  the  mortgage  deed,  signing  the  same  and  affixing  his 
seal  in  the  presence  of  one  or  more  witnesses,  which  entry,  upon 
being  recorded  on  the  margin  of  the  record  of  such  mortgage  in 
the  record  of  deeds,  discharges  the  mortgage.  If  a  mortgagee,  or 
other  person  whose  duty  it  is  to  discharge  the  mortgage,  refuses 
or  neglects  for  the  space  of  ten  days  after  request  and  a  tender  of 
his  reasonable  charges  to  discharge  the  mortgage  as  above  pro- 
vided, or  to  execute  and  acknowledge  a  deed  of  release,  he  is 
liable  for  all  damages  occasioned  by  such  neglect  or  refusal,  to  be 
recovered  in  an  action  on  the  case  ;  and  a  court  of  chancery  may 
grant  such  further  relief  as  justice  may  require. 

1034.  Washington  Territory.  —  No  provision  for  a  discharge 
of  mortgages  is  found.     A  common  deed  of  release  is  used. 

1035.  West  Virginia.!  —  Any  person  entitled  to  the  benefit  of 
a  lien  may  release  it  by  a  writing  signed  by  him  and  acknowl- 
edged and  admitted  to  record  in  the  proper  county.  It  is  sufficient 
if  it  describe  the  lien  by  any  words  that  will  identify  and  show 
an  intent  to  discharge  the  same.  The  release  is  presented  to  the 
recorder,  in  whose  office  the  lien  is  recorded  ;  and  from  the  time 
it  is  so  left  for  record  it  is  discharged  and  extinguished,  and  the 
estate  is  redeemed  and  vested  in  the  former  owner.  The  recorder 
makes  note  of  the  release  on  the  margin  of  the  record  of  the  lien. 
In  case  of  the  refusal  of  the  party  holding  such  lien  to  execute  a 
release  upon  request  of  the  party  entitled  to  it,  the  circuit  court 
having  jurisdiction,  after  reasonable  notice  to  the  party  so  refus- 
ing, and  if  no  good  cause  be  shown  against  it,  may  direct  the  re- 
corder to  execute  such  release,  which  has  the  effect  of  a  release 
made  by  the  party  himself.  The  proceedings  are  at  the  cost  of 
the  party  refusing  to  release.^ 

1  Releases   and   their   acknowledgment  corded    in  the    recorder's  office    of 

may  be  in  form  or  effect  as  follows,  in  case  county,  West  Virginia,  in  deed  book         , 

of  a  mortgage  or  trust  deed  : —  page       .     (To   be   signed)  A B . 

"  I,  A B ,  hereby  release  a  mort-  Acknowledged  before  the  subscriber  this 

gage   (or  deed  of  trust)  made   by  C day  of  .    (To  be  signed)    G 

D to  me  (or  to  E F ,  my  H ,  justice  (or  recorder,  notary  pub- 
trustee,    or    to ,  and    assigned    to  lie,  &c.,  as  the  case  may  be)." 

me),  dated  the           day  of         ,  and  re-  2  Code,  1870,  c.  76. 
96 


PROVISIONS   FOR   ENTERING   DISCHARGE    OF   RECORD.        [§§  1036,  1037. 

1036.  Wisconsin.^  —  A  recorded  mortgage  may  be  discharged 
by  an  entry  in  the  margin  of  the  record,  signed  by  the  mortgagee, 
his  personal  representatives  or  assignee,  acknowledging  the  sat- 
isfaction of  the  mortgage  in  the  presence  of  the  register  or  his 
deputy,  who  must  subscribe  the  same  as  a  witness  ;  and  such  en- 
try has  the  same  effect  as  a  deed  of  release.  Any  mortgage  may 
also  be  discharged  upon  the  record  by  the  register  of  deeds  when- 
ever there  shall  be  presented  to  him  a  certificate,  executed  by  the 
mortgagee,  his  personal  representatives  or  assigns,  acknowledged 
or  proved  and  properly  certified  to  entitle  it  to  be  recorded,  spec- 
ifying that  the  mortgage  has  been  paid  or  otherwise  satisfied. 
This  is  recorded  at  length,  with  proper  minutes  of  reference  to 
the  mortgage.  A  foreign  executor  or  administrator,  upon  filing  in 
the  county  court  of  the  county  an  authenticated  copy  of  his  ap- 
pointment, may  execute  a  certificate  of  discharge  of  a  mortgage  to 
like  effect  as  an  executor  or  administrator  appointed  under  the 
laws  of  the  state  may  do.  The  neglect  of  any  person  whose  duty 
it  is,  upon  the  payment  of  a  mortgage,  to  execute  a  discharge,  for 
the  space  of  seven  days  after  request  and  a  tender  of  his  reasona- 
ble charges,  to  discharge  the  mortgage  in  one  of  these  modes,  ren- 
ders him  liable  in  the  sum  of  one  hundred  dollars  damages,  and 
also  for  the  actual  damages  occasioned  by  such  neglect  or  refusal, 
to  be  recovered  by  action.^ 

1037.  Wyoming  Territory .^  —  A  mortgage  may  be  discharged 
by  an  entry  in  the  margin  of  the  record,  signed  by  the  mortgagee, 
or  his  personal  representative  or  assignee,  acknowledging  the  satis- 
faction of  the  mortgage  in  the  presence  of  the  register  of  deeds 
or  his  deputy,  who  shall  subscribe  the  same  as  a  witness,  and 
such  entry  shall  have  the  same  effect  as  a  deed  of  release  duly 
acknowledged  and  recorded.  A  discharge  may  also  be  made  upon 
the  record  by  the  register  whenever  there  shall  be  presented  to 
him  a  certificate,  executed  by  the  mortgagee,  his  personal  repre- 
sentative or  assign,  duly  acknowledged  or  proved  so  as  to  be  en- 
titled to  be  recorded,  specifying  that  such  mortgage  has  been  paid 
or  otherwise  satisfied.  This  certificate  is  recorded  at  length.  If 
a  mortgagee  or  other  holder  of  the  mortgage,  after  a  full  perform- 
ance of  the  condition,  whether  before  or  after  the  breach,  for  the 

1  R.  S.  1878,  c.  100,  §§  2247-2256.  to  enforce  such  penalty,  see  Teetshorn  v. 

2  As  to  the  sufficiency  of    a  complaint     Hull,  30  Wis.  162. 

8  Compiled  Laws,  1876,  c.  3,  §§  24-27. 
VOL.  n.  7  97 


§  1037.]  PAYMENT   AND   DISCHARGE. 

space  of  seven  days  after  request  and  tender  of  his  reasonable 
charges,  refuses  or  neglects  to  discharge  it  on  the  margin  of  the 
record,  or  to  execute  a  certificate  of  discharge,  he  is  liable  to  the 
mortgagor,  his  heirs  or  assigns,  in  the  sum  of  one  hundred  dollars, 
and  also  for  all  actual  damages  occasioned  by  such  neglect  or  re- 
fusal, to  be  I'ecovered  in  a  civil  action. 
98 


CHAPTER  XXII. 


REDEMPTION   OP   A   MORTGAGE. 


I.   Redemption  a  necessary  incident  of  a 

mortgage,  1038-1046. 
II.   Circumstances  affecting  redemption, 

1047-1051. 
III.  When    redemption    may    be    made, 
1052-1054. 


IV.    Who  may  redeem,  1055-1069. 
V.    The  sum  payable  to  effect  redemp- 
tion, 1070-1088. 
VI.    Contribution  to  redeem,  1089-1092. 
VII.  Pleadings  and  practice  on  bills  to  re- 
deem, 1093-1113. 


1.  Redemption  a  Necessary  Incident  of  a  Mortgage. 

1038.  Generally.  —  As  already  observed,^  mortgages  of  land 
were  at  first  estates  upon  condition,  and  tlie  mortgagor  not  per- 
forming the  condition  upon  the  day  stipulated  lost  his  estate  for- 
ever. The  idea  of  redemption  after  breach  of  the  condition  is 
said  to  have  been  introduced  into  English  jurisprudence  from  the 
Roman  law,  under  which  default  in  payment  of  the  mortgage 
debt  at  tlie  time  stipulated  did  not  work  a  forfeiture  of  the  prop- 
erty, but  the  creditor  thereupon  had  the  authority  to  sell  the  prop- 
erty and  reimburse  himself  out  of  the  proceeds.  Redemption  is 
purely  a  creature  of  courts  of  equity.  Adopting  the  principle  of 
the  civil  law,  that  a  mortgage  is  merely  a  security  for  the  pay- 
ment of  a  debt,  they  interposed  to  prevent  the  hardship  and  in- 
justice which  resulted  at  common  law  from  the  failure  of  the 
mortgagor  to  strictly  comply  with  the  conditions  of  the  mortgage. 
Although  the  mortgagor  had  forfeited  his  estate  at  law,  courts  of 
equity  allowed  him  to  redeem  his  estate  within  a  reasonable  time, 
upon  payment  of  the  debt  and  all  proper  charges,  and  this  right 
was  called  an  equity  of  redemption. 

1039.  An  express  stipulation  not  to  redeem  does  not  bind 
the  mortgagor.  So  fully  recognized  and  protected  are  the  equi- 
table rights  of  the  mortgagor,  that  he  is  relieved  from  his  own  ex- 
press agreement  that  upon  his  failure  to  pay  the  mortgage  debt 
at  the  time  stipulated  his  estate  shall  be  forfeited,  such    agree- 

*  §§  6-11. 

99 


§  1039.J  REDEMPTION    OF   A   MORTGAGE. 

meat  being  held  utterly  void  in  equity.^  He  cannot,  by  any  form 
of  words,  give  the  mortgage  the  conditional  character  it  had  in 
the  time  of  Littleton,  and  which  it  still  has  in  law  ;  for  jurisdic- 
tion of  the  subject  will  always  be  taken  by  a  court  of  chancery, 
which,  looking  to  the  object  of  the  transaction  to  give  security  for 
a  debt,  will  always  relieve  the  mortgagor  from  the  consequences  of 
his  failure  to  perform  the  condition  ;  and  will  protect  him  against 
his  own  covenants  not  to  redeem,  because  his  necessities  as  a 
debtor  may  have  forced  him  into  this  inequitable  agreement.  It 
matters  not  how  strongly  the  parties  may  express  their  agreement 
that  there  shall  be  no  redemption  ;  the  intent  being  contrary  to 
the  rules  of  equity  it  cannot  be  carried  into  effect.^ 

The  right  of  redemption  is  the  creature  of  the  law.  It  is  not 
in  terms  expressed  by  the  parties  in  the  mortgage.  But  whatever 
be  the  form  of  the  transaction,  if  intended  as  a  security  for  money, 
it  is  a  mortgage,  and  the  right  of  redemption  attaches  to  it.  Al- 
though a  deed  contain  a  condition  that  it  shall  be  absolute  and 
without  redemption  if  a  certain  sum  be  not  paid  by  the  grantor 
at  a  fixed  time,  and  the  condition  is  not  punctually  performed, 
there  is  a  right  of  redemption.^  "  At  law,"  says  Lord  Eldon,* 
"  the  mortgagee  is  under  obligation  to  reconvey  at  that  particular 
day  ;  and  yet  this  court  says  that,  though  the  money  is  not  paid 
at  the  time  stipulated,  if  paid  with  interest  at  the  time  a  recon- 
veyance is  demanded,  there  shall  be  a  reconveyance,  upon  this 
ground  :  that  the  contract  is  in  this  court  considered  a  mere  loan 
of  money  secured  by  a  pledge  of  the  estate.  But  that  is  a  doc- 
trine upon  which  this  court  acts  against  what  is  the  primd  facie 
import  of  the  terms  of  the  agreement  itself,  which  does  not  import 
at  law  that  once  a  mortgage  always  a  mortgage ;  but  equity  says 
that ;  and  the  doctrine  of  this  court  as  to  redemption  does  give 

1  2  White  &  Tudor's  Lead.  Cas.  in  Eq.  Me.  110  ;  Henry  v.  Davis,  7  Johns.  (N. 

1042.     lu  East  India  Co.  r.Atkyns,  Com.  Y.)    Ch.  40;  2    Cow.   324;    Holridge   v. 

R.  349,  it  is  said  that  if  a  man  makes  a  Gillespie,  2  Johns.  (N.  Y.)  Ch.  30. 

mortgage  and  covenants  not  to  bring  a  -  Bayley  w.  Bailey,  5  Gray  (Mass.),  510, 

bill  to  redeem,  nay,  if  he  goes  so  far,  as  per  Chief  Justice  Shaw. 

in  Stisted's  ca.se,  to  take  an  oath  that  he  ^  g^e  §  241;  Rogaii  v.  Walker,  1  Wis. 

will  not  redeem,  yet  he  shall  redeem.    See  527;  Kuowlton  i;.  Walker,  13   Wis.  264; 

2  Story's  Eq.  Juris.  §  1019,  and  cases  cited  ;  Orton  v.  Knab,  3  Wis.  576  ;  Plato  v.  Roe, 

Willels  V.  Burgess,  34  111.  494  ;  Preschba-  14  Wis.  453. 

ker  V.  Feaman,  32  111.  475 ;  Wyncoop  v.  *  In  Seton  v.   Slade,  7  Ves.  265,  273 ; 

Cowing,  21  111.  570  ;  Cherry  v.  Bowen,  4  sec,  also,  numerous  cases  cited  in  note  a; 

Sneed  (Tenn.),  415  ;  Baxter  v.  Child,  39  Spurgeon  v.  Collier,  1  Eden,  55,  60. 
100 


REDEMPTION  A  NECESSARY  INCIDENT  OF  A  MORTGAGE.     [§§  1040,  1041. 

countenance  to  that  strong  declaration  of  Lord  Thurlow,  that  the 
agreement  of  the  parties  will  not  alter  it ;  for  I  take  it  to  be  so 
in  the  case  of  a  mortgage  that  you  shall  not,  by  special  terms, 
alter  what  this  court  says  are  the  special  terms  of  that  contract." 

1040.  The  time  of  redemption  may  by  the  terms  of  the 
miortgage  be  postponed  for  a  terra  of  years,  or  even  during  the 
lifetime  of  the  mortgagor  or  of  any  other  pei'son,  and  this  arrange- 
ment is  generally  for  the  benefit  and  convenience  of  both  parties  ; 
the  mortgagor  by  this  means  securing  the  use  of  the  loan  for  a 
fixed  period,  and  the  mortgagee  obtaining  at  the  same  time  a  con- 
tinuing security  and  income  for  his  loan.  If  the  mortgaged  prop- 
erty is  ultimately  and  within  a  reasonable  period  to  be  restored 
to  the  mortgagor,  there  is  no  objection  to  a  mortgage  which  post- 
pones the  payment  and  redemption  for  a  period  of  considerable 
length  ;  and  it  will  be  enforced  according  to  its  terms.  It  is  only 
in  case  of  an  irredeemable  mortgage,  or  one  which  is  such  in  ef- 
fect, that  courts  of  equity  will  disregard  its  terms,  and  annex  to 
it  a  right  of  redemption  as  an  indispensable  requisite  of  every 
mortgage. 

How  long  the  right  to  redeem  may  be  postponed  must  depend 
upon  the  circumstances  of  the  case.  It  may  be  postponed  so  long 
by  the  terms  of  the  mortgage  as  to  become  oppressive  to  the 
mortgagor,  and  thus  give  equitable  ground  for  relief  by  an  ear- 
lier redemption.  In  one  case  such  relief  was  given  more  than 
twenty-five  years  after  the  date  of  the  mortgage,  though  it  had 
a  still  longer  period  to  run,  the  estate  having  increased  greatly  in 
value,  and  the  mortgagee  having  entered  and  retained  possession 
of  it  from  the  beginning  ;  ^  and  in  another  case  it  was  afforded 
against  a  mortgage  made  by  the  mortgagor  to  his  solicitor,  and  in 
which  there  was  a  restraint  upon  redemption  for  twent}^  years, 
with  twelve  months'  notice  after  that  time.^ 

1041.  An  agreement  to  confine  the  right  of  redemption  to 
the  mortgagor  alone,  or  to  any  specified  persons  or  class  of  per- 
sons, is  a  restraint  which  may  be  only  a  little  less  than  providing 
against  any  exercise  at  all  of  the  right,  and  is  relieved  against 
upon  the  same  ground.^     It  is  not  every  such  arrangement,  how- 

1  Talbot  V.  Braddill,  1  Vern.  183,  394.       comb  v.  Bonhain,  1  Vern.  8  ;  Freem.  Ch. 

2  Cowdry  v.  Day,  I  Gif.  316.  67  ;  Spurgeon  v.  Collier,  1  Eden,  ^5. 

8  Howard  v.  Harris,  1  Vern.  33 ;  New-         In    Newcomb    v.   Bonham,    the    Lord 

Chancellor  said  it  waa  a  general  rule,  once 

101 


§§  1042,  1043.]        REDEMPTION   OF   A   MORTGAGE. 

ever,  that  is  open  to  objection.  Where  the  mortgagor  limited  re- 
demption to  his  own  lifetime  for  the  purpose  of  benefiting  the 
mortgagee,  a  near  relative,  by  way  of  settlement,  and  reserved  to 
himself  the  right  to  redeem  at  any  time  during  his  own  life,  the 
mortgage  was  upheld. ^  In  like  manner  a  stipulation  in  the  mort- 
gage limiting  the  time  within  which  redemption  may  be  had  does 
not  affect  the  right  to  redeem.^ 

1042.  Any  arrangement  which  is  merely  an  evasion  of  the 
equitable  rule  that  every  mortgage  is  redeemable,  or  which  is  de- 
signed to  enable  the  mortgagee  to  wrest  the  property  from  the 
mortgagor,  is  open  to  the  same  objection  ;  ^  as,  for  instance,  an 
agreement  not  upon  any  event  or  condition  to  sue  for  redemp- 
tion or  for  the  discharge  of  the  mortgage ;  or  an  arrangement  by 
which  the  equity  of  redemption  is  conveyed  absolutely  to  the 
mortgagee,  but  without  intending  an  absolute  sale  of  it.*  The 
court  always  looks  with  disfavor  and  distrust  upon  any  arrange- 
ment by  which  it  is  proposed  to  transfer  the  equity  of  redemp- 
tion absolutely  to  the  mortgagee.^ 

1043.  An  agreement  that  if  the  money  be  not  paid  by  a  cer- 
tain day,  the  mortgagee  shall  have  the  estate  absolutely  upon 
the  payment  of  a  further  sum,  is  open  to  the  same  objection, 

a  mortgage  always  a  mortgage,  and  as  the  *  Vernon  v.  Bethell,  supra.  Lord  Chan- 
estate  was  expressly  redeemable  during  the  cellor  Northington  said  :  "  This  court,  as 
inortf,'aj:or's  lifetime,  it  must  continue  so  a  court  of  conscience,  is  very  jealous  of 
afterwards.  The  case  of  Howard  v.  Har-  persons  taking  securities  for  a  loan  and 
ris,  1  Vern.  33,  was  as  follows :  Howard  converting  such  securities  into  purchases, 
mortgaged  land,  and  the  proviso  for  re-  And  therefore  I  take  it  to  be  an  estab- 
deniption  was,  provided  that  I  myself,  or  lished  rule,  that  a  mortgagee  can  never 
the  heirs  male  of  my  body,  may  redeem,  provide  at  the  time  of  making  the  loan 
(In  note  to  the  case  it  is  said  there  was  a  for  any  event  or  condition  on  which  the 
covenant  that  no  one  else  should  redeem.)  equity  of  redemption  shall  be  discharged, 
The  question  was,  whether  his  assignee  and  the  conveyance  absolute.  And  there 
should  redeem  it,  and  it  was  decided  he  is  great  reason  and  justice  in  this  rule,  for 
should.  necessitous  men  are  not,  truly  sj)eaking, 

1  Bonham  v.  Newcomb,  1  Vern.  8 ;  2  free  men,  but  to  answer  a  present  exi- 
Vent.  364.  gency  will  submit  to  any  terms  that  the 

2  Stove  V.  Bounds,  1  Ohio  St.  107.  crafty  may  impose  upon  them.    The  pres- 
8  Vernon  v.  Bethell,  2  Eden,  110;  E.     ent  case  ....   is  not   that;    but  ...  . 

I.  Co.  V.  Atkyns,   1   Com.  349;  Toomes  it  seems  to  be  very  much  within  the  mis- 

V.  Conset,  3  Atk.  261  ;  and  see  Jennings  chief  which  the  rule  intended  to  prevent, 

V.  Ward,  2  Vern.  520 ;  Willett  v.   Win-  of  making  an  undue  use  of  the  influence 

nell,   1  Vern.  488 ;   and  see,   also,  3  Eq.  of  a  mortgagee." 

Cas.  Abr.  599.  ^  Sheckell  v.  Hopkins,  2  Md.  Ch.  89. 

102 


REDEMPTION  A  NECESSARY  INCIDENT  OF  A  MORTGAGE.     [§§  1044,  1045. 

and  is  redeemable  notwithstanding.^  Such  an  agreement  is  to  be 
distinguished  from  one  accompanying  a  transaction  which  is  not  a 
mortgage  but  an  absolute  sale,  whereby  the  grantor  is  allowed  to 
repurchase  upon  certain  terms.^  If  the  transaction  was  really  a 
mortgage  under  the  form  of  an  absolute  sale,  any  agreement  re- 
specting it  which  would  be  objectionable  in  case  of  a  formal  mort- 
gage is  equally  objectionable  here.  But  there  may  be  a  valid  sale 
with  an  agreement  for  repurchase.  "  That  this  court,"  says  Lord 
Cottenham,^  "  will  treat  a  transaction  as  a  mortgage,  although  it 
was  made  so  as  to  bear  the  appearance  of  an  absolute  sale,  if  it 
appears  that  the  parties  intended  it  to  be  a  mortgage,  is  no  doubt 
true  ;  but  it  is  equally  clear  that  if  the  parties  intended  an  abso- 
lute sale,  a  contemporaneous  agreement  for  a  purchase,  not  acted 
upon,  will  not  of  itself  entitle  the  vendors  to  redeem." 

1044.  Neither  is  the  mortgagee  allowed  to  obtain  a  collat- 
eral advantage  under  the  color  of  a  mortgage,  which  does  not 
strictly  belong  to  the  contract.  Of  this  character  is  a  stipulation 
that  if  interest  is  not  paid  at  the  end  of  the  year  it  shall  be  con- 
verted into  principal ;  *  an  agreement  for  the  payment  of  a  com- 
mission upon  the  amount  advanced,^  or  upon  the  rents  collected 
by  the  mortgagee,^  or  for  management  while  in  possession,"  or 
as  auctioneer  for  a  sale.^  "  A  man  shall  not  have  intei-est  for  his 
money,  and  a  collateral  advantage  besides  for  the  loan  of  it,  or 
clog  the  redemption  with  any  by-agreement."  ^ 

1045.  An  agreement  in  the  mortgage  itself,  or  executed 
separately  but  contemporaneously  with  the  mortgage,  that 
upon  default  the  mortgagor  shall  forthwith  release  the  equity  of 
redemption,  under  the  rule  already  stated,  is  void,  and  redemption 
will  be  allowed  notwithstanding.^"  An  agreement  executed  sub- 
sequently to  the  mortgage,  by  which  the  forfeiture  is  to  be  ab- 
solute if  the  debt  is  not  paid  at  the  day  stated,  may  be  void  as 

1  Price    ?;.    Perrie,    Freem.   Ch.   257  ;         6  Chappie  v.  Mahon,  I.  E.  5  Eq.  225. 
Brown  v.  Edwards,  1  Ch.  R.  222 ;  see  Re         ^  i^ejth  v.  Irvine,  1  My.  &  K.  277. 

p:d wards'  Est.  II   Jr.  Ch.  .'i67.  ''  Comyns  v.  Comyns,  I.  R.  5  Eq.  583. 

2  §§256-279.  8  Broad   v.   Selfe,   11    W.  R.   (M.  R.) 

3  In   Williams   v.  Owen,   5  M.  &  Cr.  1036;  9  Jur.  N.  S.  885  ;  Barrett  v.  Ilart- 
303  ;  and  see,  also.  Ward  v.  Wolverhanip-  ley,  2  L.  R.  Eq.  795. 

ton  Water  Works  Co.  L.  R.  13  Eq.  243  ;  »  Per  Master  of  the  Rolls  in  Jennings 
Davis  V.  Thomas,  1  Russ.  &  My.  506.  v.  Ward,  2  Vern.  520. 

*§  650;  Chambers  u.Goldwin,  9  Ves.  271.         i'  Clark,!;.  Henry,  2  Cow.  (N.  Y.)  324. 

103 


§§  1046,  1047.]        REDEMPTION   OF   A   MORTGAGE. 

well.^  It  lias  sonu'times  been  said  that  such  a  contract  will  not 
be  positively  disregarded  in  a  court  of  equity,  though  it  will  be 
viewed  suspiciously  and  watched  narrowly.'^ 

1046.  Redemption  after  release  improperly  obtained.  — 
Redemption  may  be  had  after  a  release  of  the  equity  of  redemp- 
tion to  the  mortgagee,  when  it  appears  that  he  availed  himself 
of  his  possession  of  the  property  and  of  the  embarrassed  condi- 
tion and  physical  debility  of  the  mortgagor  to  obtain  the  release.^ 
Or  if  it  appears  that  the  mortgagor,  induced  by  threats,  conveyed 
the  equity  of  redemption  to  the  mortgagee  for  a  grossly  inade- 
quate price.*  The  intention  of  the  parties  that  the  conveyance 
by  the  mortgagor  should  have  the  effect  of  barring  his  equity  of 
redemption  should  clearly  appear.^  If,  however,  the  release  of 
the  equity  of  redemption  was  made  in  good  faith  without  undue 
influence,  for  a  valuable  consideration,  it  will  be  sustained.^  A 
release  having  been  made  for  a  substantial  consideration,  parol 
evidence  is  not  admissible  to  show  that  the  sole  purpose  of  the 
release  was  to  enable  the  releasee  to  give  a  perfect  title  to  such 
portions  of  the  lands  as  he  might  be  able  to  sell,  applying  the 
proceeds  to  the  credit  of  the  releasor,  and  that  the  equity  of  re- 
demption in  the  portions  not  so  sold  should  remain  unaffected  by 
the  release.'' 

2.     Circumstances  affecting  Redemption. 

1047.  The  right  of  redemption  is  barred  by  a  foreclosure 
properly  made.*'  Though  the  mortgagee  holds  two  mortgages 
upon  the  premises,  the  foreclosure  of  one  of  them  extinguishes 
the  mortgagor's  equitable  interest.^     But  the  right  of  redemption 

1  Tennery  v.  Nicholson,  87  111.464;  (Mass.)  213;  Vennumr.Babcock,  13  Iowa, 
Batty  v.  Snook,  5  Mich.  231.  Per  Man-  194;  Green  v.  Butler,  26  Cal.  595  ;  Pritch- 
ning,  J. :  "  To  allow  the  equity  of  redemp-  ard  v.  Elton,  38  Conn.  434  ;  Wynkoop  v. 
tion  to  be  cut  off  by  a  forfeiture  of  it  in  a  Cowing,  21  111.  570  ;  Marshall  v.  Stewart, 
separate  contract  would  be  a  revival  of  the  17  Ohio,  356;  Holridge  v.  Gillespie,  2 
coninion  law  doctrine,  using  for  that  pur-  Johns.  (N.  Y.)  Ch.  30;  Remsen  v.  Hay, 
pose  two  instruments,  instead  of  one,  to  2  Edw.  (N.  Y.)  535  ;  Odell  v.  Montross, 
efTect  the  object."  6  Hun  (N.  Y.),  155  ;  68  N.  Y.  499. 

2  Hyndman  v.  Hyndman,  19  Vt.  9.  '  Sweet  v.  Mitchell,  15  Wis.  641. 

8  Thompson.  V.  Lee,  31  Ala.  292;   and  ^  Weiner  ?;.  Heintz,  17  111.  259;  Willis 

see  Russell  v.  Southard,  12  How.  139.  v.   M'Intosh,  Ga.  Dec.  162  ;  Stoddard  v. 

*  Brown  v.  Gaff'ney,  28  111.  149.  Forbes,  13  Iowa,  296;  Ballinger  v.  Bour- 

6  Ennor  v.  Thompson,  46  111.  214.  land,  87  111.  513. 

6  Falls  V.   Conway   Ins.    Co.    7    Allen  ^  Weiss  v.  Ailing,  34  Conn.  60. 
(Mass.),  46;  Trull  v.   Skinner,   17  Pick. 

104 


CIRCUMSTANCES   AFFECTING   REDEMPTION.  [§  1048. 

belonging  to  every  person  claiming  nnder  the  mortgagor,  and 
leing  an  incident  to  every  interest  in  the  land  mortgaged,  the 
rirht  cannot  be  extinguished  without  due  process  of  law,  which 
shiU  afford  every  one  having  such  interest  an  opportunity  of  ex- 
ercsing  his  right  to  redeem  ;  and  consequently  the  foreclosure 
ban  the  rights  of  redemption  of  those  only  who  are  made  parties 
to  he  action.  As  to  those  having  this  right,  who  are  not  made 
partes,  the  proceeding  is  a  nullity.^ 

Auurchaser  at  a  sale  under  a  foreclosure  suit  in  eeT[uity,  to 
whicl  a  junior  mortgagee  was  by  oversight  not  made  a  party, 
may  aaintain  a  suit  against  such  mortgagee  to  compel  him  to 
redeen  within  a  reasonable  time  or  to  be  foreclosed.  In  a  re- 
cent cise  in  New  Jersey  it  was  decreed  that  if  such  junior  in- 
curabraicer  should  elect  to  redeem,  he  should  pay  not  only  the 
principd  and  interest  of  the  mortgage  foreclosed,  but  also  the 
amount  paid  by  the  purchaser  upon  any  lien  prior  to  such  junior 
mortgag ;  and  that  the  junior  mortgagee  should,  upon  election 
to  redeei ,  give  notice  to  that  effect  within  thirty  days,  whereupon 
a  decree  iiould  be  entered  that  an  account  be  stated  by  a  master ; 
but  if  he  hould  fail  or  neglect  to  give  such  notice  of  his  election 
within  thetime  prescribed,  a  decree  of  strict  foreclosure  should  be 
entered.^ 

1048.  Exemption  may  be  had  after  foreclosure  when  the 
person  entiled  to  it  was  not  made  a  party  to  the  suit.'^  This 
rule  has  beer,  extended  to  give  the  purchaser  of  the  equity  from 
the  mortgago  the  right  to  redeem,  because  not  made  a  party  to 
the  suit,  even.hough  his  deed  was  not  on  record  at  the  time  of 
the  decree  of  oreclosure.*  A  purchaser  of  a  part  of  the  mort- 
gaged premise^iiis  a  right  to  redeem  under  like  circumstances,^ 
and  an  attachirr  creditor  has  the  same  right.^ 

A  wife  who  wns  a  part  of  the  mortgaged  premises,  but  was 
not  made  a  par/  to  the  foreclosure  suit,  is  allowed   to  redeem, 

1  Miner  V.  Beekraar50  N.  Y.  337  ;  14  Frear,  13  Wis.  4f)2 ;  Wiley  v.  Ewing,  47 

Abb.  Pr.  N.  S.  1 ;  42  iw.  Pr.  33  ;  Mur-  Ala.  418  ;  Hodgcn  v.  Glittery,  58  III.  431  ; 

dock,  V.  Ford,  17    Ind.  \  ;  Bates  v.  Rud-  Gowerw.  Winchester,  33  Iowa,  303  ;  Smith 

dick,  2  Iowa,  423;  John,n  v.  Harmon,  19  v.  Sinclair,  10   111.  108  ;  Strang  v.  Allen, 

Iowa,  56.  44  111.  428. 

■i  Parker  v.  Child,  25  1  J.  Eq.  41.  *  Hodson  v.  Treat,  7  Wis.  263. 

3  Farwell  v.  Murphy,  2v^is.  533  ;  Mur-  ^  Green  v.  Dixon,  9  Wis.  532. 

phy    V.   Farwell,   9    Wis.i02  ;    Pratt  v.  ^  Chandler  v.  Dyer,  37  Vt.  345. 

105 


§§  1049,  1050.]  REDEMPTION   OF   A   MORTGAGE. 

although  her  husband  was  made  a  party  to  the  suit,  and  was  fore- 
closed of  all  his  rights  in  the  remainder  of  the  land.^ 

Not  only  the  purchaser  at  the  foreclosure  sale  with  notice  tlBt 
one  interested  in  the  estate  was  not  made  a  party  to  the  forecbs- 
ure  suit,  but  also  any  grantee  of  such  purchaser,  with  like  notce, 
takes  the  title  subject  to  the  right  of  such  person  to  redeem.^ 

A  first  mortgagee  brought  a  foreclosure  suit  to  which  he  di(  not 
make  a  second  mortgagee  a  party.  Pending  this  suit  the  s'cond 
mortgagee  brought  a  foreclosure  suit  without  making  tin  first 
mortgagee  a  party  to  it.  Each  suit  proceeded  to  judgmeit  and 
sale  in  this  order.  It  was  held  that  the  purchaser  under  tie  first 
decree  and  sale  took  the  entire  fee,  subject  only  to  the  second 
mortgage,  the  payment  of  which  having  been  tendered,  he  pur- 
chaser at  the  foreclosure  sale  under  that  mortgage  was  not  al- 
lowed to  redeem.^  But  a  prior  mortgagee  has  no  rigk  to  re- 
deem a  subsequent  mortgage  although  he  has  barred  xU  other 
interests  in  the  equity  of  redemption  by  foreclosure.^ 

One  who  has  obtained  an  interest  in  the  property  pending  a 
foreclosure  suit  is  not  generally  permitted  to  redeem.^ 

On  a  bill  to  redeem  from  an  irregular  and  invalid  oreclosure, 
the  decree  should  provide  for  redemption  from  an  nforeclosed 
security,  and  not  from  a  void  sale  ;  and  in  determining  the  amount 
to  be  paid,  it  is  erroneous  to  make  a  rest  in  computi;^  interest  at 
the  date  of  the  sale.^ 

1049.  Mortgagor  maybe  estopped  by  his  owmcts.  —  If  the 
owner  of  an  equity  of  redemption  encourages  a  erson  to  pur- 
chase the  mortgage  by  promising  that  he  would  x^ver  redeem,  a 
court  of  equity  will  not  allow  him  to  violate  his  egagements  and 
redeem  from  such  purchaser  who  has  made  expnsive  improve- 
mants  on  the  land  ;  '^  nor  will  he  be  allowed  to  rieem  after  hav- 
ing joined  the  moi'tgagee  in  selling  the  premises^t  public  auction 
under  an  engagement  to  give  a  title  of  warnity,  and  he  has 
received  the  purchase  money  from  one  who  jirchased  in  good 
faith,  and  made  large  improvements.^ 

1050.  The  owner  of  the  equity  of  redeiption  may  main- 

1  Green  v.  Dixon,  9  Wis.  532.  &  Cook   v.   Micius,  5  Johns.   (N.  Y.) 

2  Hoppin  V.  Doty,  22  Wis.  621  ;  Hodson     Ch.  89. 

»;.  Treat,  7  Wis.  203.  6  Grover  v.  )x,  36  Mich.  461. 

3  Murphy  v.  Farwell,  9  Wis.  102.  ^  Fay;;.  Val'tine,  12  Pick.  (Mass.)  40. 
*  Goodman  v.  White,  20  Conn.  317.  8  Wright  y/Vhithead,  14  Vt.  268. 

106 


CIRCUMSTANCES   AFFECTING   REDEMPTION.  [§  1051. 

tain  a  bill  to  redeem  one  only  of  two  mortgages  held  by  the 
same  person  as  assignee  ;  and  the  fact  that  the  other  mortgage 
has  apparently  been  fully  foreclosed  will  not  prevent  a  decree  in 
favor  of  the  owner  as  to  the  mortgage  he  seeks  to  redeem.^ 

A  purchaser  at  an  execution  sale  of  the  mortgagor's  right  in 
equity  having  redeemed  the  mortgage,  the  mortgagor  may  redeem 
from  the  execution  sale  within  the  year  allowed  for  this,  by  pay- 
ing the  amount  required  for  the  redemption  of  that  interest  alone, 
and  may  afterwards  redeem  from  the  mortgage  within  the  time 
in  which  he  might  have  redeemed  the  estate  of  the  mortgagee  had 
no  sale  been  made.^ 

1051.  In  several  states  a  period  is  allowed  after  a  fore- 
closure sale  for  redemption.  A  brief  statement  of  the  fact, 
whether  redemption  is  allowed  or  not,  and  of  the  time  allowed 
after  sale,  is  given  in  a  note  below  ;  ^  but  a  fuller  statement  of  the 
law  in  this  respect  is  given  in  the  chapter  in  which  the  statutory 
provisions  of  the  several  states  in  relation  to  foreclosure  and  re- 
demption are  stated.* 

This  is  a  right  of  redemption  as  distinguished  from  an  equity 
of  redemption.^ 

As  already  noticed,  the  law  existing  at  the  time  of  the  execu- 
tion of  a  mortgage  is  that  which  governs  as  to  its  validity,^  It  is 
equally  true  that  the  law  existing  at  the  time  of  the  making  of 

1  Milliken  r.  Bailey,  61   Me.  316.  souri:    None.   Nebraska:   None.   Nevada: 

2  Atkins   V.   Sawyer,    1    Pick.    (Mass.)     Six  months  after  sale.     New  Hampshire : 
354.  One  year  after  entry  to  foreclose.     New 

8  Alabama :  For  two  years  after  sale.  Ar-  Jersey  :  None.    New  York  :  None.    North 

kansas:NoDe.   Calif  omia :  For  six  months  Carolina:   None.    Ohio:   None.     Oregon: 

by  owner.     Colorado:  For  six  months  by  Sixty    days     after    sale.     Pennsylvania; 

owner.     Connecticut:    Strict  foreclosure:  None;  but  suit  by  sciVe/aci'as  to  foreclose 

time  limited  by  court.     Delaware :  None,  cannot  be  commenced  until  the   lapse  of 

Florida :  None.    Georgia  :  None.   Illinois  :  one    year    after  default.     Rhode  Island  : 

For  twelve  months  by  owner.     Indiana:  None   after   sale;   but   three    years   after 

For  one  year  after  sale.     Iowa:  For  one  possession   taken   and  continued  either  by 

year  after  sale.   Kansas:  None.   Kentucky:  peaceable  entry  or  by  action.     South  Caro- 

None.    Louisiana:  None.     Maine:    None  Una:   None.     Tennessee :  Two  years  after 

after  sale,  but  three  years  after  possession  sale.    Texas,  None.  Vermont:    Time  lim- 

taken  for  foreclosure  or  Krst  advertisement,  iied  by  the  court,  not  exceedinf;  one  year 

Massachusetts:  None  after  sale,  but  three  from  judjinient.   Virginia:     None.    West 

years  after  possession  taken  for  foreclosure.  Virginia:  None.   Wisconsin:  None. 

Maryland:  None.   Michigan  :  None,  but  no  *  See  chapter  xxx. 

sale  can  be  made  within  one  year  after  fil-  "  Mayer  v.  Farmers'    Bank,   44    Iowa, 

in<?  the  bill  to  foreclose.     Minnesota:  One  212. 

year  after  sale.     Mississippi :  None.     Mis-  <*  §  663. 

107 


§  1051.]  REDEMPTION   OF   A   MORTGAGE. 

the  mortgage  governs  in  respect  to  redemption  und  foreclosure 
after  a  foreclosure  sale.  If,  upon  petition  of  a  second  mortgagee, 
tlie  whole  estate  be  sold  to  discharge  the  mortgages  in  the  order 
of  their  priority,  and  there  was  no  right  of  redemption  when 
the  first  mortgage  was  given,  a  third  mortgagee  cannot  redeem, 
though  he  might  have  done  so  had  the  second  mortgagee  merely 
foreclosed  his  own  mortgage.  The  third  mortgagee  cannot  com- 
plain because  he  is  chargeable  with  notice  of  the  contents  of  the 
petition.^  A  statute  giving  a  right  of  redemption  for  two  years 
after  sale  is  unconstitutional  and  void,  as  applied  to  mortgages 
executed  prior  to  the  enactment  of  the  statute,  as  impairing  the 
obligation  of  the  contract.^  In  like  manner  a  law  shortening  the 
time  of  redemption  from  two  years  to  one  year  after  sale  is  un- 
constitutional in  respect  to  mortgages  existing  at  the  time  it  took 
effect.  A  redemption  must  be  allowed  upon  such  mortgages  for 
two  years,  in  accordance  with  the  law  existing  when  they  were 
executed.^ 

A  mistake  by  the  officer  who  made  the  sale,  in  certifying  the 
time  of  redemption  to  be  one  year  instead  of  two,  as  allowed  by 
law,  does  not  avoid  the  foreclosure  ;  but  in  order  to  redeem  a  ten- 
der should  be  made  within  the  two  years.* 

When  the  holder  of  the  certificate  of  purchase,  after  the  expi- 
ration of  the  time  for  redemption,  allows  the  grantee  of  the  equity 
of  redemption  to  redeem,  and  indorses  and  delivers  the  certificate 
to  him,  this  is  a  redemption,  and  the  certificate  becomes  null  and 
void.  It  does  not  amount  to  a  transfer  of  the  certificate,  or  en- 
able the  holder  of  it  to  use  it  as  a  basis  of  title.^  A  purchaser 
of  the  premises  at  a  sheriff's  sale  under  execution  stands  in  the 
place  of  the  mortgagor  as  regards  the  time  within  which  he  may 
redeem  from  a  subsequent  foreclosure  sale,  and  cannot  redeem 
after  the  time  within  which  the  latter  may  redeem  has  expired, 
and  during  the  time  beyond  that  allowed  to  judgment  creditors  of 
the  mortgagor  for  redemption.^  The  right  of  a  second  mortgagee 
to  redeem  cannot  be  prejudiced  by  an  extension  of  the  statutory 

1  Gargan  v.  Grimes,  47  Iowa,  180.    See         ^  Carj^ill  v.  Power,  1  Midi.  3G9. 
Mayer  v.  Farmers'  Bank,  44  Iowa,  212.  ^  Johnstone  v.  Scott,  II  Mich.  232. 

2  Howard  v.  Buf,'bee,  24  How.  461  ;  ^  Frederick  v.  Ewing,  82  111.  363.  See 
Bugbee  r.  Howard,  32  Ala.  713;  Goeuen  McRoberts/;.  Conover,  71  111.  524  ;  Brooks 
V.  Schroeder,   8  Minn.  387;  Heyward    v.     v.  Keister,  4.5  Iowa,  303. 

Judd,  4  lb.  483  ;  Carroll  v.  Ro.ssiter,  10  lb.         «  McRoberts  v.  Conover,  supra. 
174. 

108 


WHEN   REDEMPTION   MAY    BE   MADE.  [§  1052. 

time  of  redemption  by  arrangement  between  the  first  mortgagee 
and  the  mortgagor.^  A  right  of  redemption  after  foreclosure, 
given  by  statute  in  any  state,  becomes  a  rule  of  property  binding 
upon  the  courts  of  the  United  States  sitting  in  such  states ;  and 
the  rules  of  practice  of  such  courts  must  be  made  to  conform  to 
the  law  of  the  state  so  far  as  may  be  necessaiy  to  give  full  effect 
to  the  right.2  But  although  a  decree  of  a  court  of  the  United 
States  sitting  in  Illinois  for  a  foreclosure  sale  without  providing 
for  a  redemption,  according  to  the  statute  of  that  state,  is  er- 
roneous, yet  it  is  not  void ;  and  a  mortgagor  entitled  to  re- 
deem must  exercise  his  right  within  a  year,  or  his  right  will 
be  lost.^  The  defect  in  such  a  decree  is  merely  in  its  failing  to 
provide  for  a  right  to  redeem.  The  court  having  jurisdiction 
of  the  cause,  its  decree  is  not  void,  and  it  cannot  be  questioned 
collaterally.  The  right  of  redemption  exists  by  force  of  the  stat- 
ute. The  deed  was  prematurely  executed  and  delivered  to  the 
purchaser,  but  the  right  to  redeem  was  not  thereby  impaired.  As 
affecting  the  sale  itself,  it  would  seem  that  a  sale  without  redemp- 
tion would  insure  a  better  price  than  a  sale  with  a  right  to  re- 
deem ;  so  that  the  mortgagor  has  nothing  to  complain  of  in  that 
respect.  Had  all  been  in  regular  form,  and  a  certificate  of  pur- 
chase only  given  on  the  sale,  the  purchaser  would,  after  the  lapse 
of  the  statutory  period,  be  entitled  to  a  deed,  thei-e  having  been  no 
effort  for  the  exercise  of  the  right  of  redemption.  Now,  after  the 
lapse  of  that  time  the  purchaser  having  the  deed,  although  it  was 
prematurely  executed,  the  purchaser  may  hold  it,  there  being  no 
equitable  ground  for  the  interposition  of  a  court  of  equity  to  set 
the  sale  aside. 

3.    When  Redemption  may  he  made. 

1052.  There  can  be  no  redemption  till  the  mortgage  is  due. 
A  mortgage  payable  at  a  fixed  time  cannot  be  redeemed  until 
that  time  has  arrived;*  and  even  if  the  mortgagor  tenders  the 
interest  for  the  whole  period  the  mortgage  has  to  run,  a  suit  to 
redeem  cannot  be  maintained  against  the  objection  of  the  mort- 

1  Sager  v.  Tapper,  35  Mich.  134.  Co.  (111.    Supreme  Ct.   FeK  1879)  11  Chi- 

■2  Briue  v.  lusurauce  Cu.  96  U.  S.  627  ;  6  cago  L.  N.  19.3. 
Reporter,  33  ;  7  Am.  L.  Kee.  85  ;   2  South.         *  Brown  v.  Cole,  14  Sim.  427  ;    14  L.  J. 

L.  J.  185;  Orvis  v.  Powell  (U.  S.  Supreme  N.  S.  Ch.  167  ;  Burrowes  v.  Molloy,  2  Jo. 

Ct.  Oct.  T.  1878),  8  Cent.  L.  J.  74.  &  Lat.  521  ;  Abbe  v.  Goodwin,   7   Conn. 

3  Suitterlin    v.   Conn.   Mut.   Life    Ins.  377.     See  Moore  v.  Cord,  14  Wis.  213. 

109 


§  1053.]  REDEMPTION    OF   A    MORTGAGE. 

gagee  until  the  mortgage  is  due  by  its  terms.  The  courts  cannot 
substitute  another  contract  for  that  made  by  the  parties.^  A 
mortgage  payable  on  demand,  or  at  or  before  a  day  certain,  may 
be  redeemed  at  any  time.^ 

The  right  of  redemption  continues  until  barred  by  lapse  of 
time,  by  strict  foreclosure,  or  by  deed  given  in  completion  of  a 
foreclosure  sale.^  It  is  not  barred  by  any  proceeding  at  law  other 
than  a  foreclosure  suit,  as,  for  instance,  a  judgment  for  waste 
against  the  owner  of  the  equity  for  cutting  trees  on  the  mort- 
gaged land.*  There  is  no  remedy  for  obtaining  redemption  other 
than  a  bill  in  equity.^  Even  in  case  the  mortgage  debt  has  been 
wholly  paid,  if  the  mortgagee  claims  that  something  is  still  due, 
a  bill  in  equity  is  the  proper  remedy.^  In  such  a  suit  he  may  de- 
mand that  the  mortgage  be  discharged,  but  must  offer  to  pay  any 
sum  that  may  be  adjudged  to  be  still  due.^  So  long  as  the  mort- 
gage remains  in  force  and  unsatisfied  at  law,  the  mortgagor  can- 
not maintain  ejectment  against  the  mortgagee.^  The  mortgagee 
cannot  be  compelled  to  take  the  mortgaged  property  at  an  ap- 
praised value.^  He  cannot  be  compelled  to  take  anything  but 
money  in  payment,  and  that  only  by  a  bill  in  equity  properly 
framed  for  the  purpose. ^*^ 

As  a  general  rule  when  a  suit  to  redeem  by  the  mortgagor 
would  be  barred  by  the  statute  of  limitations,  a  suit  by  any  one 
claiming  under  him  would  be  barred  also.^^ 

Redemption  is  not  barred  under  a  decree  of  foreclosure  and 
sale,  until  the  sale  is  consummated  by  the  confirmation  of  the  mas- 
ter's report  and  the  delivery  of  the  deed.^^ 

1053.  The  time  of  redemption  may  by  agreement  of  the 
parties  be  extended  beyond  the  period  at  which  it  would  other- 
wise be  barred  by  foreclosure  ;  as  by  an  agreement  to  allow  six 
months  to  redeem  after  the  regular  time  for  redemption  would 

1  Abbe  V.  Goodwin,  7  Conn.  377.  Payson,  3  Mass.  559 ;  Parsons  v.  Welles, 

2  John  &  Cherry  Street,  in  re,  19  Wend.     17  Mass.  419. 

(N.  Y.)  659;  8  Pell  V.   Ulmar,  18  N.  Y.  139;  Chase 

8  Hull  V.  McCall,  13  Iowa,  467  ;  Wei-  v.  Peck,  21  N.  Y.  581. 

ner  i'.  Ileintz,  17  111.  259;  Ileimbergcr  v.  ^  Craft  v.  Bullard.  1  Sin.  &  M.  (Miss.) 

Boyd,  18  Ind.  420.  Ch.  366. 

*  Paulling  V.  Barron, -32  Ala.  9.  ^^  Craft  v.  Bullard,  supra. 

6  Pearce  v.  Savage,  45  Me.  90;  Doug-  "  Tucker  u.  White,  2  Dev.  &  B.  (N.  C.) 

lass  V.  Woodworth,  51  Barb.  (N.  Y.)  79.  Eq.  289. 

6  Pratt  u.  Skolfield,  45  Me.  386.  12  Brown  v.  Frost,  1  Hoffra.  (N.  Y.)  41. 

7  Beach  v.  Cooke,  28  N.  Y.  508 ;  Hill  v. 

110 


WHEN   REDEMPTION   MAY    BE   MADE.  [§  1054. 

expire.^  If  the  promise  be  to  reconvey  or  to  allow  the  premises 
to  be  redeemed  within  a  reasonable  time,  the  mortgagor  must  be 
ready  to  tender  his  money  within  a  reasonable  time  or  he  will  be 
allowed  no  relief.^  Such  a  promise  made  after  the  time  limited 
for  redemption  has  passed  will  have  no  effect  unless  made  on  a 
legal  and  sufficient  consideration.^  But  an  agreement  made  be- 
fore the  time  of  redemption  has  expired  to  allow  further  time, 
though  made  without  consideration,  caiuiot  be  disregarded  after 
the  time  of  redemption  has  passed,  but  will  be  enforced  by  the 
court.^  There  is  nothing  in  the  relation  of  the  parties  to  prevent 
their  freely  contracting  with  each  other,  or  to  prevent  the  mort- 
gagee or  the  purchaser  at  a  foreclosure  sale  from  imposing  his 
own  terms  as  a  condition  of  extending  the  time  for  redeeming.^ 
If  the  arrangement  is  such  that  the  foreclosure  is  opened,  as 
would  usually  be  the  case,  then  the  failure  of  the  mortgagor  to 
pay  the  debt  or  to  perform  his  agreement,  whatever  it  may  be, 
strictly  within  the  extended  time  agreed  upon,  does  not  work  an 
absolute  forfeiture  of  his  right,  but  he  may  still  redeem  within  a 
reasonable  time.^ 

Where  a  time  of  redemption  is  allowed  by  statute  after  a  sale 
under  a  power,  payments  made  after  the  foreclosure,  and  received 
with  the  clear  understanding  that  the  redemption  should  be  com- 
pleted by  payment  of  the  whole  sum  necessary  for  that  purpose 
within  the  year  allowed  by  the  statute,  are  in  affirmance  and  not 
in  avoidance  of  the  sale,  and  their  acceptance  does  not  operate  to 
open  the  sale  and  extend  the  time  of  redemption.^  Moreover,  a 
court  of  equity  has  no  power  to  extend  the  time  for  redemption 
on  a  statutory  foreclosure,  although  redemption  within  the  time 
allowed  for  it  by  statute  has  been  prevented  by  accident  and  mis- 
fortune, or  by  unavoidable  mental  and  physical  disorder.^ 

1054.  Advantage  of  an  irregular  foreclosure  must  be  taken 
within  a  reasonable  time.     After  a  lapse  of  sixteen  years,  dur- 

1  Chase  v.  McLellan,  49  Me.  375.  tice  Campbell  said:  "  Where  a  valid  leg- 

2  McNew  V.  Booth,  42  Mo.  189.  islative  act  has  determined  the  conditions 
8  Smalley  v.  Hickok,  12  Vt.  153.  on  which  rights  shall  vest  or  be  forfeited, 
*  Davis  V.  Dresback,  81  111.  393.  and  there  has  been  no  fraud  in  conducting 
^  Ross  V.  Sutherland,  81  111.  275.  the  legal  measures,  no  court  can  interpose 
'^  Dodge  i;.  Brewer,  31  Mich.  227.  conditions  or  qualifications  in  violation  of 
■^  Cameron  v.  Adams,  31  Mich.  426.  the  statute.  The  parties  have  a  right  to 
^  Cameron  v.  Adams,  supra.    Mr.  Jus-     stand  upon  the  terms  of  the  law." 

Ill 


§  1055.]  REDEMPTION   OF   A   MORTGAGE. 

ing  which  time  the  mortgagor  has  had  knowledge  of  the  facts,  he 
will  not  be  allowed  to  redeem.^ 

Where  a  mortgagee  just  previous  to  the  completion  of  a  fore- 
closure by  possession  promised  the  mortgagor  that  "  lie  would 
give  him  some  time,  but  that  he  must  not  wait  long,  as  he  might 
take  advantage  of  the  mortgage,"  after  tlie  lapse  of  live  years 
without  payment  or  tender,  the  right  of  redemption  was  held  to 
be  no  longer  remaining.^  If  a  mortgagor  wishes  to  take  advan- 
tage of  an  irregularity  in  a  foreclosure  sale  made  in  a  suit  in 
equity,  to  which  he  was  a  party,. his  remedy  is  by  application  to 
have  the  sale  set  aside  and  a  new  sale  granted :  he  has  no  power 
to  redeem,  although  the  mortgagee  was  the  purchaser  at  the  sale.^ 

The  mortgagor's  right  to  redeem  is  unaffected  by  an  entry  to 
foreclose  made  by  the  heirs  of  the  mortgagee  and  possession  there- 
under for  more  than  three  years  ;  and  the  mortgagor  may,  on  a 
bill  in  equity  against  them  and  an  administrator  of  the  mort- 
gagee's estate,  redeem  the  land  from  the  mortgage,  and  compel 
the  heirs  at  law  to  account  for  the  rents  and  profits  to  the  admin- 
istrator, to  be  applied  by  him  on  the  mortgage  debt.* 

4.    Who  may  redeem. 

1055.  In  general  any  party  in  interest  may  redeem.  To 
sustain  a  bill  to  redeem,  the  plaintiff  must  have  either  the  mort- 
gagor's title  or  some  subsisting  interest  under  it.^  It  is  not  neces- 
sary that  he  should  be  interested  in  the  whole  of  the  mortgaged 
premises;  if  he  owns  the  equity  of  redemption  of  a  portion  of 
them  only,  he  may  redeem  the  entire  premises.*^  Neither  is  it 
necessary  to  entitle  one  to  redeem  that  he  should  have  an  interest 
in  fee  in  the  premises  ;  the  right  may  be  exercised  by  a  tenant  for 
years.'^  In  general  any  one  who  has  an  interest  in  the  land,  and 
would  be  a  loser  by  a  foreclosure,  is  entitled  to  redeem.^  His  in- 
terest must  be  derived  directly  or  indirectly  from  or  through  the 

1  Bergen  v.  Bennett,  1  Caines  (N.  Y.)  «  Boqut  v.  Coburn,  27  Barb.  (N.  Y.) 
Cas.  1 ;  Mulvey  v.  Gibbons,  87  111.  3&7.  230  ;   Ex  parte  Willard,  5  Wend.  (N.  Y.) 

2  Danforth  v.  Roberts,  20  Me.  307.  94. 

8  Brown   v.  Frost,    10   Paige   (N.  Y.),  '  Averill  d.  Taylor,  8  N.  Y.  44. 

243,  reversing  S.  C.  Iloff.  Cb.  41.  ^  Pearce  v.  Morris,  L.  R.  5  Ch.  App. 

4  Haskins  y.  Hawkes,  108  Mass.  379.  229;  Boqut  v.   Coburn,  supra;   Scott    v. 

5  Lomax  I,-.  Bird,  1  Vern.182;  Grants.  Henry,  .13  Ark.  112;  Piatt  v.  Squire,  12 
Duane,  9  Johns.  (N.  Y.)  591;  Boarman  Met.  (Mass.)  494;  Farnum  v.  Metcalf ,  8 
V.  Catlett,  13  Sm.  &  M.  (Miss.)  149.  Gush.  (Mass.)  46. 

112 


WHO  MAY  REDEEM.         [§§  1056,  1057. 

right  of  the  mortgagor,  so  that  he  is  in  privity  of  title  with  the 
mortgagor,  and  an  owner  of  a  part  of  his  original  equity,  or  of 
some  interest  in  it.  If  he  is  affected  by  the  mortgage  he  may 
redeem  ;  if  he  is  not  affected  by  it  there  is  no  occasion  for  his  re- 
deeming, and  he  is  not  allowed  to  do  so.^ 

Xlie  performance  of  a  contract  to  pasture  cattle  was  secured  by 
a  mortgage  given  to  the  owner  of  the  cattle  by  the  owner  of  the 
rancho  where  they  were  pastured.  A  creditor  of  the  mortgagee 
levied  upon  the  cattle,  and  purchased  them  at  the  sale  under  the 
execution,  but  there  was  no  seizure  or  sale  of  the  contract  to  pas- 
ture ;  therefore  it  was  held  that  he  had  no  right  to  redeem  the 
rancho  from  a  prior  mortgage.^ 

1056.  A  mortgagor  who  has  conveyed  the  equity  of  re- 
demption by  a  warranty  deed  to  a  third  person  cannot  maintain 
a  bill  to  redeem  ;  ^  nor  can  a  mortgagor  whose  right  in  equity  has 
been  sold  on  execution  redeem  the  land,  unless  he  has  first  re- 
deemed it  from  the  execution  sale  within  the  time  allowed,  even 
though  the  purchaser  of  the  equity  does  not  redeem  ;  *  but  if  the 
purchaser  redeems  the  mortgage  within  the  time  allowed  the  judg- 
ment debtor  to  redeem  from  the  execution  sale,  the  latter  may 
then  within  that  time  redeem  from  the  execution  sale,  by  paying 
the  amount  which  may  have  been  satisfied  upon  the  execution  by 
the  sale,  and  may  afterwards,  at  any  time  before  the  right  to  re- 
deem the  mortgage  is  barred  by  lapse  of  time,  redeem  from  the 
mortgage  in  the  same  way  that  he  might  have  redeemed  from 
the  original  raoi'tgagee  had  there  been  no  sale  on  execution.^  A 
sale  of  the  equity  of  redemption  upon  an  execution  obtained  by 
the  holder  of  the  mortgage  for  the  mortgage  debt  is  void,  and 
the  mortgagor  may  redeem  as  if  no  such  sale  had  been  made.^ 

1057.  A  mortgagor  whose  equity  of  redemption  has  been 
foreclosed  by  a  second  mortgagee  cannot  redeem  the  first  mort- 
gage, because  his  title  is  then  wholly  extinguished  and  vested  in 
the  second  mortgagee,  who  alone  is  entitled  to  redeem  the  first 

1  Moore  v.  Beasom,  44  N.  H.  215;  *  Ingcrsoll  v.  Sawyer,  2  Pick.  (Mass.) 
Brewer  u.  Hyudiuan,  18  N.  H.  9 ;  Smith  276.  See  Peabody  v.  Patten,  lb.  517; 
V.  Austin,  9  Mich.  465  ;    Boarman  v.  Cat-     Bigelow  v.  Wilison,  1  lb.  485. 

lett,  21    Miss.   149;   Purvis   v.  Brown,   4  '>  Atkins  u.  Sawyer,  1  Pick.  (Mass.)  354. 

Ired.  (N.  C.)  Eq.  413.  •*  Atkins  v.   H&vryer,  supra ;  Washburn 

2  Al)adie  v.  Lobero,  36  Cal.  390.  v.  Goodwiu,  17  Pick.  (Mass.)  137. 
«  Phillips  V.  Leavitt,  54  Me.  405  ;    True 

V.  Haluy,  24  Me.  297. 

TOL.  II.  8  11Q 


§§  1058-1060.]         REDEMPTION    OF    A   MORTGAGE. 

• 
mortgage.^     But   if  the   first  mortgagee  foi-eclose   the  mortgage 

without  making  the  second  mortgagee  a  party  to  the  proceeding, 

the  second  mortgagee  may  redeem  the  first  mortgage,  and  the 

mortgagor  still  having  the  right  to  redeem  the  second  mortgage 

may,  by  so  doing,  acquire  the  right  of  the  second  mortgagee  to 

redeem  the  first.^ 

1058.  Where  a  mortgage  is  conditioned  for  the  support  of 
the  mortgagee  for  life,  a  grantee  of  the  mortgagor,  in  order  to 
redeem,  must  allege  and  prove  that  the  transfer  to  him  was  made 
with  the  consent  of  the  mortgagee  ;  though  it  need  not  appear 
that  such  consent  was  in  writing.^  The  purchaser  of  an  estate 
subject  to  such  a  mortgage  is  sometimes  allovred  to  redeem  on 
paying  a  compensation  in  money  for  the  past  neglect  of  the  mort- 
gagor, and  an  allowance  in  money  for  the  future.* 

1059.  In  general  only  the  mortgagor  and  those  who  hold 
a  legal  title  under  him  can  redeem.^  An  equitable  title  does 
not  give  this  right ;  and  therefore  one  holding  a  bond  for  a  con- 
veyance of  land  by  the  mortgagor  cannot  maintain  a  bill  to  re- 
deem.^ He  may  be  authorized,  however,  to  use  the  name  of  the 
holder  of  the  legal  title  to  pursue  the  remedy  in  his  name. 

A  trustee  who  holds  the  legal  estate  or  some  interest  in  it  is 
the  proper  party  to  redeem  ;  though  the  persons  beneficially  in- 
terested may  redeem  upon  the  refusal  of  the  trustee  to  do  so.^ 

One  who  has  assigned  a  mortgage  as  security  for  his  debt  has 
a  right  to  redeem  it  on  paying  the  debt.  If  his  assignee  has  fore- 
closed the  mortgage  and  purchased  the  premises,  he  may  still  re- 
deem.^ But  the  mortgagee  may  insist  that  the  assignee  who 
holds  the  legal  title  to  the  property  shall  be  made  a  party  to  the 
suit ;  ^  though  the  suit  may  be  brought  in  the  name  of  the  as- 
signee for  the  benefit  of  both. 

1060.  The  grantor  by  an  absolute  deed  which  is  merely  se- 
curity for  a  debt,  and  therefore  a  mortgage,  has  the  same  right 
to  redeem  as  a  mortgagor  in  a  formal  mortgage,  so  long  as  the 

1  Colwell  V.  Warner,  36  Conn.  224.  278.      The  statute  limits  the  power  of  the 

2  Goodman  v.  White,  26  Conn.  317.  court  to  those  having  a  legal  right. 

8  See  §§  380-395  ;    Bryant  v.  Jackson,  ^  Fray  v.  Drew,  11  Jur.  N.  S.  130. 

59Me.  165;  Bryantf.  Erskine,  55Me.  153.  »  gige    v.  Manhattan  Co.   1   Paige  (N. 

*  See  §  395  ;  Austin  v.  Austin,  9  Vt.  420.  Y.),  48  ;  Hoyt  v.  Martense,  16  N.  Y.  231, 

6  Lomax  y.  Bird,  1   Vern.  182;    Grant  reversing  S.  C.  8  How.  Pra.  196. 

u.  Duane,  9  Johns.  (N.  Y.)591.  »  Winterbottom     v.  Tayloe,  2     Drew. 

^  McDougaldt;.  Capron,  7Gray  (Mass.),  279. 

114 


WHO   MAY   REDEEM.  [§  1060. 

grantee  retains  the'  property  ;  ^  and  after  he  has  sold  it  to  a  bond 
fide  purchaser  from  whom  redemption  cannot  be  made,  he  is  still 
liable  to  account  to  the  grantor  for  the  value  of  the  land  at  the 
time  it  should  have  been  restored  to  him.^  Redemption  may  also 
be  had  against  the  assignee  of  the  grantee,  in  case  he  had  notice 
that  the  delivery  of  the  defeasance  was  evaded  by  fraud  or  other- 
wise, or  that  the  transaction  was  in  fact  a  mortgage.^ 

If  it  appears  that  the  absolute  deed  was  really  a  sale,  or  that 
by  agreement  of  parties,  and  upon  an  adequate  consideration, 
what  was  really  a  mortgage  at  first  was  afterwards  changed  into 
a  sale,  no  redemption  will  be  permitted.  Evidence  of  the  acts 
and  declarations  of  the  parties  is  admissible  to  show  the  original 
intention  and  the  subsequent  agreement  as  well."*  But  by  some 
courts  it  is  held  in  such  case  that  the  plaintiff  cannot  be  relieved 
on  the  mere  proof  of  the  grantee's  declarations.  There  must  be 
proof  of  fraud,  ignorance,  or  mistake,  or  of  facts  inconsistent  with 
the  idea  of  an  absolute  purchase.^  It  has  been  shown  elsewhere 
that  the  rule  in  the  several  states  as  to  the  admission  of  ]3arol 
evidence  to  establish  the  relation  of  mortgagor  and  mortgagee, 
where  the  transaction  is  in  the  form  of  an  absolute  deed,  is  not 
uniform ;  ^  and  there  is  the  same  want  of  uniformity  as  to  the 
admission  of  parol  evidence  to  show  that  this  relation  once  es- 
tablished has  been  given  up  by  a  surrender  of  the  right  of  re- 
demption. In  general  it  may  be  said  that  the  same  degree  of 
evidence  is  required  to  establish  the  surrender  of  the  right  that  is 
required  in  the  same  state  to  establish  the  existence  of  the  right. 

A  conveyance  by  a  debtor  in  trust  to  secure  his  debt  is  to  be 
considered  a  mortgage,  to  which  the  right  of  redemption  is  inci- 
dent.7 

In  case  of  a  mortgage  in  the  form  of  an  absolute  deed  in  a  suit 
to  redeem,  the  court  will  decree  a  reconveyance  of  the  property 
upon  the  payment  of  the  debt.^     If  the  conveyance  was  to  secure 

1  Veriderhaise  v.  Hugues,  13  N.J.  Eq.  ^  Sowell  v.  Barrett,  1  Busb.  (N.  C.) 
(2Bea3.)410;  Ballard  v.  Jones,  6  Humph.  Eq.  50;  Lewis  v.  Owen,  1  Ired.  (N.  C.) 
(Tenn.)  455.  Eq.  290;  Allen  v.  McKac,  4  lb.  325. 

2  Meehan  v.  Forrester,  52  N.  Y.  277.  "^  §§  283-342. 

8  Daniels  v.  Alvord,  2    Root   (Conn.),  ''  Chowning  u.  Cox,  1  Rand.  (Va.)306; 

196  ;  Belton  v.  Avery,  lb.  279.     See,  also,  Pennington  v.  Hanby,  4  Munf.  ( Va.)  140. 

Minor   v.    Woodbridge,  2   Root    (Conn.),  See  §  332. 

274.  8   Sherwood   v.  Wilson,  2    Sweeny  (N. 

*  Watkins    v.   Stockett,   6    Har.   &   J.  Y.),  684 ;  Skinner  u.  Miller,  5  Litt.  (Ky.) 

(Md.)  435.  84;  Thompson  v.  Campbell,  6  T.  B.  Mon. 

115 


§§  1061,  1062.]    REDEMPTION  OF  A  MORTGAGE. 

a  general  indebtedness,  and  neither  party  supposed  the  land 
would  be  redeemed,  upon  a  redemption  by  an  execution  creditor 
of  the  mortgagor,  the  mortgagee  should  be  allowed  also  for  the 
value  of  improvements  made  by  him.^  The  grantee  by  an  abso- 
lute deed,  apparently  having  an  absolute  title,  may  convey  the 
property  to  a  bond  fide  purchaser,  discharged  of  all  right  of  re- 
demption, and  in  such  case  the  only  remedy  of  the  mortgagor  is 
a  personal  one  against  the  mortgagee.^  The  estate  is  discharged 
of  the  right  to  redeem.  The  length  of  time  that  has  elapsed  after 
the  making  of  an  absolute  deed,  before  any  steps  are  taken  to- 
wards redeeming,  is  an  important  element  in  determining  whether 
the  trrantor  has  the  right  to  redeem.^ 

1061.  An  assignee  of  the  equity  of  redemption  may  gener- 
ally redeem,  whether  he  holds  under  a  voluntary  assignment  or 
by  an  assignment  in  law ;  *  and  it  is  immaterial  that  the  land  is 
in  the  possession  of  a  disseisor.^ 

It  is  not  necessary  for  the  assignee  to  prove  that  the  assign- 
ment was  made  on  a  valuable  consideration. 

The  mortgagor's  assignee  is  under  no  obligation  to  redeem  from 
a  prior  mortgage,  unless  he  has  expressly  or  impliedly  agreed  to 
do  so.  If  he  has  bought  subject  to  the  mortgage  without  assum- 
ing it,  or  if  he  has  purchased  the  equity  of  redemption  at  an  ex- 
ecution sale,  he  has  the  right,  if  he  chooses  to  do  so,  to  redeem, 
but  he  cannot  be  compelled  to  do  so.^ 

1062.  Upon  the  death  of  the  mortgagor  or  owner  of  the 
equity  of  redemption  his  heir  at  law  may  redeem.'^-  If,  how- 
ever, the  mortgagor  devised  the  equity  of  redemption,  the  devisee 
is  the  proper  party  to  redeem,^  and  in  that  case  the  heir  at  law 
need  not  be  made  a  party  unless  he  contests  the  will.  During 
the  pendency  of  a  suit  to  establish  the  will,  an  heir  cannot  make 
a  sale  of  the  equity  which  will  be  valid  against  a  devisee,  or  which 

(Ky.)  120.      As  to  form  of  decree,  see  L.  ^  Wellington    v.  Gale,  13  Mass.   488, 

R.  5  Ch.  App.  229.  per   Parker,  C  J.      Otherwise   in  North 

1  Blair  v.  Chamblin,  39  III.  521.  Carolina   when    the  bill    is    against    the 

2  Whittick  V.  Kane,  1    Paige  (N.   Y.),  mortgagor   as    well    as    the    mortgagee. 
202.     See  §§  339-342.  Medley  v.  Mask,  4  Ired.  (N.  C.)  Eq.  339. 

«  Mellish  i;.  Robertson,  25  Vt.  603.    See  ^  Rogers  v.  Meyers,  68  111.  92. 

§  330.  "^  Pym  v.  Bowreman,  3  Swanst.  241,  n.  ; 

■*  Thome    v.    Thorne,    1     Vern.    182;  Saunders  f.  Hawkins,  8  Vin.  Abr.  156. 
"White  V.  Bond,  16  Mass.  400 ;    Diinlap  v.  ^  Lewis  v.  Nangle,  2  Ves.  Sen.  431 ;  Phil- 
Wilson,  32  111.  517;    Scott  v.  Henry,  13  ips  v.  Hele,  1  Ch.  R.  190. 
Ark.  112. 

116 


WHO   MAY   REDEEM.  [§  1063. 

will  prevent  his  redeeming  after  bis  right  under  the  will  is  estab- 
lished.^ A  legatee  whose  legacy  is  made  a  charge  upon  the 
mortgaged  estate  may  redeem.  If  land  be  specifically  devised,  it 
is  presumed,  in  the  absence  of  an  expressed  intention  to  the  con- 
trary, that  the  land  is  to  be  exonerated  from  all  mortgages  placed 
upon  it  by  the  testator ;  and  the  general  rule  prevails  even  when 
several  parcels  are  devised  to  different  persons  and  the  testator 
has  directed  the  removal  of  the  incumbrances  as  to  some  of  the 
parcels  and  not  as  to  others.^  Consequently  in  such  case  the  ex- 
ecutor should  redeem. 

The  guardian  of  an  infant  heir  may  redeem,  and  so  may  the 
guardian  of  an  insane  person.^ 

1063.  A  part-owner  of  an  equity  of  redemption  may  redeem,* 
but  he  cannot  require  other  part-owners  to  join  with  him  in  re- 
deeming from  the  mortgage.^  If  he  elects  to  redeem,  he  must  pay 
the  whole  amount  due  on  the  mortgage,  and  hold  it  to  his  own 
use,  unless  the  other  part-owners  come  in  and  pay  their  proper 
contributory  shares.^  Nor  does  it  make  any  difference  that  th  e 
holder  of  the  mortgage  is  also  a  part-owner  of  the  equity  of  re- 
demption in  common  with  the  mortgagor.  Such  mortgagee  is  not 
bound  to  receive  a  part  of  the  mortgage  debt,  and  he  may  wholly 
decline  paying  anything  toward  the  redemption  ;  though  he  may, 
like  any  part-owner,  at  his  election,  contribute  to  the  payment  of 
the  redemption  money  and  share  the  benefits  of  the  payment.'^ 

A  mortgage  of  a  railroad  company  covering  the  whole  line  of 
its  road  lying  in  two  states  may  be  redeemed  by  a  purchaser  upon 
execution  of  the  equity  of  redemption  of  the  part  of  the  road 
situate  in  one  state.^ 

One  tenant  in  common  of  an  equity  of  redemption  may  redeem 
in  order  to  protect  his  own  interest ;  ^  but  by  so  doing  he  is  not 
entitled  to  the  whole  property  to  the  exclusion  of  his  co-tenant. 
The  redemption  by  one  enures  to  the  benefit  of  the  other  so  far  as 

1  Fiuch  V.  Ncwnham,  2  Vern.  216.  230 ;  flubbard  v.  Ascutney  Mill  Dam  Co. 

2  Richardson  v.  Hill,  124  Mass.  228.  20  Vt.  402;    Gibson  v.  Crehore,  5  Pick. 
»  Powell  Mort.  285  a,  note;    Pardee  v.     (Mass.)  146. 

Van  Anken,  3  Barb.  (N.  Y.)  534.  «  Taylor  v.  Porter,  7  Mass.  355  ;    Calk- 

*  Howard  i;.  Harris,  1  Vern.  33;  Pearce  ins  v.  Munsel,  2  Root  (Conn.),  333. 

V.  Morris,  L.  R.  5  Ch.  App.  227;    Taylor  ^  Merritt  v.  Hosmer,  11  Gray  (Mass.), 

V.  Porter,  7  Mass.  355.  276. 

6  Ex  parte  Willard,  5  Wend.  (N.  Y.)  8  Wood  v.  Goodwin,  49  Me.  260. 

94;  Boqut  v.  Coburn,  27  Barb.    (N.  Y.)  »  Wynne  i;.  Sty  an,  2  Ph.  306. 

117 


§  106-4.]  REDEMPTION   OF   A   MORTGAGE. 

to  save  a  forfeiture.  The  co-tenant  may  be  compelled  to  pay  his 
proportion  of  the  debt.  The  tenant  who  redeems  becomes  subro- 
gated to  the  right  of  the  mortgagee,  and  if  his  co-tenant  does  not 
pa}'  his  share,  he  may  be  foreclosed  of  his  right  to  redeem.  The 
tenant  in  possession,  and  in  receipt  of  the  whole  of  the  rents,  is 
subject  to  account  with  his  co-tenant.^  But  neither  has  an  equi- 
table right  to  redeem  the  whole  and  keep  the  other  from  sharing 
iu  the  redemption.^ 

In  like  manner  where  land  is  conveyed  to  two  persons,  one  of 
whom  pays  his  half  of  the  purchase  money,  and  joins  with  his  co- 
tenant  in  a  mortgage  of  the  whole  estate  to  secure  the  payment 
of  the  other  half,  and  afterwards  releases  his  interest  to  the  mort- 
gagee, his  co-tenant  cannot  redeem  without  paying  the  whole 
amount  of  the  mortgage.^ 

But  one  tenant  in  common  cannot  redeem  his  share  only  of  the 
estate,  as  this  would  be  in  violation  of  the  principle  that  a  mort- 
gage must  be  wholly  redeemed  or  not  at  all ;  *  and  a  partition  of 
the  estate  with  his  co-tenant,  unless  consented  to  by  the  mort- 
gagee, does  not  affect  him,  and  his  consent  cannot  be  demanded.^ 

1064.  A  subsequent  mortgagee  may  redeem  from  a  prior 
mortgagee  at  any  time  after  the  maturity  of  the  prior  mort- 
gage;^ but  if  he  brings  a  bill  to  redeem  within  the  time  limited 
by  statute  and  fails  to  prosecute  it,  the  owner  of  the  equity  of 
redemiDtion  cannot,  after  that  time  has  expired,  maintain  a  bill  to 
be  let  in  to  prosecute  the  bill  to  redeem  brought  by  such  mort- 
gagee.    The  junior  mortgagee  is  under  no  obligation  to  redeem 

1  Bentley  v.  Bates,  4  Y.  &  C.  Exch.  Henry,  13  Ark.  112;  Kimmell  u.  Willard, 
182;  Gibson  v.  Crehore,  5  Pick.  (Mass.)  1  Dougl.  (Mich.)  217  ;  Sager  y.  Tupper, 
152;  Young  v.  Williams,  17  Conn.  393;  35  Mich.  134;  Hill  v.  White,  1  N.  J. 
Kings*)ury  v.  Buckner,  70  111.  514;  Mc-  Eq.  (Saxt.)  435;  Wiley  v.  Ewing,  47 
Laughlin  v.  Curts,  27  Wis.  644.  Ala.  418;    Morse  v.  Smith,  83  111.  396. 

2  Seymour  v.  Davis,  35  Conn.  264.  See  2  Fisher  Mort.  3d  ed.  765. 

*  Crafts  y.  Crafts,  13  Gray  (Mass.),  360.         In    South   Carolina  it  is  provided   by 

*  Pow.  Mort.  342  a,  note.  statute    that   subsequent  mortgagees,  al- 
6  Watkins  v.  Williams,  3  Mac.  &  G.     though  they  have  not  recorded  their  mort- 

622  ;  16  Jur.  181.     See  §  706.  gages,  may  redeem  prior  mortgages;  but 

•'  Bigelow  V.  Wilson,   1   Pick.  (Mass.)  that  any  person  who  .shall  mortgage  the 

493  ;  Haines  v.  Beach,  3  Johns.  (N.  Y.)  Ch.  same  lands  a  second  time  while  the  former 

460 ;  Pardee  v.  Van  Anken,  3  Barb.  (N.  mortgage  is  in   force  and  not  discharged 

Y.)  534 ;  Jenkins  v.  Continental  Ins.  Co.  shall  have  no  power  or  liberty  of  redemp- 

12  How.  (N.  Y.)  Pr.  66;  Frost  v.  Yonkers  tion,  in  equity  or  otherwise.     Rev.   Stat. 

Savings   Bank,   70  N.  Y.  553;  Dings  v.  1873,  p.  424. 
Parshall,  7  Hun  (N.  Y.),  522;    Scott  v. 

118 


WHO   MAY    REDEEM.  [§  1064. 

the  prior  mortgage,  or  to  prosecute  a  suit  for  the  purpose,  or  to 
do  any  act  to  prevent  the  first  mortgagee  from  foreclosing.^ 

The  language  of  most  of  the  cases  is  broad  enough  to  establish 
the  doctrine  that  a  junior  mortgagee,  simply  as  such  and  under 
all  circumstances,  has  the  absolute  right  to  pay  off  or  redeem  from 
a  senior  mortgage  past  due.  But  it  is  intimated  in  a  few  cases  that 
such  a  right  may  not  exist  when  the  senior  mortgagee  desires  to 
hold  his  mortgage  as  an  investment,  and  does  not  seek  or  threaten 
to  enforce  its  collection.  In  such  case  the  junior  mortgagee  may 
be  in  no  danger  of  loss  or  embarrassment,  and  thus  may  not  have 
any  equitable  right  to  disturb  or  interfere  with  the  senior  mort- 
gage to  which  he  is  not  a  party,  and  for  the  payment  of  which  he 
is  in  no  way  liable.^  This  question  would  rarely  arise,  because 
generally  if  the  property  is  ample  to  satisfy  the  junior  mortgagee 
he  will  foreclose  his  mortgage  instead  of  making  a  further  invest- 
ment in  the  first  mortgage.  If  the  holder  of  the  first  mortgage  is 
seeking  to  enforce  his  security  there  can  be  no  question  of  the 
right  of  the  holder  of  the  junior  mortgage  to  redeem.^ 

This  right  of  a  junior  mortgagee  to  redeem  is  a  common  law 
right,  and  is  entirely  independent  of  a  right  of  redemption  given 
to  creditors  and  limited  to  a  specified  time.  It  applies  to  deeds 
of  trust  to  secure  the  payment  of  debts  as  well  as  to  mortgages 
proper.*  The  junior  mortgagee  may  redeem  although  his  mort- 
gage be  of  an  estate  subject  to  a  homestead  right,  and  therefore 
only  a  reversionary  interest  after  the  expiration  of  that  right.^ 

As  between  several  persons  entitled  to  redeem,  redemption  will 
be  decreed  according  to  the  priority  of  the  claimants.^ 

A  subsequent  mortgagee,  who  has  assigned  his  mortgage  as  col- 
lateral security  for  a  debt  of  his  own,  may  redeem  the  mortgaged 
premises  from  a  sale  under  a  prior  mortgage  ;  and  his  redemption 
enures  to  the  benefit  of  his  assignee.  He  has  such  an  interest  in 
the  property  as,  with  the  consent  of  the  holder  of  the  certificate 

1  Mclntier  v.  Shaw,  6  Allen  (Mass.),  *  Wiley  y.  Ewing,  47  Ala.  418;  Beach 
83.  V.  Shaw,  57  111.  17;  Hodgen  v.  Guttery, 

2  Frost  V.  Yonkers  Savings  Bank,  70     68  111.  431. 

N.  Y.  553,  557,  per  Earl,  J. ;  and  to  like  5  Smith  v.   Provin,   4   Allen    (Mass.), 

effect  see  Bigelow  v.  Cassedy,  26  N.  J.  516. 

Eq.  557,  562,  per  Van  Syckel,  T.  «  Moore    v.   Bcasom,  44    N.   H.   215; 

»  Frost  V.  Yonkers  Savings  Bank,  sujira ;  Brewer  v.  Hyndman,  18  N,  H.  9. 
Ellsworth   V.   Lockwood,   42    N.    Y.   89 ; 
Norton  v.  Warner,  3  Edw.  (N.  Y.)  Ch.  106, 

119 


§§  1065-1067.]         REDEMPTION   OF   A   MORTGAGE. 

of  foreclosure  sale,  gives  hiai  the  right  to  redeem  in  order  to  pro- 
tect that  claim. ^ 

1065.  A  tenant  for  life,-  or  a  tenant  in  tail,^  '"^^y  redeem  ;  as 
may  also  a  remainder-man  or  reversioner;  though  the  life  tenant  is 
entitled  to  the  iirst  option,*  and  by  taking  an  assignment  of  the 
mortgage  himself  niay  prevent  a  redemption  by  the  remainder- 
man ;  ^  but  he  cannot  compel  the  remainder-man  to  redeem  him. 
So,  also,  one  who  has  a  life  estate  in  remainder,  or  other  contin- 
gent interest,  may  redeem.*^ 

1066.  A  tenant  for  years  may  redeem,''  although  his  lease 
being  made  after  the  mortgage,  and  good  against  the  mortgagor, 
is  not  good  against  the  mortgagee ;  ^  and  although  the  lessor,  be- 
ing also  the  mortgagor,  has  released  his  equity  of  redemption  to 
the  holder  of  the  mortgage.^ 

A  lessee  of  the  mortgagor  having  a  lease  valid  against  him, 
though  not  binding  upon  the  mortgagee  for  the  reason  that  it  was 
made  after  the  mortgage,  has  a  redeemable  interest,^*'  and  it  does 
not  matter  that  the  leasehold  premises  are  only  a  part  of  the 
mortgaged  estate.^^ 

It  has  been  held,  also,  that  a  person  in  possession  of  the  land 
under  a  verbal  contract  to  buy  it  may  redeem  ;  ^^  and  a  person 
having  only  an  easement  in  the  land  may  redeem.^^ 

1067.  A  widow  who  has  joined  in  a  mortgage  in  release  of 
dower  may  redeem,  for  she  is  entitled  to  dower  as  against  every 
person  except  the  mortgagee  and  those  claiming  under  him.^*  It 
is  only  when  the  mortgage  debt  is  paid,  or  when  the  mortgagee 
does  not  object,  that  her  dower  can  be  assigned.  But  she  can  re- 
deem without  a  legal  assignment  of  it.^^     If  any  person  claiming 

1  Manning  v.  Markel,  19  Iowa,  103.  lo  Keech  v.  Hall,  1  Doug.  21,  per  Lord 

2  Wicks  V.  Scrivens,  1  J>  &  H.  21.5;  Mansfield;  Averill  ?;.  Taylor,  8  N.  Y.  44. 
Aynsly  v.   Reed,  1   Dick.  249 ;  Evans  v.         "  Averill  v.  Taylor,  supra. 

.Jones,   Kay,  29  ;  Lamson  v.  Drake,   105  12  r.owry  v.  Tew,  3  Barb.  (N.  Y.)  Ch. 

Mass.  .564.  407. 

^  Playford  v.  Playford,  4  Hare,  546.  i^  Bacon  v.  Bowdoin,  22  Pick.  (Mass.) 

*  Ravald  v.  Russell,  Younge,  9.  405  ;  2  Met.  591.     See,  however,  §  1059, 

5  Raffety  v.  King,  1  Keen,  601.  and  McDougald  y.Capron,  7  Gray  (Mass.), 

6  Davis  V.  Wetherell,  13  Allen  (Mass.),  278. 

60 ;  Ravald  v.  Russell,  supra.  "  Opdyke  v.  Bartles,  11  N.  J.   Eq.  (3 

7  Hamilton  v.  Dobbs,  19  N.J.  Eq.  227;  Stock.)  133;  McArthur  v.  Franklin,  16 
Averill  v.  Taylor,  8  N.  Y.  44  ;  Bacon  v.  Ohio  St.  193;  Denton  v.  Nanny,  8  Barb, 
Bowdoin,  22  Pick.  (Mass.)  401.  (N.  Y.)  618. 

**  Keech  v.  Hall,  1  Doug.  21.  is  Henry's  case,  4  Cush.  (Mass.)   257; 

9  Bacon  v.  Bowdoin,  2  Met.  (Mass.),  591.     Eaton  i>.  Simonds,  14   Pick.   (Mass.)  98; 

120 


WHO   MAY    UEDEEM.  [§  1067. 

under  her  husband  redeems,  she  may  repay  her  proportion  of  the 
amount  so  paid,  and  have  her  dower  in  the  whole  estate.  But  if 
she  herself  redeems  from  the  mortgagee,  or  from  his  assignee,  she 
must  pay  the  whole  amount  due  on  the  mortgage.^  She  has  an 
undoubted  right  to  do  this  although  she  has  released  her  dower  in 
the  mortgage.^  And  even  a  wife  having  only  an  inchoate  right  of 
dower  may  redeem  land  from  a  mortgage  in  which  she  has  joined 
with  her  husband  to  release  dower.^  A  foreclosure  of  the  mort- 
gage in  the  lifetime  of  the  husband,  by  a  suit  in  equity  to  which 
she  was  not  made  a  party,  does  not  cut  off  her  right  of  redemp- 
tion ;  *  though  when  the  foreclosure  is  by  a  writ  of  entry,  or  by 
scire  facias,  it  is  not  necessary  to  join  the  wife  as  a  party  in  order 
to  bar  her  right  of  redemption.'''  A  widow  in  bringing  a  bill  in 
equity  to  redeem  should  show  that  she  has  no  remedy  in  law  to 
recover  her  dower ;  and  should  therefore  set  forth  that  her  hus- 
band was  seised  during  coverture  of  only  an  equity  of  redemption, 
or  that  if  he  was  seised  of  the  legal  estate  she  joined  him  in  the 
mortgage.^ 

Under  a  statute  making  it  the  duty  of  an  administrator  to  pay 
liens  and  mortgages  upon  the  estate  of  the  deceased  in  preference 
to  his  general  debts,  if  the  administrator,  having  in  his  hands  suf- 
ficient personal  property  for  the  purpose,  suffers  a  mortgage  to  be 
foreclosed,  the  widow  of  the  deceased  is  entitled  to  recover  of  the 
administrator  the  same  proportion  of  the  personal  assets  she  would 
have  had  in  the  land,  had  these  assets  been  applied  in  discharge  of 
the  mortgage.  It  is  immaterial  in  this  respect  that  the  mortgage 
was  given  for  purchase  money  and  the  wife  did  not  join  in  the 
mortgage."  Her  joining  in  the  mortgage  operates  as  a  waiver  of 
her  right  only  in  favor  of  the  mortgagee ;  and  her  right  to  her 

Gibson  v.  Crehore,  5  Pick.  (Mass.)  146;  2  McCabe  t;.  Bellows,  1  Allen  (Mass.), 

Peabody  v.  Patten,  2  lb.  519.  269. 

1  Newton  v.  Cook,  4  Gray  (Mass.),  46;  »  Davis  v.  Wetherell,  13  Allen  (Mass.), 

Gibson  w.  Crehore,  5  Pick.   (Mass.)   146;  60;  Lamb  ?;.  Montap:ue,  112  Mass.  352. 

McCabe  v.  Bellows,  7  Gray  (Mass.),  148  ;  <  Mills  v.  Van  Voorhies,  20  N.  Y.  412  ; 

Brown   ?>.  Lapham,  3  Cush.  (Mass.)  554.  10  Abb.  Pr.   152;    Wheeler  v.   Morris,   2 

The   (Ireisions   in    Gibson   v.    Crehore,  5  Bosw.  (N.  Y.)  524. 

Pick.  (Mass.)   151,  and  Van  Vronker  v.  ^  Pitts  y.  Aldrich.  II  Allen  (Mass.), 39. 

Eastman,  7  Met.  (Mass.)  157,  are  not  in  ^  Mcssiter  v.  Wright,  16  Pick.  (Mass.) 

conflict   with    the   doctrine    stated,  as  in  151  ;  Davis  y.  Wetherell,  13  Allen  (Mass.), 

those  cases  the  mortgagee  did  not  object  60;  Whitcomb  y.  Sutlierland,  18  111.  578. 

to  a  redemption  on  the  payment  of  a  pro-  ''  Morgan  v.   Sackett,   57   Ind.  580;   2 

portional  part.  R,  S.  of  Ind.  1876,  p.  .534. 

121 


§§  10G8,  1000.]        RKDEMPTION   OF   A   MORTGAGE. 

sharo  in  tln>  real  ostuto  is  absolute  against  general  creditors  of  her 
ImsUanil.' 

An  I'stato  of  homestead  entitles  the  holder  of  it  to  redeem.^ 
A  tenant  by  the  curtesy  may  in  lilce  manner  redeem. 
A  jointress  liavin>^  a  jointure  in  the  whole  or  any  part  of  the 
niortffaired  estate  has  a  redeemable  interest  in  it.^  And  although 
she  grants  a  term  for  years  out  of  her  estate  for  life,  so  long  even 
as  ninety-nine  years,  "  there  rests  a  reversion  in  her  which  natu- 
rally attraets  the  redemption."  * 

1068.  A  surety  of  a  debt  secured  by  a  junior  mortgage  upon 
payment  of  the  debt  is  entitled  by  subrogation  to  the  rights  of 
such  mortgagee  to  redeem  from  a  prior  mortgagee.^  It  is  his 
right  to  avail  himself  of  the  security  held  by  the  creditor.  He 
thereupon  stands  in  the  place  of  the  creditor,  and  may  enforce 
the  security  against  the  property  mortgaged  and  the  person  pri- 
marily liable  without  any  assignment  to  himself  of  the  mortgage.^ 

1069.  A  judgment  creditor  of  the  mortgagor  may  redeem.'^ 
It  is  not  necessary  that  an  execution  should  first  be  issued,  or  the 
land  sold.^  But  a  general  creditor  whose  claim  is  not  a  charge 
upon  the  mortgaged  estate  has  no  right  of  redemption.^  A  mort- 
gagee who  has  sold  the  mortgaged  premises  under  a  decree  of 
court,  having  a  personal  judgment  for  a  deficiency,  has  been 
deemed  a  judgment  creditor  entitled  to  redeem  from  the  pur- 
chaser at  the  foreclosure  sale,  where  redemption  after  such  sale  is 
allowed  by  statute. ^*^ 

The  purchiiser  of  an  equity  of  redemption  sold  on  execution  has 

>  Perry  i-.  Barton,  25  Ind.  274;  New-  Bank  of  Niagara  v.  Rosevelt,  9  Cow.  (N. 

comer    v.   Wallace,  30    Ind.   216;   Hun-  Y.)  409  ;  S.  C.  Hopk.  Ch.579  ;  Van  Buren 

sucker  v.  Smith,  49  Ind.  1 14.  v.  Olmstead,  5  Paige  (N.  Y.),  9  ;  Quin  v. 

«  Jones   V.  Meredith,  Bunb.  347  ;  Cas-  Brittain,  Hoff.  (N.  Y.)  Ch.  353 ;  Augur 

borne  V.  IngliB,  2  Jac.  &  W.  194;  I  Atk.  v.   Winslow,    Clarke    (N.   Y.),    Ch.  258; 

603  ;  Stone  v.  Godfrey,  18  Jur.  162.  Brainard  v.  Cooper,  10  N.  Y.  356;  Bene- 

»  Howard  v.  Harris,  I  Vern.  33.  diet  v.  Oilman,  4  Paige  (N.  Y.),  58 ;  Dau- 

♦  Brend  v.  Brend,  1  Vern.  213.  chy  v.  Bennett,  7  How.  (N.  Y.)  Pr.  375; 

'  Wright  V.  Moricy,  10  Ves.  12 ;  Crisp,  Hitt  v.  Holliday,  2  Litt.  (Ky.)  332;  Stain- 

Krp.   I   Atk.  133  ;  Mahew  v.  Crickett,  2  back  v.  Geddy,  1  Dev.  &  B.  (N.  C.)  Eq.  479. 

Swangt.    185;    Wade   v.   Coope,   2   Sim.  8  Cases  above,  and  Brainard  y.  Cooper, 

155;  Green  v.   Wynn,  L.  R.  4  Ch.  App.  supra. 

204 ;  Averill  v.  Taylor,  8  N.  Y.  44.  9  Story's  Eq.  Jur.  §  1023  ;  Grant  v.  Du- 

«  Arerili  i-.  Taylor,  supra.  ane,  9  Johns.  (N.  Y.)  611. 

7  Mildred  v.  Austin,  L.  R.  8  Eq.  220;  w  Greene  i;.  Doane,  57  Ind.  186.    See 

StoDebewer  r.  Thompson,   2  Atk.  440;  §  1334. 
122 


THE   SUM   PAYABLE   TO   EFFECT   REDEMPTION.  [§  1070. 

a  right  to  redeem,^  although  the  land  be  in  the  possession  of  a 
disseisor.'^  And  so  has  a  judgment  creditor  to  whom  the  premises 
have  been  set  off  by  extent  and  appraisement,  without  any  de- 
duction on  account  of  the  incumbrance.^  An  assignee  in  bank- 
ruptcy, or  a  trustee  appointed  by  the  court  or  under  an  assign- 
ment from  the  debtor,  may  also  redeem.* 

A  creditor  of  the  mortgagor  having  an  attachment  upon  the 
mortgaged  premises  may  bring  a  bill  in  equity  to  redeem  .^  The 
mortgagor  has  a  paramount  right  to  redeem,  and  if  he  bring  a 
bill  to  redeem  pending  a  bill  by  the  creditor  for  the  same  purpose, 
he  is  entitled  to  a  decree  for  redemption  in  preference ;  but  he 
will  not  be  allowed  in  this  manner  to  unreasonably  delay  the  re- 
demption. A  divorced  woman  who  has  attached  the  land  of  her 
former  husband  to  secure  his  payment  of  alimony  to  her  is  enti- 
tled, like  any  attaching  creditor,  to  redeem.^  . 

5.   The  Sum  payable  to  effect  Redemption. 

1070.  Payment  of  the  amount  due  on  the  mortgage  is  a 
necessary  condition  precedent  to  redemption.'^  If  the  holder  of 
the  mortgage  has  paid  prior  incumbrances  for  the  protection  of 
the  estate,  the  person  redeeming  is  required  to  add  the  amounts 
so  paid  to  the  mortgage  debt,  both  because  the  estate  is  benefited 
to  that  amount,  and  because  the  holder  of  the  mortgage  by  pay- 
ing such  incumbrance  is  subrogated  to  the  claim,  and  holds  it  as 
a  charge  upon  the  property  as  much  as  he  does  the  mortgage  to 
which  he  has  direct  title.  Where  a  prior  mortgage  upon  payment 
by  a  junior  mortgagee  was  discharged  of  record,  and  the  plaintiff 
afterward  acquired  his  title  while  the  defendant's  mortgage  was 
apparently  the  only  incumbrance,  the  defendant  was  allowed  the 
amount  so  paid  by  him,  inasmuch  as  the  wliole  amount  claimed 
by  him  was  less  than  the  amount  of  his  own  mortgage  as  it  ap- 
peared of  record.^ 

1  Coombs  V.  Carr,  55  Ind.  303.  before   or   after   execution,  may  redeem. 

2  Wellington   v.  Gale,   13   Mass.  488;     Gen.  Stat.  c.  205,  §§  8,  10,  11. 
Atkins  V.  Sawyer,  1  Pick.  (Mass.)  354.  6  Briggs  v.  Davi.s,  108  Mass.  322. 

3  White  V.  Bond,  16  Mass.  400.  ''  Fogal  v.  Pirro,  17  Abb.  (N.  Y.)  Pr. 
*  Francklyn  v.  Fern,  Barnard.  30.  113;  10  Bosw.  100;  Childs  v.  Childs,  10 
6  Chandler  v.  Dyer,  37  Vt.  345  ;  Bridge-     Ohio  St.  339  ;  Cowles  v.  Marble,  37  Mich. 

port  V.  Blinn,  43  Conn.  274.  158. 

In  New  Hampshire   it   is  provided  by         "  Davis  ?;.  Winn,  2  Allen  (Mass.),  111. 


statute  that  an  attaching  creditor,  either 


123 


§§  1071,  1072.]        REDEMPTION   OF   A   MORTGAGE. 

If  the  mortgage  be  for  anything  else  tlian  the  payment  of 
money,  the  condition  of  the  mortgage,  wliatever  it  be,  must  be 
fulfilled.  The  mortgagor  may  also  be  I'eqnired  to  perform  a  con- 
dition not  contained  in  the  mortgage ;  as  where  the  mortgagee 
conveyed  the  estate  to  the  mortgagor  by  a  deed  imposing  a  con 
dition,  and  took  back  a  purchase  money  mortgage,  the  mortgagor 
was  not  allowed  to  redeem  except  upon  performing  the  condition 
of  the  mortgage  and  that  of  the  deed  as  well.^ 

Redemption  fi'om  a  foreclosure  sale  within  the  time  allowed  by 
statute  in  several  states  may  be  made  by  paying  the  purchaser 
the  amount  of  his  bid  with  interest.  This  rule  applies  although 
the  purchaser  be  the  senior  mortgagee,  and  the  amount  of  his 
bid  be  less  than  the  amount  of  the  mortgage  debt,  and  redemp- 
tion is  sought  by  one  interested  in  the  equity  of  redemption  who 
was  made  a  party  to  the  foreclosure  suit.  Such  a  redemption 
is  not  a  redemption  from  the  mortgage,  but  a  redemption  from 
the  sale,  and  is  a  statutory  right.^ 

1071.  The  mortgagee  after  default  is  said  to  be  entitled  to 
notice  of  payment,  on  the  ground  that  redemption  being  a  mat- 
ter of  equity  only,  the  person  seeking  to  redeem  should  do  equity, 
by  allowing  a  reasonable  time  to  the  mortgagee  to  find  a  new  in- 
vestment for  his  money.  Accoi-ding  to  the  English  practice,  six 
months  is  the  proper  time  of  notice  ;  and  if  the  notice  be  not  given, 
six  month's  interest  is  paid  in  lieu  of  notice.^  Although  some 
notice  is  always  proper,  there  is  no  established  rule  or  custom  reg- 
ulating it  in  this  country.  Of  course,  if  the  mortgagee  demands 
his  money  no  notice  is  necessary  ;  nor  is  there  when  he  has  taken 
proceedings  to  enforce  his  claim,  which  amount  to  a  demand.* 

1072.  It  is  a  general  rule  that  a  mortgage  is  an  entire 
thing,  and  must  be  redeemed  entire,  and  that  the  mortgagee 
cannot  be  compelled  to  divide  his  debt  and  his  security.^  He 
performs  his  whole  duty  when  he  releases  the  entire  estate  upon 

1  Stone  i;.  Ellis,  9  Cush.  (Mass.)  95.  6  Palk  v.  Clinton,   12  Ves.  48;    Chol- 

2  Day  V.  Cole,  44  Iowa  4.52;  Tuttle  mondeley  v.  Clinton,  2  Jac.  &  W.  189; 
V.  Dewey,  44  Iowa,  30G,  distiii<riii8hed  on  Lamb  v.  Montague,  112  Mass.  352;  Mer- 
this  ground  from  Johnson  v.  Harmon,  19  ritt  v.  Hosmer,  II  Gray  (Mass.),  276; 
Iowa,  56.  Gliddon  v.  Andrews,  14  Ala.  733  ;  Knowles 

'  Fisher  Mort.  §  1272,  3d  ed. ;  Browne  v.  Rablin,  20  Iowa,  101  ;  White  v.  Hamp- 

V.   Lockhart,    10    Sim.   424;    Bartlett    v.  ton,  13  Iowa,  259  ;  Street  y.  Beal,  16  Iowa, 

Franklin,  15  W.  R.  1077.  68;  Lanning  v.  Smith,  1  Pars.  (Pa.)  Sel. 

*  Letts  V.  Hutchins,  L.  K.  13  Eq.  176.  Cas.  13. 

124 


THE  SUM  PAYABLE  TO  EFFECT  REDEMPTION.   [§§  1073,  1074. 

receiving  payment  of  the  whole  debt  in  one  payment.  The  fact 
that  the  mortgaged  premises  have  subsequently  become  divided, 
and  are  held  in  separate  parcels  by  different  owners,  does  not  con- 
cern him,  or  put  him  under  any  obligation  to  receive  payment  of 
his  mortgage  in  parts  from  the  different  owners.^ 

On  a  bill  to  redeem,  a  prior  conditional  judgment  on  a  writ  of 
entry  to  foreclose  is  conclusive  evidence  of  the  amount  then  due 
on  the  mortgage.^ 

The  rule  is  the  same,  although  two  separate  estates  are  mort- 
gaged by  distinct  deeds,  in  case  the  condition  of  each  is  to  pay 
one  and  the  same  mortgage  debt.  A  creditor  who  levies  an  execu- 
tion upon  one  estate  becomes  entitled  to  redeem  both  estates  upon 
payment  of  the  whole  mortgage  debt ;  but  he  cannot  be  permitted 
to  redeem  only  the  estate  levied  upon,  by  paying  such  proportion 
of  the  mortgage  debt  as  that  estate  bears  to  the  value  of  the 
whole  mortgaged  premises.  The  debt  being  one,  the  mortgage  is 
one  also.  The  unity  of  the  debt  makes  the  equity  of  redemp- 
tion, though  created  by  two  instruments,  one  and  indivisible.^ 

1073.  The  fact  that  the  mortgagee  has  proved  against  the 
insolvent  estate  of  a  deceased  mortgagor  the  mortgage  debt,  less 
the  full  estimated  value  of  the  land,  and  has  received  a  dividend 
on  that  amount,  does  not  preclude  his  claiming  the  full  amount 
remaining  due  on  the  mortgage  upon  a  bill  to  redeem  subsequently 
brought  against  him  by  one  who  has  purchased  the  equity  of  re- 
demption from  the  heirs  at  law.*  And  the  fact  that  the  mort- 
gagor has  obtained  a  discharge, '  under  bankruptcy  or  insolvency 
proceedings,  from  his  personal  liability  for  the  mortgage  debt, 
does  not  in  any  way  relieve  him  from  paying  the  debt  in  full  upon 
redemption,  whatever  may  be  the  value  of  the  property.^ 

1074.  Wher  the  mortgagee  has  foreclosed  a  part  of  the 
premises,  redemption  may  be  made  of  the  remaining  portion  of 
the  premises  upon  payment  of  a  part  of  the  debt.^  Land  subject 
to  a  mortgage  was  sold  with  full  covenants  of  warranty  in  two 

1  Johnson  v.  Candaj^e,  31  Me.  28;  ^  pranklin  v.  Gorham,  2  Day  (Conn.), 
Smith  V.  Kelley,  27  Me.  237  ;  MuUanphy      142. 

V.  Himpsou,  4  Mo.  319.  But  see  Morse  v.  *  Davis  v.  Winn,  2  Alien  (Mass.),  111. 
Sniitli,  83  HI.  396.  ^  Childs  v.  Childs,  10  Ohio  St.  339. 

2  Stevens  v.  Miner,  5  Gray  (Mass.),  '''  Dukes  r.  Turner,  44  Iowa,  575,  579; 
429,  note;  Sparhawk  v.  Wills,  5  Gray  distinguished  from  Street  v.  Beul,  16  Iowa, 
(Mass.),  423.  68,  where  the  mortgagee  retained  all  the 

property. 

125 


§  1075.]  REDEMPTION    OF   A    MORTGAGE. 

lots  to  dilTerent  persons  at  different  times,  and  the  mortgagee 
afterwards  entered  npon  botli  lots  for  foreclosure,  and  the  fore- 
closure became  absolute  as  to  the  lot  last  sold  ;  whereupon  the 
owner  of  the  lot  sold  first  brought  a  bill  to  redeem,  and  was  al- 
lowed to  do  so  upon  paying  the  balance  due  upon  the  mortgage 
debt,  after  deducting  the  full  value  of  the  other  lot  with  the 
buildings  upon  it  ;  and  it  was  regarded  as  immaterial  that  the 
buildings  were  erected  after  the  sale  by  the  mortgagor.^ 

But  this  rule  does  not  apply  where  the  mortgage  has  been  fore- 
closed without  making  all  of  the  several  owners  of  the  land  par- 
ties to  the  suit,  and  the  mortgagee  has  purchased  at  the  sale, 
because  he  has  by  such  proceedi"ng  and  purchase  voluntarily  sev- 
ered his  right,  and  obtained  an  indefeasible  title  to  part  of  the 
land  and  only  a  defeasible  title  to  another  part.  The  owner  not 
made  a  party  may  redeem  the  portion  owned  by  him  on  paying  a 
part  of  the  mortgaged  debt  bearing  such  a  proportion  to  the 
whole  as  the  value  of  his  land  bears  to  that  of  the  whole  mort- 
gaged premises.^  Two  persons  owning  land  in  common  made 
a  mortgage  of  it,  and  one  of  them  afterwards  mortgaged  his 
undivided  half  to  another  person.  The  first  mortgagee  obtained 
a  decree  of  foreclosure  and  sale  in  a  suit  in  which  the  second 
mortgagee  was  not  made  a  party.  It  was  held  that  the  second 
mortgagee,  not  being  bound  by  the  foreclosure,  might  redeem  an 
undivided  half  upon  payment  of  the  whole  mortgage,  less  one  half 
the  proceeds  of  the  foreclosure  sale  of  the  whole  land.^ 

1075.  One  who  redeems  after  a  foreclosure  sale  must  pay 
the  whole  amount  of  the  mortgage  debt,  although  the  land 
sold  for  a  less  sum.'*  The  grounds  for  this  rule  are  clearly  stated 
by  Mr.  Justice  Bradley  of  the  United  States  Supreme  Court : 
"  To  redeem  jjroperty  which  has  been  sold  under  a  mortgage  for 
less  than  the  mortgage  debt,  it  is  not  sufficient  to  tender  the 
amount  of  the  sale.  The  whole  mortgage  debt  must  be  tendered 
or  paid  into  court.  The  party  offering  to  redeem  proceeds  upon 
the  hypothesis  that,  as  to  him,  the  mortgage  has  never  been  fore- 

1  George  v.  Wood,  11  Allen  (Mass.),  *  Benedict  v.  Gilman,  4  Paige  (N.  Y.), 
41.  See  Fogal  v.  Pirro,  10  Bosw.  (N.  Y.)  58  ;  Raynor  v.  Selmes,  52  N.  Y.  579  ;  Rob- 
100.  inson  v.   Ryan,  25  N.  Y.  320;  Gage  v. 

2  Green  v.  Dixon,  9  Wis.  5.32.  Brewster,  31  N.  Y.  218;  Bradley  v.  Sny- 
'  Kirkham  v.  Dupont,  14  Cal.  559  ;  and     der,  14  111.  263  ;  Baker  v.  Pierson,  6  Mich. 

see  Frink  v.  Murphy,  21  Cal.  108;  Grat-  523;  Johnson  v.  Harmon,  19  Iowa,  56; 
tan  V.  Wiggins,  23  Cal. ^16.  Martin  v.  Fridley,  23  Minn.  13. 

126 


THE   SUM   PAYABLE   TO   EFFECT    REDEMPTION.  [§  1075. 

closed  and  is  still  in  existence.  Therefore  he  can  only  lift  it  by 
paying  it.  The  money  will  be  snbject  to  distribution  between  the 
mortgagee  and  the  purchaser  in  equitable  proportions,  so  as  to  re- 
imburse the  latter  his  purchase  money,  and  pay  the  former  the 
balance  of  his  debt."'  In  case  the  mortgagee  has  bid  in  the 
property  and  afterwards  sold  portions  of  it  to  others,  the  money 
paid  in  redemption  should  be  distributed  among  the  grantees  on 
the  basis  of  the  prices  paid  by  them  for  their  purchases,  and  in 
the  order  of  the  conveyances  to  them.^ 

A  junior  incumbrancer  who,  not  having  been  made  a  party  to  a 
foreclosure  of  a  prior  mortgage,  afterwards  redeems,  redeems  not 
the  premises,  strictly  speaking,  but  the  prior  incumbrance;  and  he 
is  entitled,  not  to  a  conveyance  of  the  premises,  but  to  an  assign- 
ment of  the  security .3  Therefore  if  the  prior  mortgagee  in  such 
case  has  become  the  purchaser  at  the  foreclosure  sale  and  has  thus 
acquired  the  equity  of  redemption  of  the  mortgaged  premises,  the 
junior  mortgagee  upon  redeeming  is  not  entitled  to  a  conveyance 
of  the  estate,  but  to  an  assignment  of  the  prior  mortgage  ;  where- 
upon the  prior  mortgagee,  as  owner  of  the  equity  of  redemption, 
may  if  he  choose  pay  the  amount  due  upon  the  junior  mortgage, 
redeeming  that.  The  decree  in  such  case  would  be  that  the 
junior  mortgagee  redeem  the  first  mortgage;  that  the  first  mort- 
gagee, as  owner  of  the  equity  of  redemption,  redeem  from  the 
junior  mortgage,  and  if  he  fail  to  do  so  that  the  premises  be  sold, 
and  out  of  the  proceeds  there  be  paid,  first,  the  prior  mortgage 
and  interest,  together  with  any  claim  for  repairs  the  first  mort- 
gagee may  have  made  upon  the  premises  while  in  possession ; 
second,  the  remainder  to  the  payment  of  the  second  mortgage  and 
interest  upon  it,  and  in  case  there  be  a  surplus,  this  to  be  paid  to 
the  first  mortgagee  as  owner  of  the  equity  of  redemption.* 

In  case  a  mortgagor  or  owner  of  the  equity  of  redemption  re- 
deem after  a  foreclosure  sale  to  which  he  was  not  made  a  party, 
and  the  purchaser  has  entered  into  possession,  the  amount  to  be 
paid  in  order  to  eifect  a  redemption  is  the  amount  of  the  mortgage 
debt  with  interest,  and  the  value  of  improvements  made  by  the 
purchaser,  less  the  rents  and  profits  received  by  him.^ 

1  Collins  V.  Kiggs,  14  Wall.  491.  dee  v.   Van  Anken,  3  Barb.  (N.  Y.)  534, 

2  Davis  V.   Duffie,  18  Abb.  (N.  Y.)  Pr.     537  ;  Renard  v.  Brown,  7  Neb.  449. 
360.  *  Renard  v.  Brown,  siqira. 

8  Fell  V.  Brown,  2  Bro.  C.  C.  276  ;  Far-         "  Barrett  v.  Blackman,  47  Iowa,  565. 

127 


§§  1076,  1077.]        REDEMPTION   OF   A   MORTGAGE. 

1076.  Under  special  circumstances  redemption  of  a  portion 
of  the  mortgaged  estate  may  be  made  without  paying  the  mort- 
gage debt,  or  even  e()ntri^)uting  towiuds  it  ;  us,  for  instance,  where 
the  owner  ol"  such  portion  held  under  a  warranty  deed,  and  the 
remaining  portion,  which  was  suflicient  to  satisfy  the  mortgage 
debt  in  full,  was  owned  by  the  assignee  of  the  mortgage. ^ 

Another  exception  is  made  in  favor  of  a  railway  or  other  cor- 
poration to  which  a  right  to  take  land  has  been  granted  by  a 
general  law  or  a  special  act.  In  such  case  the  corporation,  upon 
taking  the  land  necessary  for  its  right  of  way,  may  redeem  such 
part  of  a  mortgage  as  covers  the  land  so  taken  without  paying 
the  whole  mortgage  debt.^ 

When  a  mortgagee  enters  to  foreclose  for  a  breach  of  condition 
in  the  non-payment  of  interest,  and  the  mortgagor  brings  a  bill 
to  redeem,  pending  which  the  principal  becomes  due,  he  is  not 
entitled  to  a  decree  except  upon  paying  the  whole  sum  then  due, 
both  principal  and  interest.^ 

1077.  When  part  only  of  the  debt  is  due.  —  When  an  entry 
has  been  made  for  a  breach  of  condition  in  the  non-payment  of 
one  of  several  sums  secured  by  the  mortgage,  and  the  mortgagor 
wishes  to  redeem,  the  mortgagee  is  not  obliged  to  accept  the 
amounts  not  yet  due;  but  to  avoid  the  manifest  injustice  of  a 
foreclosure,  the  court  will  make  a  special  decree,  upon  payment  of 
the  sum  due,  declaring  that  the  proceedings  shall  stand  open,  leav- 
ing the  mortgagee  in  possession  until  the  further  sum  shall  be- 
come due.*  The  mortgagoi-,  on  paying  all  that  is  due,  and  thus 
performing  the  condition  so  far  as  he  is  able,  regains  the  title  of 
the  estate.  But  if  all  the  sums  have  become  payable  before  the 
mortgagor  brings  his  bill  to  redeem,  he  must  pay  the  whole  sum 
due  on  the  mortgage,  and  not  merely  the  sum  for  the  non-payment 
of  which  the  entry  was  made,  before  he  is  entitled  to  a  decree.^ 

Tiie  remedy  of  a  mortgagor,  or  of  one  claiming  under  him,  en- 
titled to  redemption,  is  by  a  bill  in  equity,  and  cannot  be  obtained 
in  a  suit  at  law.     His  estate  is  only  an  equitable  one.^     When, 

1  Bradley  v.  George,  2  Allen  (Mass.),  *  Saunders  v.  Frost,  5  Pick.  (Mass.) 
392.  2.59. 

2  Dow3  V.  Congdon,  16  How.  (N.  Y.)  5  Mann  v.  Richardson,  21  Pick.  (Mass.) 
Pr.  571  ;  North  Hudson  County  R.  R.  Co.  35.5  ;  Deming  v.  Comings,  11  N.  H.  474. 

V.  Booraem,  28  N.  J.  Eq.  450.  »  Pearce  v.  Savage,  45  Me.  90;  Smith 

8  Adams   v.   Brown,   7    Cush.  (Mass.)     v.  Anders,  21  Ala.  782. 
220. 

128 


THE   SUM   PAYABLE   TO   EFFECT    REDEMPTION.       [§§  1078,  1079. 

therefore,  the  mortgagor  seeks  to  regain  his  legal  estate  and  the 
possession  of  it  in  a  court  of  equity,  he  must  do  equity  to  the 
mortgagee,  by  paying  all  that  is  actually  due  upon  the  mortgage 
up  to  the  time  of  redemption  ;  so  that  if  the  mortgagee  has 
entered  for  a  breach  of  the  condition  by  non-payment  of  interest, 
and  the  principal  becomes  due  pending  the  mortgagor's  bill  to  re- 
deem, a  decree  for  redemption  can  only  be  had  upon  payment  of 
both  principal  and  intei'est.^ 

The  rule  is  the  same  when  foreclosure  is  effected  by  suit  in 
equity,  and  a  decree  is  obtained  upon  one  note  before  the  matu- 
rity of  others.  Redemption  may  be  had  by  the  payment  of  this 
note  before  completion  of  the  sale,  leaving  the  premises  subject 
to  the  notes  not  due.^  When  redemption  is  allowed  after  sale, 
and  the  holder  of  the  first  maturing  note  forecloses,  the  holder  of 
a  note  subsequently  maturing  may  redeem  from  the  foreclosure 
sale,  and  may  himself  foreclose  for  the  satisfaction  of  his  own 
note,  and  not  for  the  amount  paid  by  him  to  redeem  from  the 
fii'st  foreclosure.  The  holders  of  the  several  notes  have  the  same 
right  to  redeem  that  they  would  have  if  the  notes  were  secured 
by  separate  mortgages.^  In  the  same  way  if  the  plaintiff  has  two 
mortgages  upon  the  same  premises,  one  of  which  is  due  and  the 
other  not  due,  redemption  may  be  had  upon  payment  of  that  only 
which  is  due.* 

1078.  Sometimes  it  is  provided  in  the  mortgage  that  upon 
default  the  whole  sum  shall  become  due  immediately,  and  in 
such  case  the  rule  generally  is  that  the  premises  may  be  foreclosed 
or  sold  under  a  power,  for  the  payment  of  the  whole  debt,  and 
that  the  mortgagor  will  not  be  allowed  to  redeem  that  part  of  the 
debt  merely  upon  which  the  default  occurred,  and  to  have  the 
mortgage  continue  as  to  the  part  not  due.^  In  Illinois,  however, 
such  a  provision  has  been  regarded  in  the  nature  of  a  penalty,  and 
relief  against  it  is  given  in  equity  upon  payment  of  the  instalment 
due  with  interest,  and  costs  incurred  in  any  proceeding  to  sell 
under  a  power  or  in  a  foreclosure  suit.^ 

1079.  If  a  mortgage  be  given  to    secure    advances  to   be 

1  Adams  v.  Brown,  7  Cush.  (Mass.)  State  Bank  v.  Tweedy,  8  Blackf.  (Ind.) 
220  ;  Maun  v.  Richardson,  21  Pick.  (Mass.)     447  ;  Preston  v.  Hodgen,  50  III.  56. 

355.  4  Lanison  v.  Sutlierland,  13  Vt.  309. 

2  Hooker  v.  Reas,  18  Cal.  650.  ^  §  76,  and  chapter  xxv. 

8  Davis    V.    Langsdale,   41    Ind.   399;         «  xiernan  u.  Ilinman,  16  111.  400. 
VOL.  II.  9  129 


§  1080.]  REDEMPTION   OF   A   MORTGAGE. 

made  to  the  mortgagor,  and  further  advances  are  made  under 
an  oral  agreement  that  the  mortgage  sliall  secure  them,  neither 
the  mortgagor  nor  any  one  having  no  higher  equity  can  redeem 
■without  allowing  for  such  advances.^  A  mortgage  cannot,  by 
such  an  agreement,  be  continued  in  force  as  security  for  a  new  in- 
debtedness not  embraced  in  the  terms  of  its  condition  ;  yet  if  the 
mortgagee  has  advanced  money  to  the  mortgagor  on  the  strength 
of  such  an  agreement,  a  court  of  equity  will  not  aid  the  mort- 
gagor, or  any  one  who  has  purchased  from  him  with  knowledge  of 
the  facts,  in  obtaining  a  discharge  of  the  mortgage.^  If  a  mort- 
gagee holding  the  title  absolutely  make  unauthorized  advances  to 
other  persons  for  such  a  purpose  as  cutting  timber  upon  the  lands, 
the  mortgagor  can  redeem  without  paying  them ;  ^  but  if  he  make 
further  advances  to  the  mortgagor  or  on  his  ordei-,  these  should  be 
allowed  him  on  a  bill  to  redeem.* 

Where  a  mortgage  is  given  as  security  for  a  loan,  and  future 
advances  agreed  in  writing  to  be  made  on  the  performance  of  cer- 
tain conditions,  it  would  seem  that  the  mortgage  could  not  be  re- 
deemed by  payment  of  the  loan  actually  advanced,  so  long  as  the 
liability,  under  the  agreement  to  make  future  advances,  is  out- 
standing ;  and  it  was  so  decided  in  a  case  where  an  assignee  of 
the  equity  of  redemption,  who  sought  to  redeem  the  mortgage  on 
payment  of  the  loan  without  indemnifying  against  the  mort- 
gagee's agreement  to  make  future  advances,  had  acquired  his  title 
by  a  deed  in  which  the  land  was  described  as  subject  to  a  mort- 
gage of  $4,000,  the  whole  amount  of  the  loan  and  future  advances, 
and  the  obligation  for  future  advances  had  been  assigned  by  the 
mortgagor  to  a  person  who  claimed  that  the  mortgagee  should 
hold  tlie  mortgage  undischarged  as  security  for  him.^ 

1080.  A  mortgagee  who  has  paid  a  prior  mortgage  or  other 
incumbrance  upon  the  land  is  entitled  to  be  repaid  this  amount, 
as  well  as  his  own  mortgage,  when  the  mortgagor  comes  to  re- 
deem.^ In  addition  to  the  rights  the  mortgagee  had  before,  he 
is  subrogated  to  those  which  were  a  charge  upon  the  land  in  the 

1  §   360;     Stone   v.    Dane,    10    Allen     Allen  (Mass.),  62;  Brown  v.  Gaffney,  32 
(Mass.),  74 ;  Ogle  v.  Ship,  1  A.  K.  Marsh.     111.  251 . 

(Ky.)    287  ;     lleid    v.    Lansdale,     Hard.         ^  Kelly  v.  Falconer,  4.5  N.  Y.  42. 
(Ky.)  6.  i  Williamson  v.  Downs,  34  Miss.  402. 

2  Upton  V.  Nat.  Bank  of  So.  Reading,         ^  Cox  v.  Hoxie,  115  Mass.  120. 

120    Mass.    153;    Joslyn    v.    Wyman,  5         ^  See  §§357,  714;  Harper  v.  Ely,  70 

111.  581;  Mosier  v.  Norton,  83  111.  519; 

130 


THE   SUM   PAYABLE   TO   EFFECT    REDEMPTION.         [§  1080. 

hands  of  the  prior  incumbrancer  whom  he  has  paid,^  whether  such 
incumbrance  is  a  mortgage,  a  judgment,^  or  a  rent-charo-e.^  If 
the  outstanding  incumbrance  embraced  not  only  the  land  covered 
by  his  mortgage,  but  also  other  lands,  he  may  recover  from  the 
owner  of  such  other  lands  his  proportion  of  such  incumbrance.* 
In  the  same  way  the  mortgagee  is  protected  in  the  payment  of 
taxes  upon  the  mortgaged  premises,  although  the  mortgage  does 
not  provide  for  the  repayment  of  money  paid  by  the  mortgagee 
for  this  purpose  ;  ^  or  in  the  payment  of  any  valid  assessment  for 
public  improvement.^ 

Taxes  upon  the  mortgaged  premises  paid  by  a  mortgagee  very 
generally,  by  the  terms  of  the  mortgage,  would  become  an  ad- 
ditional lien  upon  the  premises  under  the  mortgage.  It  is  pro- 
vided by  statute  in  some  states  that  the  amount  so  paid  by  the 
mortgagee  shall  constitute  a  lien  and  be  collectible  with  the 
mortgage  debt.''  Such  a  provision,  however,  does  not  entitle  the 
mortgagee  to  add  to  the  mortgage  debt  in  this  way  the  amount 
paid  by  him  in  purchasing  at  a  tax  sale.  Such  a  purchase  is  not  a 
payment  of  taxes,  but  a  purchase  of  a  new  lien  upon  the  estate 
independent  of  his  mortgage.^ 

Although  a  mortgagee  has  the  right  to  pay  taxes  and  assess- 
ments upon  the  mortgaged  property,  and  collect  them  as  part  of 
the  mortgage  debt,  he  cannot,  by  bidding  in  the  property  at  a 
tax  sale,  deprive  the  mortgagor  of  his  right  to  redeem.^     A  mort- 

Page  V.  Foster,  7  N.  H.  392  ;  Weld  v.  Sa-  the  period  allowed  by  statute  for  redemp- 

bin,  20  N.  H.  533  ;  Arnold  v.  Foot,   7  B.  tioii  after  sale  has  redeemed  the  mortgaged 

Mon.  (Ky.)  66.  premises  from  a  tax  sale,  is  not  allowed  to 

1  Jenness  v.  Robinson,  10  N.  H.  215.  tack  the  sum  paid  for  such  redemption  to 

2  Silver  Lake  Bank  v.  North,  4  Johns,  the  sum  for  which  the  premises  were  sold 
(N.  Y.)  Ch.  370.  at  the  foreclosure  sale,  and  to  require  a 

8  Robinson  v.  Ryan,  25  N.  Y.  320,  second  mortgagee,  seeking- to  redeem,  to 

*  Lyman  v.  Little,  15  Vt.  576.  pay  the  amount  of  the  two  sums  as  a  pre- 

^  Kortright  v.  Cady,  23  Barb.  (N.  Y.)  requisite   to  his  redemption  ;  because  re- 

490;    Faure   v.  Winans,   Hopk.    (N.  Y.)  demption   is   allowed    by   Statute,   c.  81, 

Ch.  283  ;  Eagle  F.  Ins.  Co.  u.  Pell,  2  Edw.  §§  13-16,  upon  payment  of  the  amount  for 

(N.  Y.)  631  ;  Robinson  v.   Ryan,  25  N.  which  the  premises  were  sold,  except  that 

Y-  320.  a  creditor,  on  redeeming,  must  pay  liens 

6  Dale  V.  McEvcrs,  2  Cow.  (N.  Y.)  118;  prior  to  his  own  held  by  the  party  from 

Breevort  v.  Randolph,  7  How.  (N.  Y.)  Pr.  whom  redemption  i»  made.      Nopson  v. 

398.  Horton,  20  Minn.  268. 

^  New  York   Stat.    1855,  c.  427,  §  76;  »  Williams  v.  Townsend,  31  N.  Y.  411. 

Stat.  1870,  c.  280;   and    Mirmesota  Revi-  »  See  §  714;  Williams  v.  Townsend,  31 

sion,  1866,  c.  11,  §  152.    But  a  mortgagee,  N.  Y..411. 
who  after  his  foreclosure  sale  and  during 

131 


§§  1081,  1082.]   REDEMPTION  OF  A  MORTGAGE. 

gagor  is  also  allowed  to  redeem  against  a  mortgagee  who  has 
bought  in  an  outstanding  title,  under  an  arrangement  with  the 
mortgagor  that  it  is  to  be  held,  like  the  mortgage,  subject  to  re- 
demption, but  after  acquiring  it  insists  that  he  purchased  it  as  a 
stranger.^ 

1081.  A  subsequent  mortgagee  may  redeem  a  prior  mort- 
gage without  paying  any  other  claim,  such  as  the  amount  of  a 
judgment  the  prior  mortgagee  has  obtained  against  the  mort- 
gagor.2  ^g  against  a  subsequent  incumbrancer,  any  other  debt 
due  from  the  mortgagor,  not  a  charge  upon  the  mortgaged  prem- 
ises, cannot  be  tacked  to  the  mortgage.^  Nor  can  the  mortgagee, 
by  purchasing  a  mortgage  upon  other  land  of  the  mortgagor,  com- 
pel him  to  redeem  both  mortgages,  if  either.*  The  mortgagee 
cannot  require  the  payment  of  any  other  debt,  not  a  charge  upon 
the  premises,  as  a  condition  of  a  redemption.^ 

When  a  junior  mortgagee  seeks  to  redeem  a  prior  mortgage,  he 
is  entitled  to  a  decree  upon  paying  the  sum  due  upon  that  mort- 
gage, although  the  holder  of  the  prior  mortgage  has  another 
claim  upon  the  mortgaged  property  which  is  subsequent  to  the 
plaintiil's  mortgage.  The  defendant  may,  however,  file  a  cross- 
bill to  redeem  the  plaintiff's  mortgage,  by  virtue  of  the  subsequent 
claim,  and  in  that  case  the  plaintiff  would  not  succeed  in  redeem- 
ing unless  he  paid  both  the  liens  held  by  the  defendant.*^ 

1082.  The  English  doctrine  of  tacking,  whereby  a  junior 
mortgagee,  by  purchasing  the  first  mortgage,  was  allowed  to 
squeeze  out  an  intermediate  mortgage  or  judgment  lien,  never 
gained  any  general  recognition  in  this  country,  because  at  an  early 
day  registry  laws  were  adopted,  and  under  these  priority  of  reg- 
istry gave  priority  of  right.  Tacking  was  only  allowed  when  the 
last  mortgagee  took  his  mortgage  without  notice  of  the  interven- 
ing incumbrance.  Under  laws,  therefore,  making  the  recording 
of  the  deed  notice  to  all  who  might  come  after,  there  was  no 
chance  for  the  application  of  this  doctrine ;  and  this  was  so  de- 
clared  in  several   early    cases.^     In    England   this   unreasonable 

1  Moore  V.  Titman,  44  111.  367.  *  Cleaveland  v.  Clark,  Brayt.  ( Vt.)  166. 

2  McKinstry  v.  Mervin,  3  Johns.  (N.  5  Burnett  v.  Denniston,  5  Johns.  (N. 
Y.)  Ch.  466;   Pardee  v.   Van   Anken,  3     Y.)  Ch.  35. 

Barb.  (N.  Y.)  .5.34  ;  Jenkins  v.  Continental  «  Green  v.  Tanner,  8  Met.  (Mass.)  411 ; 

Ins.  Co.  12  How.  (N.  Y.)  Pr.  66.  Palmer;;.  Fowley, 5  Gray  (Mass.), 545, 548. 

3  Burnet  v.  Denniston,  5  Johns.  (N.  '  Grant  y.  U.  S.  Bank,  1  Caines  (N.  Y.) 
Y.)Ch.  35.  Cas.  112  (1804).     See  §  569. 

132 


THE  SUM  PAYABLE  TO  EFFECT  REDEMPTION.    [§  1083. 

doctrine,  first  established  through  the  influence  of  Sir  Matthew 
Hale,^  has  now  at  last  been  abolished. 

Neither  can  the  first  mortgagee,  by  purchasing  the  equity  of 
redemption,  squeeze  out  an  intervening  mortgage ;  but  the  holder 
of  it  may  still  redeem  the  first  mortgage,  and  compel  the  holder 
of  the  equity  of  redemption  to  redeem  or  be  foreclosed.^ 

1083.  Consolidating  mortgages.  —  The  doctrine  in  England 
is,  that  one  holding  several  mortgages  made  by  the  same  mort- 
gagor, tliough  of  different  dates  and  covering  different  parcels  of 
land,  may  consolidate  them  in  one  suit  for  foreclosure,  and  neither 
the  mortgagor  nor  a  purchaser  of  the  equity  of  redemption  of  a 
parcel  covered  by  one  mortgage  will  be  allowed  to  redeem  this 
parcel,  without  also  redeeming  all  other  mortgages  by  the  same 
mortgagor  held  by  the  plaintiff  and  included  in  his  suit,  whether  he 
acquired  them  before  or  since  the  purchase  ;  and  whether  the  pur- 
chaser had  notice  of  the  existence  of  the  other  mortgages  or  not. 
A  mortgagee  of  a  lot  covered  by  one  of  such  mortgages  stands  in 
the  same  position  as  regards  redemption  as  a  purchaser  for  value.^ 

In  like  manner,  in  a  few  cases  in  this  country  it  has  been  held 
that  a  mortgagor  going  into  equity  to  redeem  is  bound  to  do 
equity,  and  on  that  ground  to  pay  another  debt  unsecured  which 
he  owes  to  the  holder  of  the  mortgage.'^  But  the  prevailing  doc- 
trine is,  that  a  mortgagor  may  always  redeem  by  paying  the  spe- 
cific debt  secured  by  the  mortgage,  together  with  such  prior  liens 
as  the  mortgagee  may  have  been  compelled  to  pay  for  the  protec- 
tion of  the  mortgage. 

It  is  said  that  when  a  mortgagor  goes  into  equity  to  redeem  he 
must  do  equity,  and  therefore  pay  not  only  the  mortgage  debt, 
but  as  well  all  other  debts  due  from  him  to  the  mortgagee.  This 
same  principle  has  been  applied  when  the  mortgagor  has  sought 
the  recovery  of  the  surplus  proceeds  of  a  foreclosure  sale  of  the 
premises.  But  where,  on  the  other  hand,  the  mortgagee  seeks  a 
foreclosure,  the  mortgagor  is  permitted  to  redeem  upon  payment 
of  the  mortgage  debt  alone. ^ 

1  Marsh  v.  Lee,  2  Vent.  337  ;  1  Ch.  Cu.  *  Scripture  v.  Johnson,  3  Conn.  211  ; 
162;  and  see  Brace  v.  Duchess  of  Marl-  Powis  v.  Corbet,  3  Atk.  556;  Walling  v. 
borough,  2  P.  Wms.  491.  Aikin,  I  McMull.  (S.  C.)  Ch.  1  ;  Bank  of 

2  Thompson  v.  Chandler,  7  Me.  377.  S.  C.  v.  Rose,  1  Strobh.  (S.  C.)  Eq.  257. 
8  Bcevor  v.  Luck,  L.  R.  4  Kq.  537  ;  Tas"         5  Anthony  v.  Anthony,  23  Ark.  479. 

sell  V.  Smith,  2  De  G.  &  J.  713  ;  Vint  v. 
Padget,  lb.  611. 

133 


§§  1084-1086.]        REDEMPTION    OF   A    MORTGAGE. 

1084.  Costs  of  previous  foreclosure.  —  Upon  redemption 
after  foreclosure  by  one  having  an  interest  in  the  estate  wlio  was 
not  made  a  party  to  the  suit,  the  costs  of  the  previous  foreclosure 
cannot  be  added  to  the  principal  and  interest  of  the  mortgage 
debt  in  making  up  the  amount  to  be  paid  ;  ^  nor  can  the  attorney's 
fees  of  the  mortgagee  in  the  foreclosure  suit  be  added. ^ 

But  expenses  necessarily  incurred  by  a  mortgagee  in  redeeming 
a  prior  incumbrance  upon  the  property  are  justly  chargeable  to 
the  owner  of  the  estate  upon  redemption.^ 

In  redeeming  from  one  whom  the  mortgagor  has  induced  to 
purchase  the  mortgage,  upon  his  promise  in  writing  to  pay  the 
whole  sum  advanced  with  interest,  an  assignee  of  the  equity  of 
redemption  with  notice  must  pay  all  that  the  mortgagor  must 
have  paid.* 

1085.  Over-pa37XQent  to  prevent  foreclosure.  —  If  a  mort- 
gagor is  compelled  to  pay  to  a  mortgagee  in  possession  more  than 
is  legally  due,  in  order  to  redeem  and  prevent  a  foreclosure,  the 
payment  is  such  a  compulsory  one  as  entitles  the  mortgagor  to 
recover  the  amount  over-paid  in  an  action  for  money  had  and  re- 
ceived.^ In  such  action  the  same  legal  and  equitable  rules  are 
applied  which  are  applicable  to  a  settlement  of  the  mortgagee's 
account  upon  a  bill  in  equity  to  redeem  ;  and  whether  the  mort- 
gagee's charges  are  reasonable  is  not  an  open  question  to  be  left 
to  the  jury,  but  a  question  of  law  to  be  decided  by  the  court,  ac- 
cording to  the  facts  and  circumstances  found  by  the  jury. 

In  like  manner  where  redemption  is  allowed  for  a  certain  time 
after  a  foreclosure  sale,  the  person  entitled  to  redeem  may  prop- 
erly pay  under  protest  in  order  to  save  the  estate,  whatever  the 
officer  may  demand,  though  it  be  too  much,  and  recover  the  ex- 
cess of  the  payment  afterwards.^ 

1086.  A  mortgagee  cannot  be  compelled  to  assign  the  mort- 
gage upon  receiving  payment  of  it  ;  he  can  only  be  required  to 
release  or  discharge  it.^     If  the  person  who  redeems  is  interested 

^  Gage  V.  Brewster,  31  N.  Y.  218,  re-  *  Holbrook  v.  Worcester  Bank,  2  Cur- 
versing  30  Barb.  387  ;  Moore  v.  Cord,  14  tis,  244. 

Wis.  213;    Benedict  v.  Oilman,  4  Paige  *  Close  v.  Phipps,  7  M.  &  G.  586;  Fra- 

(N.  Y.),  58;  Vroom  v.  Ditmas,  4  lb.  526.  ser  v.  Pendlebiiry,  10  W.  R.  104  ;   Caze- 

2  Bonduranti;.  Taylor,  3  G.  Gr.  (Iowa)  nove  r.  Cutler,  4  Met.  (Mass.)  246;  and 
561.  see  Farwell  v.  Sturdivant,37  Me.  308. 

3  Miller  v.  Whittier,  36  Me.  577.  ^  McMillan  v.  Richards,  9  Cal.  365. 

'  See  §  792;   Lamb   v.  Montague,  112 

134 


THE   SUM   PAYABLE   TO   EFFECT   REDEMPTION.  [§  1087. 

in  only  a  portion  of  the  property,  he  becomes  in  equity  an  assignee 
of  the  mortgage  for  the  purpose  of  compelling  a  contribution  from 
those  who  own  the  other  portions  of  the  equity  of  redemption, 
without  any  formal  transfer  of  the  mortgage  to  him.  He  is  sub- 
rogated to  the  rights  of  the  mortgagee  by  operation  of  law.  Hav- 
ing assumed  for  his  own  protection  more  than  his  share  of  the 
common  burden,  he  is  fully  protected  under  this  settled  rule  of 
equity,  and  without  any  act  on  the  part  of  the  mortgagee  may 
enforce  his  equitable  rights  to  contribution  against  the  other 
parties  in  interest.  He  can  call  upon  them  to  pay  their  shares 
of  the  incumbrance,  or  to  be  foreclosed  of  all  right  of  redemp- 
tion.^ 

In  like  manner  when  a  junior  mortgagor  or  other  incumbrancer 
redeems  from  a  prior  mortgage,  although  he  has  no  right  to  de- 
mand a  written  assignment  of  the  mortgage,  he  has  the  right  to 
have  the  mortgage  delivered  to  him  uncancelled,  and  this  in 
equity  is  a  complete  assignment  of  it.  Such  redemption  puts  him 
in  the  place  of  the  mortgagee,  and  gives  him  all  the  mortgagee's 
rights  against  the  mortgagor.^  He  thereupon  becomes  entitled 
to  hold  it  as  an  existing  mortgage,  until  the  owner  redeems  or  he 
himself  forecloses  it. 

1087.  In  New  York,  however,  it  is  an  established  doctrine 
that  a  mortgagee  may  be  compelled,  upon  payment  of  his  mort- 
gage, to  make  an  assignment  of  it,  when  this  will  afford  a  more 
complete  protection  to  the  person  who  has  paid  the  money,  he 
not  being  primarily  liable  to  pay  it,  but  is,  for  instance,  a  surety 
or  a  junior  incumbrancer.^  This  right  to  an  assignment  rests 
wholly  upon  the  assumption  that  the  person  redeeming  cannot 
otherwise  be  protected.  In  other  courts  protection  is  given  in  all 
cases  upon  the  principle  of  subrogation  by  law.  The  mortgagee 
is  not  allowed  to  discharge  the  mortgage  of  record,  but  is  required 
to  deliver  it,  with  the  note  or  bond  which  accompanies  it,  to  the 

Mass.  352 ;  Lamson  v.  Drake,  105  Mass.         3  Johnson   v.   Zink,   52  Barb.   (N.  Y.) 

564;  Hamilton  u.  Dobbs,  19  N.J.  Eq.  227;  396;  Pardee  v.   Van  Anken,  3  lb.  534; 

Bigelow  V.  Cassedy,  26  N.  J.  Eq.  557.  Tompkins  v.  Seely,  29  lb.  212  ;  McLean 

1  Young  V.  Williams,  17  Conn.  393;  v.  Tompkins,  18  Abb.  (N.  Y.)  Pr.  24; 
Averill  v.  Taylor,  8  N.  Y.  44  ;  Brainard  v.  Jenkins  v.  Continental  Ins.  Co.  12  IIow. 
Cooper,  10  N.  Y.  356 ;  Burnet  v.  Dennis-  (N.  Y.)  Pr.  66 ;  Dauchy  v.  Bennett,  7  lb. 
ton,  5  Johns.  (N.  Y.)  Ch.  35  ;  McLean  v.  375;  Ellsworth  v.  Lockwood,  42  N.  Y. 
Towle,  3  Sandf.  (N.  Y.)  Ch.  119.  89.     See  §  792. 

2  Hamilton    v.    Dobbs,    19   N.   J.   Eq. 
227. 

135 


§  1088.]  REDEMPTION  OF  A  MORTGAGE. 

person  redeeming,  who  may  enforce  the  obligations  if  necessary  in 
the  name  of  the  mortgagee.  An  assignment  of  the  mortgage  and 
debt  assumes  a  sale  of  them,  which  a  mortgagee  cannot  be  com- 
pelled to  make.  Subrogation,  on  the  other  hand,  assumes  the 
payment  of  the  debt  by  one  not  liable  primarily  to  pay  it ;  but 
by  paying  it  the  law  says  that  the  person  making  the  payment 
steps  into  the  place  and  rights  of  the  mortgagee  who  receives  the 
payment.  But  to  enable  a  subsequent  mortgagee  to  compel  an 
assio-nment  to  himself  of  a  prior  mortgage,  there  must  be  some 
equitable  reason  for  it,  and  the  mere  fact  that  he  is  a  subsequent 
mortgagee  does  not  constitute  such  equitable  reason.^ 

Application  for  an  assignment  may  be  made  in  the  foreclosure 
proceedings,  if  such  are  pending,  accompanied  by  an  offer  to  pay 
whatever  sum  is  due  upon  the  mortgage  and  for  costs.^  If  no 
such  suit  is  pending,  and  the  mortgagee  declines  a  tender  of  tlie 
amount  due,  accompanied  by  a  demand  for  an  assignment,  he 
may  bring  a  bill  to  redeem  in  the  usual  form,  except  in  asking  for 
an  assignment  of  the  mortgage  to  himself  instead  of  a  discharge 
of  it.3 

1088.  A  tender  made  after  breach  of  the  condition,  except 
in  those  states  where  the  common  law  doctrine  has  been  changed, 
does  not  reinvest  the  mortgagor  with  the  legal  estate ;  *  and  the 
effect  of  it  generally  is  only  to  allow  a  suit  to  be  brought  for  re- 
demption within  a  certain  time  as  provided  by  statute  in  several 
states,  or  to  throw  the  costs  of  the  suit  upon  the  mortgagee  in 
case  the  tender  was  of  a  sufficient  amount  to  fully  satisfy  his 
claim.^  Of  course  the  acceptance  of  the  whole  sum  tendered 
operates  as  a  waiver  of  the  foreclosure,  and  a  restoration  of  the 
mortgagor's  title.^ 

A  tender,  to  be  good,  must  be  of  the  whole  amount  due.'^  It 
must  be  made  to  the  mortgagee  or  his  assignee.^  If  an  assign- 
ment has  been  made  but  not  recorded,  it  is  the  duty  of  the  per- 
son who  wishes  to  make  a  tender  to  seek  out  the  assignee.^     But 

1  Frost  V.  Yonkers  Sav.  Bank,  8  Hun  782  ;  Patchin  v.  Pierce,  12  Wend.  (N.  Y.) 
(N.Y.),  26;  Vandercook  v.  Cohoes  Sav.     61. 

Inst.   5  Hun  (N.  Y.),  641;    12   lb.  641;  ^  Lamson  v.  Drake,  105  Mass.  564,568. 

Ellsworth  V.  Lockwood,  42  N.  Y.  89.  ^  Patchin  v.  Pierce,  supra. 

2  Hornby  i;.  Cramer,  12  How.  (N.  Y.)  ^  Graham  v.  Linden,  50  N.  Y.  547  ; 
Pr.  490.  Litt.  §§  334,  337. 

»  See  Smith  v.  Green,  1  Coll.  555.  8  Dorkray  v.  Noble,  8  Me.  278. 

*  See  §  892;  Smith  v.  Anders,  21  Ala.         »  Mitchell  v.  Burnham,  44  Me.  286. 

136 


THE   SUM   PAYABLE   TO  EFFECT   REDEMPTION.  [§  1088. 

a  tender  to  the  legal  holder  of  the  mortgage  of  the  whole  amount 
due  on  it  is  good,  although  only  a  portion  of  it  belongs  to  him, 
and  the  balance  to  some  other  person  for  whom  he  holds  the 
mortgage  in  trust. ^ 

A  tender  must  be  made  unconditionally .^  An  offer  to  pay  if 
the  defendant  "  would  reassign  and  transfer  "  to  him  is  not  suf- 
ficient ;  3  nor  is  one  conditioned  upon  the  execution  of  a  quitclaim 
deed  in  addition  to  a  discharge.*  As  to  the  place  of  tender,  if 
no  place  of  payment  is  mentioned  in  the  mortgage  deed,  and 
none  has  been  agreed  upon  by  the  parties,  the  mortgagor  must 
seek  the  mortgagee  and  make  a  personal  tender.^  The  mortgagee 
should  be  sought  at  his  place  of  business,  though  under  many 
circumstances  a  tender  at  his  house  is  proper.^ 

A  tender  of  bank  notes  or  bills  which  are  not  made  a  legal  ten- 
der is  sufficient,  if  not  objected  to  on  that  account ;  ^  and  in  like 
manner  a  tender  of  a  larger  sum  than  is  due,  whereby  the  cred- 
itor is  obliged  to  make  change  or  to  return  a  part,  is  good  if  no 
objection  is  made.^  The  money  should  be  actually  produced,  for 
though  the  creditor  may  refuse  at  first,  the  sight  of  the  money,  it 
is  said,  may  tempt  him  to  take  it.^  But  this  may  be  waived  by 
the  mortgagee,  as  by  requesting  the  mortgagor  not  to  trouble 
himself  to  go  to  another  part  of  the  house  for  it ;  ^'^  or  by  refusing 
to  look  at  it."  A  tender  of  money  in  bags  is  good,  if  the  money 
is  actually  contained  in  them;!^  ^^^^  go  of  notes  twisted  in  a  roll.^^ 
A  mistake  in  the  value  of  a  coin  included  in  the  tender  may  be 
relieved  against.^* 

1  Cliff  V.  Wadsworth,  2  Y.  &  C.  C.  C.  »  Black  v.  Smith,  Peake,  88.  See  §  901. 
598  ;  Graham  v.  Linden,  50  N.  Y.  547.  »  Douglas    v.   Patrick,   3    T.   R.   683 ; 

2  Evans  v.  Judkins,  4  Camp.  156;  Thomas  ?;.  Evans,  10  East,  101  ;  Dickin- 
Glasscott   V.   Day,    5  Esp.   48 ;    Cole   v.  son  v.  Shee,  4  Esp.  67. 

Blake,  Peake,  179;  Loring  v.  Cooke,  3  ^°  Douglas  v.  Patrick,  supra;  Harding 
Pick.  (Mass.)  48.     See  §  900.  y.  Davies,  2  Car.  &  P.  77. 

*  Ferguson  v.    Wagner,  41   Ind.  450;         '^  Fellows  v.  Dow,  sK/jra. 

Wendell   v.  New  Hampshire  Bank,  9  N.  ^^  Wadis's  case,  5  Rep.  115  a.     See  con - 

H.  404.  flicting  case,  Sucklinge  v.  Coney,  Noy,  74. 

*  Dodge  V.  Brewer,  31  Mich.  227.  ^*  Alexander  v.  Brown,  1  Car.  &  P.  288. 
s  See  §  897 ;    Gyles  v.  Hall,  2  P.  Wms.  For    tenders   held    bad,   see   Harding  v. 

378;  Sharpnell  v.  Blake,  2  Eq.  Cas.  Abr.  Davies,  2  Car.  &  P.  77;   Leatherdale  v. 

604.  Swcepstonc,  3  lb.  342  ;  Glasscott  v.  Day, 

«  Manning  v.  Burger,  1  Ch.  Ca.  28.  5  Esp.  48;    Thomas  v.  Evans,    10   East, 

T  Austen  v.  Dodwell,  1   Eq.    Ca.    Abr.  101. 

318;    Lockyer  v.  Jones,  Peake,  180,  n. ;  "  Abbott  r.  Banfield,  43  N.  H.  152. 
Biddulph  V.  St.  John,  2  Sch.  &  Lef.   521  ; 

Fellows  u.  Dow,  58  N.  H.  21.  137 


§  1080.]  REDEMPTION  OF  A  MORTGAGE. 

The  tender  must  be  made  at  a  proper  time.  If  a  certain 
hour  be  fixed  for  the  payment  of  the  money,  the  mortgagor's  at- 
tendance at  any  time  before  the  beginning  of  the  next  hour  is 
suiiioient.  In  a  case  where  the  hour  was  fixed  at  three  o'clock, 
and  the  mortgagor  attended  before  four  o'clock  to  make  pay- 
ment, he  was  not  bound  to  pay  interest  afterwards,  although  the 
mortgagee  had  waited  from  a  quarter  before  three  till  a  quarter 
after  that  hour.^ 

If  the  mortgagor  requests  the  rendering  of  an  account  of  the 
amount  due,  the  request  must  be  so  made  in  respect  to  time  and 
place  as  to  give  the  mortgagee  an  opportunity  to  render  an  ac- 
count.^  A  request  made  upon  the  mortgagee  when  absent  from 
home  in  another  town,  and  a  reply  by  him  that  he  would  give  all 
the  information  in  his  power  if  the  mortgagor  would  call  upon 
him  at  home,  do 'not  amount  to  a  demand  for  an  account  and  a 
refusal  to  render  it.^ 

When  on  the  day  before  the  expiration  of  the  time  for  redeem- 
ing land  from  a  mortgage,  a  person  in  behalf  of  the  mortgagor 
called  upon  the  mortgagee  and  asked  him  to  execute  a  quitclaim 
deed  and  receive  the  money  due  on  the  mortgage,  but  he  declined 
to  do  so,  and  said  he  wished  to  see  the  mortgagor,  whom  he 
would  meet  in  two  days,  and  then  would  take  no  advantage  of 
the  expiration  of  the  time,  it  was  held  that  the  tender  was  suffi- 
cient to  entitle  the  mortgagor  to  redeem  if  the  tender  was  made 
by  his  authority.*  Oral  authority  from  the  mortgagor,  or  a  sub- 
sequent ratification  by  him,  is  sufficient.^ 

6.   Contribution  to  redeem. 

1089.  In  general.  —  When  the  estates  of  two  persons  are  sub- 
ject to  a  common  mortgage,  which  one  of  them  pays  for  the  ben- 
efit of  both,  he  has  a  right  to  hold  the  whole  estate  thus  re- 
deemed, until  the  other  party  shall  pay  an  equitable  proportion 
of  the  sum  paid  to  redeem ;  or  the  party  who  has  paid  the  incum- 
brance may  in  equity  enforce  contribution  from  the  other.^  But 
to  entitle  one  to  contribution  from  the  other,  their  equities  must 

1  See   §  898 ;     Knox   v.   Simmonds,   4         *  Walden  v.  Brown,  12  Gray  (Mass.), 
Bro.  C.  C.  4.S3.  102. 

2  Willard  v.  Fi.ske,  2  Pick.  (Mass.)  540;         ^  Walden  v.  Brown,  supra. 

Putnam  v.  Putnam,  13  lb.  129.  6  Chase  v.  Woodbury,  6  Gush.  (Mass.J 

3  Fay  f.  Valentine,  2  Pick.  (Mass.)  546.     143. 

188 


CONTRIBUTION   TO   REDEEM.  [§  1090. 

be  equal.  If  there  was  any  obligation  resting  upon  the  person 
who  paid  the  incumbrance  to  discharge  it  as  a  debt  of  his  own, 
he  can  of  course  claim  nothing  from  the  other,  although  the  latter 
was  benefited  by  the  payment ;  and  on  the  other  hand,  if  it  was 
the  duty  of  latter  to  pay  the  whole  incumbrance,  the  payment 
of  it  by  the  former  gives  him,  not  a  right  to  contribution,  but  a 
right  to  hold  the  moi'tgage  as  a  subsisting  security  against  the 
other  part-owner  ;  in  other  words,  he  is  subrogated  to  the  posi- 
tion of  the  mortgagee.  The  right  of  subrogation  has  already 
been  spoken  of,  and  it  remains  to  be  considered  under  what  cir- 
cumstances the  right  to  contribution  arises. 

The  test  by  which  the  right  to  contribution  is  always  deter- 
mined is  found  in  the  inquiry  whether  the  equities  of  the  parties 
are  equal :  if  they  are  equal  the  right  to  contribution  exists  ;  but 
if  they  are  not  equal  it  does  not  exist.  A  mortgagor  who  has 
sold  a  portion  of  the  land  covered  by  the  mortgage  by  a  warranty 
deed  cannot  claim  contribution  of  the  purchaser,  because  he  is 
himself  liable  for  the  whole  debt.  Neither  can  a  subsequent  pur- 
chaser call  upon  a  prior  one  for  contribution,  because  such  subse- 
quent purchaser  acquires  only  the  rights  the  mortgagor  then  had, 
and  therefore  the  equities  of  the  two  purchasers  are  not  equal. ^ 

When  a  mortgage  is  foreclosed  by  a  suit  in  equity  or  an  equi- 
table suit  under  the  codes  adopted  in  many  states,  the  equities  of 
purchasers  of  portions  of  the  mortgaged  estate  are  protected  by 
a  direction  in  the  decree  of  sale  that  the  parcels  be  sold  in  the 
inverse  order  of  alienation.  Where  the  foreclosure  is  effected  in 
other  ways,  as,  for  instance,  by  sale  under  a  power,  by  entry  and 
possession,  by  a  writ  of  entry  or  other  suit  at  law,  the  remedy 
of  one  whose  estate  is  not  primarily  liable  for  the  satisfaction  of 
the  mortgage  is  to  redeem  it,  and  then  enforce  it  against  that 
part  of  the  mortgaged  premises  which  in  equity  should  bear  the 
burden. 

1090.  The  general  rule,  therefore,  as  to  contribution  is,  that 
where  the  estates  of  two  or  more  persons  are  subject  to  one  com- 
mon incumbrance,  which  one  pays  for  the  benefit  of  all,  he  is  en- 
titled to  hold  the  whole  estate  which  he  has  tlius  redeemed  until 
the  others  pay  their  proportionate  and  equitable  share  of  the  sum 
80  paid  for  the  common  benefit  of  all.^     But  to  entitle  the  several 

^  Kilborn  v.  Robbins,  8  Allen  (Mass.),         2  Gibson   v.   Crehore,   5   Pick.  (Mass.) 
466.     '  146  ;  Alien  v.  Clark,  17  lb.  47,  per  Wilde, 

139 


§  1090.]  REDEMPTION   OF   A   MORTGAGE. 

owners  to  a  pro  rata  contribution  they  must  stand  upon  the  same 
equal  ground.  If  a  mortgagor  convey  the  mortgaged  land  in  sep- 
arate parcels  by  warranty  deeds,  and  afterwards  pay  the  mort- 
gage debt,  he  is  not  entitled  to  contribution  from  the  purchasers, 
because  he  has  merely  paid  his  own  debt,  which  his  covenants 
bound  him  to  pay.  And  so  any  one  purchasing  a  pai't,  while  the 
mortcrauor  himself  remains  owner  of  another  part,  has  the  right  to 
have  the  part  so  remaining  in  his  grantor  first  applied  to  satisfy 
the  incumbrance.  The  heir  of  the  mortgagor  is  under  the  same 
obligation.  In  Harbert's  case  it  is  said  that  if  one  is  seised  of 
three  acres  under  an  incumbrance,  and  enfeoffs  A.  of  one  acre, 
and  B.  of  another,  and  the  third  acre  descends  to  the  heir,  who 
discharges  the  incumbrance,  he  shall  not  have  contribution,  "  for 
he  sits  in  the  seat  of  his  ancestor."  ^ 

If  the  owner  make  simultaneous  deeds  of  undivided  moieties  of 
the  incumbered  estate,  the  grantees  stand  upon  an  equal  footing 
in  relation  to  the  incumbrance.^ 

But  if  one  of  these  grantees  neglect  to  put  his  deed  upon  record, 
and  the  other  grantee,  after  recording  his  deed,  sells  his  moiety 
to  one  who  has  no  notice  of  the  conveyance  of  the  other's  moiety, 
this  last  purchaser  stands  in  the  same  position  as  if  the  other 
moiety  still  remained  in  the  original  owner,  as  in  fact  the  record 
indicates ;  and  therefore  such  purchaser  has  the  right  to  have 
the  moiety  so  remaining  first  applied  to  satisfy  the  incumbrance. 
The  grantee  who  fails  to  put  his  deed  on  record -enables  the  other 
grantee  to  make  an  apparently  good  title  to  the  third  person  pur- 
chasing without  notice  of  the  incumbrance  of  the  simultaneous 
deed.'^ 

Where  several  persons  own  distinct  parcels  of  the  mortgaged 
premises,  contribution  should  be  made  in  proportion  to  the  present 
value  of  the  several  parcels,  unaffected  by  improvements  made  by 
either  of  them.^ 

J.      "  The  foundation  of  contribution  is  a  *  Bailey  v.  Myrick,  50  Me.  171 ;    Tay- 

principle  of  justice  and  equity  ;  and  when  lor   v.   Bassett,   3   N.  H.  294  ;    Aiken  v. 

there  is  equal  equity,  and  there  is  an  in-  Gale,  37  N.  H.  501  ;  Sawyer  v.  Lyon,  10 

cumbrance  on  land  bclonj^ing  to  different  Johns.  (N.  Y.)  32  ;  Stevens  v.  Cooper,  1 

parties,  they  ouf^ht  each  to  contribute  to-  Johns.    (N.   Y.)    Ch.   425 ;     Johnson    v. 

wards  removing  it."  White,  11  Barb.  (N.  Y.)    194;    Bates  v. 

1  3  Co.  11  6.  Ruddick,  2  Iowa,  423;  Beall  v.  Barclay, 

2  See  Adams  v.  Smilie,  50  Vt.  1.  10  B.  Mon.  (Ky.)  261. 

3  Chase  v.  Woodbury,  6  Cush.  (Mass.) 
143. 

140 


CONTRIBUTION   TO   REDEEM.  [§§  1091,  1092. 

1091.  If  a  mortgagor  sells  portions  of  the  mortgaged  prem- 
ises in  different  parcels  at  different  times  by  warranty  deed, 
that  which  he  retains  is  in  equity  primarily  liable  as  against 
all  but  the  mortgagee  for  the  whole  debt,  and  such  grantee  is  not 
required  to  contribute.^  As  between  such  purchaser  and  vendor 
it  is  well  settled  by  all  the  decisions,  both  American  and  English, 
that  the  purchaser  may  redeem  the  mortgage,  and  enforce  it 
against  that  portion  of  the  estate  still  remaining  in  the  hands  of 
the  mortgagor.^  A  person  having  an  agreement  for  purchase, 
such  that  he  could  enforce  a  specific  performance  of  it  in  equity, 
has  the  same  right  as  an  actual  purchaser  to  charge  the  burden  of 
the  incumbrance  upon  the  part  of  the  estate  retained  by  the  mort- 
gagor.=^ 

The  mortgagee  may  generally  enforce  his  security  against  the 
whole  mortgaged  premises  ;  but  if  he  become  the  owner  of  the 
equity  of  redemption  of  the  part  chargeable  with  the  whole 
amount  of  the  mortgage,  he  is  required  in  equity  to  satisfy  his 
mortgage  so  far  as  possible  out  of  that  part.  Therefore,  the  pur- 
chaser by  warranty  deed  of  a  portion  of  premises  covered  by  a 
mortgage  may  redeem  without  contribution  against  a  subsequent 
assignee  of  the  mortgage,  when  such  assignee  has  also  subse- 
quently become  the  owner  of  the  equity  of  redemption  of  the  re- 
maining portion  of  the  land,  and  that  is  sufficient  to  satisfy  the 
mortgage  debt.  The  deed  of  warranty  exempts  the  land  described 
in  it  from  contribution  in  favor  of  the  mortgagor  or  any  person 
claiming  the  remaining  land  under  him,  with  notice  of  the  prior 
conversance.* 

1092.  Portions  of  the  mortgaged  premises  sold  to  different 
persons  are  chargeable  in  the  inverse  order  of  the  conveyances.^ 
Upon  a  decree  of  foreclosure  in  such  case  the  portion,  if  any,  still 
remaining  in  the  hands  of  the  mortgagor  is  first  subjected  to  sale ; 
and  then  the  portion  last  conveyed  by  him,  and  so  on  in  the  in- 
verse order  of  the  conveyances  made  by  him.  This  rule  is  consid- 
ered in  a  subsequent  chapter,  and  the  authorities  are  collected.^ 

1  Wallace  v.  Stevens,  64  Me.  225.  Collins,  34  Vt.  173  ;  Gill  v.  Lyon,  1  Johns. 

2  Cheever  v.  Fair,  5  Cul.  337  ;  2  Story's  (N.  Y.)  Ch.  447  ;  Clowes  v.  Dickenson,  5 
Eq.  §1233.  Johns.  (N.  Y.)   Ch.  23.5;    S.    C.   9   Cow. 

8  Koot  V.  Collins,  43  Vt.  173.  403;  Skcel  v.  Spraker,  8  Paige  (N.  Y.), 

*  Bradley  v.  George,  2  Allen  (Mass.),  182;  Stuyvesant  v.  Hall,  2  Barb.  (N.  Y.) 
392.  Ch.  151. 

6  Lyman  v.  Lyman,  32  Vt.  79  ;  Root  v.         «  Chapter  xxxvi ;  §§  1620-1632. 

141 


§  1093.]  REDEMPTION  OF  A  MORTGAGE. 

Under  the  system  of  registry  in  general  use  in  this  country,  this 
rule  seems  reasonable  and  just,  as  those  acquiring  a  subsequent  in- 
terest in  the  estate  luive  notice  of  the  condition  of  it  when  they 
take  it ;  but  the  record  is  not,  in  general,  notice  to  a  prior  pur- 
chaser.^ The  want  of  a  general  registry  system  in  England  is 
undoubtedly  the  reason  why  this  rule  has  not  been  fully  adopted 
there. 

But  notice  of  the  equities  of  prior  purchasers  may  be  given  in 
other  ways  than  by  the  registry.  A  purchaser^of  a  portion  of  a 
lot  of  land,  the  whole  of  which  is  subject  to  a  prior  mortgage, 
having  notice  of  a  prior  unrecorded  deed  of  warranty  of  an  ad- 
joining portion  of  the  same  lot  to  a  third  person,  cannot  compel 
the  latter  to  contribute.  A  reference  in  the  mortgage  deed  to 
such  owner  of  the  adjoining  lot  amounts  to  notice  of  the  con- 
veyance.^ 

As  between  purchasers  in  succession  of  different  parts  of  the 
equity  of  redemption  of  lands  there  is  no  contribution,  as  the  par- 
ties do  not  stand  on  an  equal  footing  in  equity .^ 

7.    Pleadings  and  Practice  on  Bills  to  redeem. 

1093.  In  general.  —  The  only  remedy  of  the  mortgagor  for 
enforcing  his  right  to  redeem  after  a  breach  of  the  condition  is 
by  a  bill  in  equity.  If  the  mortgagee  is  in  possession,  he  has 
the  right  to  retain  the  possession  until  his  claim  upon  the  prop- 
erty is  paid.  So  long  as  the  mortgage  is  in  fact  not  discharged, 
and  is  apparently  a  subsisting  security,  the  mortgagor  cannot  ob- 
tain possession  by  ejectment.*  The  rule  is  the  same  although 
the  mortgagor  claims  that  the  debt  has  been  paid  in  full.  So 
long  as  the  mortgage  is  apparently  unsatisfied,  and  the  mort- 
gagee claims  any  interest  under  it,  the  mortgagor  must  resort  to  a 
suit  in  equity  to  redeem;  and  although  he  may  allege  that  the 
mortgage  has  been  paid,  or  was  given  for  the  accommodation  of 
the  mortgagee,  and  may  pray  that  a  decree  be  entered  that  it  be 
discharged,  yet  he  should  at  the  same  time  pray  that  he  be  al- 
lowed to  redeem,  and  should  offer  to  do  so  if  anything  be  found 

1  Beard  v.  Fitzgerald,  105  Mass.  134.  *  See  §  1093;    Chase  v.  Peck,  21  N.  Y. 

2  George  v.  Kent,  7  Allen  (Mass.),  16.       581  ;  Pell  v.  Ulmar,  18  N.  Y.  139  ;    Van 
8  Gill  V.  Lyon,  1  .Johns.  (N.    Y.)    Ch.     Dnyne  v.  Thayre,  18  Wend.  (N.  Y.)  233; 

447;    Clowes  v.  Dickenson,  5  Johns.  (N.     Phyfe   v.  Riley,    15   lb.   248;    Woods   v. 
Y.)  Ch.  24(».  Woods,  66  Me.  65. 

142 


PLEADINGS  AND   PRACTICE    ON   BILLS   TO   REDEEM.       [§  1094. 

due  upon  the  mortgage. ^  Although  the  mortgagor  is  already  in 
^  the  actual  possession  of  the  mortgaged  estate,  he  may,  after  a 
breach  of  the  condition  and  payment  of  the  mortgage,  or  a  tender 
of  payment,  maintain  a  bill  to  redeem,  for  in  legal  contemplation 
his  possession  is  considered  that  of  the  mortgagee.^ 

When  the  condition  of  the  mortgage  has  been  saved  by  per- 
formance of  it  before  any  breach  has  occurred,  and  the  mortgagee 
being  in  possession  refuses  to  surrender  it,  the  mortgagor  cannot 
maintain  a  bill  in  equity  to  recover  possession,  because  he  then 
has  a  complete  and  adequate  remedy  at  law.^ 

One  who  has  the  right  to  redeem  cannot  maintain  a  bill  for 
this  purpose  after  a  suit  has  been  brought  against  him  for  the 
foreclosure  of  the  mortgage  ;  nor  can  he  enjoin  the  prosecution 
of  the  foreclosure  suit,  although  he  at  the  same  time  offers  to  re- 
deem.* 

1094.  The  bill  should  conform  to  the  general  principles  of 
equity  pleading  and  practice,  as  modified  by  the  statutes  and  rules 
adopted  in  the  state  where  the  action  is  brought.  It  should  pray 
for  an  accounting  of  what  is  due  upon  the  mortgage,  and  where 
the  mortgagee  has  been  in  receipt  of  rents  and  profits,  for  an  ac- 
counting of  these,  and  that  the  defendant  be  adjudged  to  deliver 
up  the  possession  of  the  estate  upon  payment  of  the  amount 
found  due.  A  bill  which  also  asks  for  the  correction  of  accounts 
already  exchanged  between  the  parties  is  not  open  to  the  ob- 
jection of  being  multifarious,  inasmuch  as  the  accounts  relate 
to  the  mortgage  debt,  and  the  correction  asked  for  is  only  a  dif- 
ferent mode  of  asking  for  relief  by  a  true  account  stated.^ 

The  plaintiff's  bill  should  contain  sufficient  averments  to  meet 
the  case  he  wishes  to  make  out,  and  should  ask  for  all  the  remedy 
he  is  entitled  to  or  wishes  to  obtain.  If  the  mortgagee  has  been 
in  possession  and  has  received  rents  and  profits,  the  bill  should  so 
allege,  and  should  pray  to  have  an  account  of  them  taken,  other- 
wise no  deduction  will  be  made  upon  the  mortgage  debt  on  ac- 
count of  such  rents  and  profits.^ 

A  bill  in  equity  by  a  tenant  for  life  prayed  that  he  might  be 

1  Hill  V.  Payson,  3  Mass.  559;  Parsons  ^  nicks  v.  Bingham,  11  Mass.  300. 

V.  Welles,  17  Mass.  419  ;  Newton  v.  Baker,  3  Holman  v.  Bailey,  3  Met.  (Mass.)  55. 

125  Mass.  30;    Beach  v.  Cooke,  28  N.  Y.  *  Kilborn  v.  Bobbins,  8  Allen  (Mass.), 

508.      See,  however,  Farmers'  F.  Ins.    &  466. 

Loan  Co.  v.  Edwards,  21   Wend.   (N.  Y.)  5  Greene  v.  Harris,  10  R.  I.  382. 

467  ;  S.  C.  26  lb.  540.  6  Cree  v.  Lord,  25  Vt.  498. 

143 


§  1095.]  REDEMPTION   OF   A   MORTGAGE. 

])i'nnitte(l  to  hold  possession  of  the  mortgaged  premises  upon  pay- 
ing the  interest  as  it  might  accrne,  and  that  upon  paying  the 
whole  amount  due  upon  the  mortgage,  the  mortgagee  might  be 
compelled  to  assign  it  to  him.  But  as  a  bill  for  these  purposes  is 
not  allowed,  it  was  nevertheless  maintained  as  a  bill  to  redeem 
simply  ;  inasnmch  as  it  contained  an  averment  that  the  plaintiff 
was  ready  and  offered  to  pay  the  full  amount  due  on  the  mort- 
gage, upon  an  assignment  of  it  to  himself,  "  or  in  such  other  way 
and  upon  such  other  terms  "  as  to  the  court  should  seem  meet ; 
and  although  the  bill  did  not  pray  for  an  account,  it  alleged  that 
an  account  had  been  previously  demanded,  and  prayed  for  full 
answers  to  the  bill,  and  the  answer  alleged  the  defendant's  read- 
iness to  account.^ 

1095.  The  bill  to  redeein  must  make  a  tender  of  the  amount 
the  plaintiff  concedes  to  be  due  on  the  mortgage  debt,  or  must 
offer  to  pay  whatever  may  be  found  to  be  due.^  If  the  bill  be 
brought  on  the  ground  of  a  tender  made  and  refused,  the  tender 
should  be  followed  up  by  a  payment  into  court,  at  the  time  of  fil- 
ing the  bill,  which  should  contain  a  proper  averment  of  a  com- 
pliance with  this  requirement,  otherwise  it  will  be  without  equity.^ 
The  mere  payment  of  the  money  into  court,  not  made  upon  any 
tender  averred  in  the  bill  and  proved  by  evidence,  does  not 
amount  to  a  tender,  and  does  not  affect  the  case.*  A  suggestion 
of  the  plaintiff's  poverty  and  inability  to  redeem,  for  which  reason 
he  asks  for  a  sale  of  the  premises,  does  not  excuse  the  omission 
of  an  offer  to  redeem.^ 

Either  an  allegation  of  tender  or  an  offer  to  pay  is  a  necessary 
part  of  the  bill,  and  the  omission  is  ground  for  a  demurrer."     But 

1  Lamson  v.  Drake,  105  Mass.  564.  As  to  what  is  a  sufficient  averment  of  ten- 

2  Harding  v.  Piiigey,  10  Jur.  N.  S.  der  and  offer  to  redeem,  see  Edgerton  v. 
872 ;  Dayton  v.  Hayter,  7  Beav.  319  ;  Tas-  McRea,  6  Miss.  (5  How.)  183  ;  Lanniug  v. 
ker  V.  Small,  3  Myl.  &  Cr.  63;  Perry  v.  Smith,  1  Pars.  (Pa.)  Sel.  Cas.  13  ;  Barton 
Carr,  41  N.  H.  371 ;  Kemp«.  Mitchell,  36  v.  May,  3  Sandf.  (N.  Y.)  Ch.  450;  Quin 
Ind.  249;    Silsbee  v.  Smith,  60  Barb.  (N.  v.  Brittain,  Hofi'.  (N.  Y.)  Ch.  353.. 

Y.)  372;    S.  C.  41  How.  Pr.  418;    Beek-  *  Hart  v.  Goldsmith,  1  Allen   (Mass.), 

man  v.  Frost,  18  Johns.  (N.  Y.)  544;    1  145. 

Johns.  Ch.  288;   Miner  v.  Beekman,    11  5  Goldsmith?;.  Osborne,  1  Edw,  (N.  Y.) 

Abb.  (N.  Y.)  Pr.  N.  S.  147,  163;    Crews  560. 

17.  Tbreadgill,  35  Ala.  334 ;  Anson  v.  An-  ^  Allerton   v.  Belden,   49    N.   Y.   373  ; 

son,  20  Iowa,  55;   Hoopes  v.  Bailey,  28  Silsbee  v.  Smith,  60  Barb.  (N.  Y.)  372; 

Miss.  328  ;  Coombs  v.  Carr,  55  Ind.  303.  41  How.  Pr.  418. 
8  Daughdrill  v.  Sweeney,  41  Ala.  310. 

144 


PLEADINGS   AND   PRACTICE    ON   BILLS   TO   REDEEM.       [§§  1096-1098. 

although  no  objection  be  taken  to  this  omission,  relief  will  be 
granted  only  upon  condition  of  payment  of  what  is  justly  due.^ 
Where  the  mortgagee  fraudulently  prevented  the  plaintiff  from 
seasonably  redeeming,  and  neglected  to  render,  upon  request,  an 
account  of  the  amount  due,  the  failure  of  the  plaintiff  to  tender 
or  bring  into  court  the  amount  due  was  held  to  be  no  ground  for 
dismissing  the  bill ;  but  a  decree  was  ordered  that  on  payment 
within  a  fixed  time  the  defendant  should  release  the  mortgage.^ 

In  like  manner  tender  of  the  debt  should  be  made  in  a  bill  to 
have  an  absolute  deed  declared  a  mortgage ;  but  when  the  fact  of 
the  loan  is  established,  the  omission  will  only  affect  the  matter  of 
costs.2 

1096.  After  payment  in  full.  —  If  the  mortgage  has  been 
paid,  or  if  the  mortgagee  has  received  rents  and  profits  from  the 
estate  sufficient  to  pay  both  the  principal  and  interest  of  the 
mortgage  debt,  a  tender  or  offer  in  the  bill  to  pay  whatever  may 
be  due  is  no  longer  necessary ;  but  the  bill  should  in  that  case 
allege  the  payment  of  the  mortgage,  and  demand  an  accounting 
by  the  mortgagee.  Upon  the  refusal  of  the  mortgagee  to  account, 
and  proof  that  the  mortgage  is  paid,  the  plaintiff  is  entitled  to  a 
judgment  for  possession  of  the  premises.^  The  suit  in  such  case 
is  really  one  to  compel  a  discharge  of  the  mortgage.^ 

1097.  The  parties.  —  As  a  general  rule,  all  persons  who  have 
an  interest  in  the  mortgage  oi-  in  the  equity  of  redemption,  which 
interest  is  apparent  of  record  or  known  to  the  plaintiff",  should  be 
made  parties  to  the  suit.*^  The  plaintiff  must  have  some  interest 
in  the  equity  of  redemption,  and  if  there  are  also  others  inter- 
ested in  it  he  must  make  them  parties  to  the  suit,  generally  as  de- 
fendants. He  must  also  make  defendants  all  persons  who  appear 
to  be  interested  in  the  mortgage  security.  Objection  that  persons 
who  are  necessary  parties  have  not  been  brought  before  the  court 
may  be  taken  by  answer." 

1098.  Proper  parties  plaintiff.  —  Any  one  who  has  a  right  to 

1  Schermerliorn  i'.  Talinan,  14  N.  Y.  ^  Beach  v.  Cooke,  28  N.  Y.  508;  39 
93.  Bai-b.  360. 

2  Watkins  v.  Watkins,  57  N.  H.  462.  6  Calvert  on  Parties,  13,  91 ;  Evans  v. 
8  Marvin  v.  Prentice,  49  IIow.  (N.  Y)     Jonc;;,  Kay,  39. 

Pr.  385.  "   Winslow  v.  Clark,  47  N.  Y.  261 ;  Dias 

♦  Qiiin  V.  Brittain,  Iloff.  (N.  Y.)    Ch.     v.  Merle,  4  Paiye  (N.  Y.),  259. 
353;    Calkins   v.   Isbell,   20  N.    Y.    147; 
Barton  v.  May,  3  Sandf.  (N.  Y.)   Ch.  450. 

VOL.  II.  10  I^Q 


§  1099.]  REDEMPTION   OF   A   MORTGAGE. 

redeem  is  a  proper  party  plaintiff.  Upon  the  death  of  one  hav- 
ing an  interest  in  fee  in  the  land  his  heirs  or  devisees  are  tlie 
proper  parties.^  If  part  of  the  mortgage  has  been  paid  in  the 
lifetime  of  the  mortgagor,  and  an  account  is  to  be  taken  of  the 
amount  due  on  the  mortgage,  the  personal  representatives  of  the 
mortgagor  should  be  joined  with  the  heir  or  devisee  as  parties 
plaintiti" ;  or  in  case  of  their  refusal  to  join  in  the  bill  they  should 
be  made  defendants.^  If  the  mortgage  be  of  a  term  of  years 
only,  this  being  a  personal  interest,  then  only  the  personal  repre- 
sentatives of  the  mortgagor  need  be  made  parties  plaintiff.^ 

A  wife,  in  a  bill  to  redeem  her  own  land,  need  not  join  her 
husband.^  If  the  equity  of  redemption  has  been  conveyed,  sub- 
ject to  the  mortgage,  to  different  persons,  or  if  others  have  in  any 
way  become  interested  in  it,  upon  redemption  by  the  owner  of 
one  part  of  it,  he  should  join  all  others  having  an  interest  in  it  as 
defendants,  because  they  are  all  interested  in  the  rendering  of  the 
mortgagee's  account.^  The  interest  of  the  others  should  appear 
from  the  allegations  of  the  bill.^  If  the  mortgagor  has  conveyed 
the  equity  of  redemption  by  warranty  deed,  so  that  he  is  liable  to 
discharge  the  mortgage,  the  mortgagor  should  be  made  a  party, 
so  that  he  may  assist  in  taking  the  account  and  be  bound  by  the 
decree.'^  If  in  such  case  the  mortgagor  claims  that  the  mortgage 
is  paid,  but  the  holder  of  it  claims  that  something  is  still  due 
upon  it,  the  purchaser  may  properly  bring  both  of  them  before 
the  court  upon  a  bill  to  redeem,^ 

1099.  Heir  of  mortgagor.  —  Although  upon  the  death  of  the 
mortgagor  or  other  owner  of  the  equity  of  redemption,  his  heir  or 
devisee  should  bring  the  suit  to  redeem  ;  ^  yet  where  the  suit  was 
brought  by  the  administrator,  and  it  was  for  the  first  time  ob- 
jected at  the  hearing  that  the  heirs  should  have  been  joined,  it 
was  held  that  as  the  heirs  were  not  prejudiced,  and  the  adminis- 

1  Story's  Eq.  PI.  §  182;  Duncombe  v.  ^  Story's  Eq.  PI.  §  183;  McCabe  v. 
Hansley,  3  P.  W.  333,  n.;  Sutherland  v.     Bellows,  1  Allen  (Mass.),  269. 

Rose,  47  Barb.  (N.  Y.)  144.  6  Lovell  v.  Farrington,  50  Me.  239. 

2  5  Waite's  Prac.  28.5  ;  Cholmondeley  y.         ''  Story's  Eq.  PI.  §  183. 

Clinton,  2  Jac.  &  W.  1.35;  Rylands  d.  La  »  Wandle  v.  Turney,  5   Duer  (N.  Y.), 

Touche,  2  Bli|,'h,  566.  661. 

3  Story's  Eq.  PI.  §  182;  Sutherland  v.  *  Sutherland  v.  Rose,  su]>ra ;  Elliot  v. 
Rose,  supra;  Wilton  v.  Jones,  2  Y.  &  C.  Patton,  4  Yerg.  (Tenn.)  10;  Smith  v. 
C.  C.  244.  Manning,  9  Mass.  422 ;  Putnam  v.  Put- 

*  Hilton  V.  Lothrop,  46  Me.  297.  nam,  4  Pick.  (Mass.)  139. 

146 


PLEADINGS   AND   PRACTICE   ON   BILLS   TO   REDEEM.       [§  1100. 

trator's  interest  entitled  him  to  redeem,  the  decree  in  his  favor 
should  be  affirmed,^  In  case  the  mortgage  be  of  a  leasehold  es- 
tate merely,  the  personal  representatives  of  the  deceased  mort- 
gagor are  the  proper  parties.^ 

In  Massachusetts  it  is  provided  by  statute  that  upon  the  death 
of  the  person  entitled  to  redeem  without  having  made  a  tender 
for  that  purpose,  his  executor  or  administrators,  as  well  as  his  heirs 
or  devisees,  may  make  the  tender,  and  commence  and  prosecute 
the  suit ;  or  they  may  commence  and  prosecute  a  suit  founded 
upon  a  tender  made  by  the  deceased  in  his  lifetime,  or  they  may 
prosecute  a  suit  begun  by  him.^ 

As  a  general  rule,  trustees  who  hold  the  equity  of  redemption 
are  the  proper  parties  to  file  a  bill  to  redeem.*  Assignees  or  trus- 
tees of  the  equity  of  redemption  for  the  benefit  of  creditors  may 
maintain  an  action  to  redeem  without  joining  the  creditors.^  In 
case  such  assignees  or  trustees  neglect  or  refuse  to  act,  or  are  in 
collusion  with  the  mortgagee,  then  the  creditors,  or  one  for  the 
benefit  of  all,  may  bring  the  action,  and  join  the  trustees  or  as- 
signees as  defendants.^ 

A  mortgagor  who  has  conveyed  his  equity  of  redemption  abso- 
lutely," or  whose  right  in  equity  has  been  sold  on  execution,^  or 
assigned  in  bankruptcy,^  need  not  be  made  a  party  to  the  suit  to 
redeem. 

1100.  The  parties  defendant  to  a  bill  to  redeem  should  be  all 
persons  legally  or  beneficially  interested  under  the  mortgage.  If 
there  be  no  outstanding  interest  under  the  mortgagee,  he  is  the 
only  necessary  party.  If  he  be  dead,  the  heirs  at  law  or  devisees 
in  whom  the  legal  estate  is  vested  must  be  made  parties  ;  and  the 
personal  representative  of  the  mortgagee  should  at  the  same  time 
be  made  a  party,  because  he  is  entitled  to  recover  the  money  paid.^^ 

1  Enos  V.  Sutherland,  11  Mich.  538;  '^  Hilton  y.  Lothrop,  46  Me.  297;  see, 
Guthrie  v.  Sorrell,  6  Ired.  (N.  C.)  Eq.  13.     however,  Clark   v.  Long,  4  Rand.  (Va.) 

2  Story's  Eq.  PI.  §  170.  451. 

8  Gen.  Stat,  of  Mass.  1860,  c.  140,  §§        »  Thorpe  v.  Ricks,  1  Dev.  &  B.  (N.  C.) 

32,  33.  Eq.  613. 

*  Dexter  v.  Arnold,  1  Sumn.  109.  »  Kerrick  v.  Saffery,  7  Sim.  317  ;  Lloyd 

*  Story's  Eq.  PI.  §  184;  Waite's  Prac.  v.  Lander,  5  Mad.  282;  Jones  v.  Birms, 
286  ;  Hanson  v.  Preston,  3  Y.  &  C.  229  ;  33  Beav.  362;  Metropolitan  Bank  v.  Of- 
Cash  V.  Belcher,  1  Hare,  310 ;  Hill  v.  Ed-  ford,  L.  R.  10  Eq.  398. 

monds,  5  De  G.  &  S.  603.  lo  Story's  Eq.  Plead.  §  188  ;  Hilton   v. 

^  Troughton   v.   Binkes,    6    Ves.    573  ;     Lothrop,  46  Me.  297. 
Holland  v.  Baker,  3  Hare,  68. 

147 


§  1100.]  REDEMPTION  OF  A  MORTGAGE. 

The  person  who  is  the  legal  holder  of  the  mortgage  at  the  time 
the  action  is  brought  is  always  a  necessary  party,  whether  he  be 
mortgagee  or  assignee  of  the  mortgage  ;  ^  and  all  holders  of  the 
mortgage  who  have  been  in  possession  of  the  estate,  and  have  re- 
ceived rents  and  profits,  should  be  made  parties  for  the  purpose 
of  taking  the  account.  Except  in  such  -case,  the  holders  of  the 
mortgage  prior  to  the  holder  at  the  time  of  the  commencement 
of  the  suit,  who  have  no  longer  any  interest  in  the  security,  are 
not  necessar^'^  parties  to  it.^ 

All  the  mortgagees  or  assignees  of  it,  in  whom  the  legal  title  is 
vested,  are  necessary  parties.^ 

When  redemption  is  sought  by  one  who  was  not  made  a  party 
to  a  foreclosure  suit,  and  whose  rights  were  in  consequence  not 
barred  by  it,  he  should  not  join  with  the  purchaser  as  defendant 
any  one  who  was  made  a  party  to  the  foreclosure  suit,  and  whose 
rights  are  extinguished.* 

The  mortgagee  is  the  only  necessary  party  when  no  one  else  is 
interested  under  him  in  the  mortgage.  If  he  has  assigned  his 
mortgage  as  collateral  security,  or  has  assigned  a  part  interest 
only  in  the  mortgage,  he  is  still  a  necessary  party,  as  also  is  his 
assignee.^  If  he  has  made  an  absolute  conveyance  of  the  estate 
as  security,  his  grantee  must  be  joined  with  him.^  Even  after 
any  absolute  assignment  by  the  mortgagee,  though  no  longer  a 
necessary  party,'  he  may  properly  be  joined  as  a  defendant,  es- 
pecially if  it  appears  that  he  is  in  any  way  interested  in  taking 
the  account.^  But  an  assignee  of  the  mortgage  who  has  not  be- 
come liable  for  the  debt,  and  who  has  not  become  accountable  for 
rents  and  profits,  should  not  be  made  a  party  to  the  bill,  unless 
he  is  charged  with  fraud  or  collusion,  or  a  discovery  is  sought 
from  him.^     If  he  has  assigned  his  mortgage,  or  conveyed  his  in- 

1  Yclverton  v.  Shelden,  2  Sandf.  (N  6  Winslow  v.  Clark,  47  N.  Y.  2G1  ;  Dias 
Y.)  Ch.  481.  V.  Merle,  4  Paige  (N.  Y.),  259  ;  Davis  v. 

2  Whitney  u.  McKinney,  7  Johns.  (N.  Duffie,  18  Abb.  (N.  Y.)  Pr.  360;  Brown 
Y.)  Ch.  144.  V.  Johnson,  53  Me.  246. 

8  Woodward  v.  Wood,  19  Ala.  213.  ''  Beals  v.  Cobb,  51  Me.  348. 

*  5  Wait's  Prac.  286.  ^  Doody  v.  Pierce,  9  Allen  (Mass.),  141; 

6  Norrish  v.  Marshall,  5  Mad.  475  ;  Ho-  Wing  v.  Davis,  7  Me.  31  ;  Whitney  v.  Mc- 

bart  V.  Abbot,  2  P.  Wms.  643  ;  Winslow  Kinney,  7  Johns.  (N.  Y.)  Ch.  144. 

V.  Clark,  47  N.   Y.  261  ;  Dias  v.  Merle,  4  »  Williams  v.  Smith,  49  Me.  564. 
Paige  (N.   Y.),   259;   Davis  v.  Duffie,  8 
Bosw.  (N.  Y.)  617  ;  4  Abb.  Pr.  N.  S.  478. 

148 


PLEADINGS   AND   PRACTICE   ON   BILLS   TO   REDEEM.       [§  1101. 

terest  in  the  land  upon  trusts  declared,  the  trustee  and  the  cestui 
que  trust  as  well  should  be  made  parties  to  the  action.^ 

One  who  has  purchased  under  a  defective  foreclosure  sale  is  in 
effect  an  assignee  of  the  mortgage,  and  as  such  he  must  be  made 
a  party  to  the  suit.  If  he  has  granted  portions  of  the  property 
to  others,  they  thereby  become  assignees  of  a  part  of  the  mort- 
gage in  proportion  to  the  value  of  their  respective  purchases ; 
and  upon  redemption  the  money  paid  must  be  divided  in  propor- 
tion to  the  purchase  money  paid  by  each,  and  in  the  order  of  the 
purchases.^ 

1101.  Upon  the  death  of  a  mortgagee  of  an  estate  in  fee,  ac- 
cording to  the  English  rule,  his  heir  or  devisee  must  be  made  a 
party,  because  the  legal  estate  is  in  him  ;  and  the  personal  rep- 
resentative must  also  be  made  a  party,  because  he  is  generally 
entitled  to  the  money  when  it  is  paid.^  If  the  mortgage  be  of  a 
leasehold  estate,  the  personal  representative  only  of  the  mortgagee 
without  the  heir  should  be  made  defendant,  because  he  alone  is 
interested  in  the  term.*  In  those  states  where  the  common  law 
doctrine  that  the  legal  estate  is  in  the  mortgagee  has  given  place 
to  the  doctrine  that  he  has  only  a  lien  for  the  security  of  his 
claim  without  any  legal  estate,  the  mortgagee's  administrator  is 
the  only  necessary  party  in  such  case.^ 

Where  the  heirs  at  law  of  the  mortgagee  entered  upon  the  land 
and  took  all  the  needful  steps  to  foreclose  if  they  had  been  enti- 
tled to  foreclose,  and  held  open  and  peaceable  possession  for  more 
than  eight  years,  when  an  administrator  was  first  appointed  upon 
the  petition  of  the  mortgagor,  who  thereupon  filed  a  bill  in  equity 
to  redeem,  it  was  held  that  he  was  entitled  to  redeem,  and  to  an 
account  of  the  rents  and  profits  wrongfully  received  by  the  heirs. 
The  heirs  having  entered  under  the  mortgage,  and  having  alleged 
a  foreclosure  in  their  answer,  cannot  shield  themselves  from  ac- 
countability by  saying  that  they  occupied  as  mere  strangers  and 
disseisors.  The  administrator  is  properly  made  a  party  because 
he  is  the  person  to  whom  the  balance  is  to  be  paid  by  the  plain- 
tiff.    The  heirs  being  in  effect  executors  in  their  own  wrong  are 

1  Wetherell  v.  Collins,  3  Mad.  255;  »  Story's  Eq.  PI.  §  188  ;  Anon.  2  Freera. 
Drew  V.  Harman,  5  Price,  319  ;  Whistler     52. 

V.  Webb,  Burib.  .53.  «  Osbourn?;.  Fallows,  1  Russ.  &M.  741. 

2  Davis  V.  Diiffie,  8  Bosw.  (N.  Y.)  617  ;         »  Copeland  v.  Yoakum,  38  Mo.  349. 
aff'd  3  Keyes,  606  ;  4  Abb.  Pr.  N.  S.  478. 

149 


§  1102.]  REDEMPTION   OF  A   MORTGAGE. 

interested  in  tlie  account  and  therefore  are  proper  parties  to  the 
bill.^ 

1102.  "When  a  junior  mortgagee  seeks  to  redeem  he  must 
make  the  mortgagor  or  other  representative  of  the  realty  a  party, 
and  the  prior  mortgagees  as  well.  Though  the  object  be  merely 
to  redeem  a  prior  mortgage,  the  owner  of  the  equity  of  redemp- 
tion is  a  necessary  party,  because  a  court  of  equity  always  seeks 
to  determine  the  rights  of  all  parties  interested  in  the  estate  ;  and 
to  do  this  in  such  case  the  decree  should  be  that  the  second  mort- 
gagee redeem  the  first  mortgage,  and  that  the  owner  of  the  equity 
of  redemption  redeem  the  second  mortgagee  or  stand  foreclosed. 
If  the  owner  of  the  equity  of  redemption  be  not  made  a  party, 
his  right  to  redeem  remains  open,  and  the  first  mortgagee  may 
be  exposed  to  another  suit.^  If  the  junior  mortgagee  is  unable  to 
foreclose  his  mortgage,  for  the  reason  that  it  is  not  due  or  for 
other  cause,  then  he  cannot  redeem  a  prior  mortgage  against  the 
consent  of  the  holder  of  it ;  for  in  such  case  he  cannot  bring  the 
mortgagor  before  the  court  for  the  purpose  of  completing  his 
remedy  by  foreclosure,  and  he  cannot  compel  the  mortgagee  to 
assign  to  him.^  Of  course  he  may,  at  a  foreclosure  sale  by  the 
prior  mortgagee,  buy  the  estate ;  and  it  is  said  that  the  court 
may  restrain  the  prior  mortgagee  from  making  a  sudden  sale  for 
the  purpose  of  preventing  a  redemption  or  purchase  by  the  junior 
mortgagee.* 

The  first  mortgagee,  after  having  filed  a  bill  of  foreclosure,  is 
not  justified  in  refusing  a  tender  of  the  principal  and  interest  due 
him,  and  in  insisting  upon  being  redeemed  only  by  the  ordinary 
suit  in  court.^ 

When  a  subsequent  mortgagee  of  a  part  of  the  estate  comprised 
in  the  first  mortgage  redeems,  he  must  make  the  owners  of  all 
parts  of  that  estate  parties  to  his  suit,*^  for  the  prior  mortgage 
must  be  redeemed  entirely  or  not  at  all ;  and  if  the  owner  of  the 
equity  of  redemption  of  any  part  of  that  estate  is  not  brought  be- 
fore the  court,  the  mortgagee  may  be  subjected  to  another  suit* 

1  Haskins  i;.  Hawkes,  108  Mass.  379.  S.    92;   Rhodes  v.  Buckland,    16    Beav. 

2  Story's  Eq.  PI.  §  186,  and  cases  cited  ;     212. 

Fell  V.  Brown,  2   Bro.  C.  C.  276  ;  Palk  v.  *  Rhodes  v.  Buckland,  supra. 

Clinton,  12  Ves.  48;  Farmer  v.  Curtis,  2  ^  Smith  v.  Green,  1  Coll.  5.55. 

Sim.  466;  Caddick  v.  Cook,  32  Beav.  70;  <*  Palk  v.  Clinton,  12  Ves.  48  ;  Peto  v. 

9  Jur.  N.  S.  454 ;  32  L.  J.  N.  S.  Ch.  769.  Hammond,  29  Beav.  91  ;  Thorneycroft  v. 

3  Ramsbottom  v.  Wallis,  5  L.  J.  Ch.  N.  Crockett,  2  H.  L.  C.  239. 

150 


PLEADINGS   AND   PRACTICE    ON   BILLS   TO   REDEEM.       [§§  1103-1105. 

1103.  A  person  to  whom  the  mortgage  note  has  been  trans- 
ferred without  an  assignment  of  the  mortgage  has  an  equita- 
ble interest  in  the  mortgage,  and  should  be  made  a  party  to  the 
bill.i 

It  would  seem  that  in  a  bill  to  redeem  where  a  mortgagee  has 
indirectly  become  the  purchaser  at  a  sale  under  a  power  in  the 
mortgage,  which  gave  him  no  right  to  purchase,  and  the  property 
sold  for  a  less  sum  than  the  mortgage  debt,  the  bill  proceeding  on 
the  ground  that  the  purchase  from  his  grantee  was  not  a  bond 
fide  purchase,  the  mortgagee  should  be  made  a  party  to  the  bill, 
because  he  apparently  retained  the  original  debt  to  which  the 
mortgage  is  incident.'^ 

A  mortgagee  who  has  assigned  his  mortgage  and  note  as  collat- 
eral security  for  his  own  debt  must  be  made  a  party  to  a  bill  to 
redeem,  as  well  as  the  person  who  received  such  assignment.^ 

1104.  Reference  to  state  account.  —  Where  the  mortgagee 
has  been  in  possession  and  an  account  of  the  rents  and  profits  is 
demanded,  the  usual  practice  is  to  order  a  reference  to  a  master  to 
state  an  account.  The  reference  generally  embraces  not  only  an 
accounting  of  the  rents  and  profits,  but  also  of  the  amount  due  on 
the  mortgage.  Even  when  the  mortgagee  has  not  received  the 
rents  and  profits  a  reference  may  be  had,  especially  upon  a  de- 
fault, to  determine  the  amount  due  on  the  mortgage.^  The  case 
may  be  sent  to  a  master  to  take  evidence  and  state  an  account 
after  it  has  been  set  down  for  hearing  on  the  bill  and  answer.^ 
If  there  be  a  conflict  of  testimony  as  to  the  amount  that  has  been 
paid  upon  the  mortgage  the  court  will  not  determine  it,  but  will 
refer  the  case  to  a  master.^ 

After  the  plaintiff  by  his  bill  has  admitted  that  a  certain  sum 
is  due  on  the  mortgage,  the  defendant  claiming  a  larger  sum,  the 
master  cannot  report  that  nothing  is  due." 

1105.  Defences.  —  The  consideration  of  the  mortgage  cannot 
be  inquired  into  unless  the  plaintiff  lays  the  foundation  for  the  in- 
quiry by  proper  averments  in  the  bill.^  On  the  other  hand,  as  a 
general  thing  it  is  wholly  immaterial  to  the  mortgagee  in  what 

1  Stone  V.  Locke,  46  Me.  445.  ^  Doody  v.  Pierce,  supra. 

2  Burns  v.  Thayer,  11.5  Mass.  89.  «  Bartlett  v.  Fellows,  47  Me.  53;  Jew- 
«  Brown  v.  Johnson,  53  Me.  246.                ett  v.  Guild,  42  Me.  246. 

4  Doody   V.   Pierce,    9   Allen    (Mas.s.),         ''  Bellows  r.  Stone,  18  N.  H.  465. 
141  ;  5  Wait's  Prac.  288.  ^  Uexter  v.  Arnold,  2  Sumn.  108. 

161 


§  1105.]  REDEMPTION   OF   A   MORTGAGE. 

manner,  for  what  object,  or  wliat  consideration,  the  owner  of  the 
equity  of  redemption  acquired  his  title. ^  The  mortgagee  cannot 
defend  upon  the  ground  that  plaintiff  is  not  the  real  owner  of  the 
equity  of  redemption  ;  that  the  money  for  the  purchase  of  the 
property  was  furnished  by  another  person,  as,  for  instance,  the 
husband,  where  the  wife  was  the  apparent  owner  and  the  plaintiff 
in  the  suit  to  redeem. ^ 

A  first  mortgagee  cannot  defend  a  bill  brought  by  a  subsequent 
mortgagee  upon  the  ground  that  the  mortgage  was  fraudulent  as 
against  the  mortgagor's  creditors.  But  he  may  show  that  such 
mortgage  was  never  delivered,  and  is  therefore  not  a  valid  con- 
veyance between  the  parties  to  it.^ 

If  the  plaintiff  has  an  equitable  right  to  redeem,  it  is  no  de- 
fence that  he  has  verbally  contracted  to  sell  the  land.^  If  the 
mortgagor  in  his  bill  to  redeem  alleges  payment  of  the  mortgage 
prior  to  the  moi'tgagee's  entry  upon  the  land,  fifteen  years  before, 
the  burden  of  proving  payment  is  upon  him,  and  if  he  does  not 
sustain  it  the  bill  is  dismissed  with  costs.^ 

After  an  express  waiver  by  the  defendant  in  his  answer  of  all 
objection  to  the  plaintiff's  redeeming  upon  payment  of  all  sums 
found  due,  he  cannot  afterwards  insist  that  the  mortgage  had 
been  foreclosed  before  the  bringing  of  the  suit.*^  In  a  bill  to  re- 
deem by  the  mortgagor,  he  may  set  up  the  reservation  of  usurious 
interest  on  the  mortgage  debt,  and  is  entitled  to  the  statute  pen- 
alty for  usury  in  reduction  of  the  sum  payable  on  the  mortgage." 
And  so  also  in  a  writ  of  entry  by  the  mortgagee  to  foreclose,  the 
moi'tgagor  may  avail  himself  of  usury  as  a  defence  and  in  reduc- 
tion of  the  amount  for  which  conditional  judgment  shall  be  en- 
tered ;  ^  but  no  deduction  is  to  be  made  for  usury  paid  under  a 
verbal  agreement  not  incorporated  in  the  written  contract.^  After 
a  usurious  debt  has  been  settled,  by  the  mortgagee's  taking  the 
property  mortgaged  to  secure  it  in  satisfaction  of  it,  the  transac- 
tion will  not  be  opened,  and  redemption  allowed  on   account  of 

1  Beach  v.  Cooke,  28  N.  Y.  508;  39  «  Strongv.  Blanchard,  4  Allen  (Mass.), 
Barb.  (N.  Y.)  360.  538. 

2  Green  v.  Dixon,  9  Wis.  532.  ^  Hart  v.  Goldsmith,    1  Allen    (Mass.), 

3  Powers  y.  Russell,  13  Pick.  (Mass.)  145;  Smith  y.  llobinson,  10  Alien  (Mass.), 
69.  130  ;  Gerrish  v.  Black,  104  Mass.  400  ;  99 

*  Patterson  v.  Yeaton,  47  Me.  308.  Mass.  315 ;  113  Mass.  486  ;  122  Mass.  76. 

*  Furlong  v.  Randall,  46  Me.  79.  ^  Ramsay  v.  Warner,  97  Mass.  8. 

8  Minot  V.  Sawyer,  8  Allen  (Mass.),  78. 

152 


PLEADINGS  AND  PRACTICE  ON  BILLS  TO  REDEEM.   [§§  1106,  1107. 

the  usury .^  No  deduction  can  be  made  for  usurious  interest  al- 
ready paid  by  a  former  owner.^ 

Neither  can  the  mortgagor  be  allowed  in  the  account  treble 
damages  for  waste  committed  by  the  mortgagee  pending  the  bill 
to  redeem,  as  such  damages  can  only  be  enforced  in  the  manner 
provided  by  statute.^ 

Usury  cannot  be  shown  in  defence  to  a  bill  to  redeem  unless  the 
usury  and  the  facts  and  circumstances  constituting  it  are  set  up 
in  the  answer.^ 

1106.  The  decree.  —  The  form  of  the  judgment  ordinarily  is 
that  the  plaintiff  may  redeem  upon  paying  the  amount  found  due 
on  the  moi'tgage  within  a  specified  time,  together  with  costs  ;  and 
that  upon  his  doing  so  the  defendant  shall  discharge  the  mort- 
gage and  deliver  up  the  mortgaged  premises ;  and  that  upon  de- 
fault of  such  payment  the  complaint  be  dismissed  with  costs.^ 

A  decree  which  declares  that  upon  redemption  the  mortgagor 
shall  hold  the  premises  discharged  of  the  mortgage  and  free  from 
all  right,  title,  and  estate  under  the  mortgage,  gives  no  rights  as 
against  tenants  of  the  mortgagee  beyond  what  he  would  otherwise 
have  upon  redemption.^ 

When  nothing  is  found  due  to  the  mortgagee,  the  mortgagor 
is  not  only  entitled  to  a  discharge  of  the  mortgage  but  to  a  judg- 
ment for  possession,  and  to  a  writ  of  possession  to  recover  it.' 

1107.  The  decree  should  fix  a  time  within  which  the  re- 
demption is  to  take  place.  Tliis  time  rests  in  the  sound  dis- 
cretion of  the  court  in  view  of  all  the  circumstances.  The  usual 
time  is  six  months ;  ^  if  the  plaintiff  neglects  to  redeem  within  the 
time  specified  his  right  is  barred  forever.^  Additional  time  might 
be  allowed  to  enable  the  plaintiffs  to  obtain  contribution  from 
one  of  tlie  defendants  who  is  also  interested  in  the  equity  of  re- 
demption ;  ^^  or  it  may  be  allowed  when  the  failure  to  pay  was 

1  Adams  V.  McKenzie,  18  Ala.  698.  Heard  Dig.  (Mass.)  30G.     See  Gerrish  v. 

2  Periine    v.    Poulson,    53    Mo.    309;     Black,  122  Mass.  76. 

Kirkpatrick  V.  Smith,  55  Mo.  389.  »  Novosielski    v.    Wakefield,    17    Vcs. 

8  Boston   Iron  Co.  v.  King,    2    Cush.  417;  Waller  v.   Harris,  7  Paige  (N.  Y.), 

(Mass.)  400.  167;  Perine   v.  Dunn,  4  Johns.  (N.  Y.) 

*  Waterman  v.  Curtis,  26  Conn.  241.  Ch.  140;  Brinckerhoff  ?;.  Lansing,  lb.  65  ; 

5  Wait's  Prac.   288;   2  Barb.    Ch.    Pr.  Dunham  v.  Jackson,  6  Wend.  (N.  Y.)  22. 

199  ;  Pitman  v.  Thornton,  66  Me.  469.  »  Sherwood  v.  Hooker,  I  Barb.  (N.  Y.) 

*>  Holt  V.  Ree.s,  46  111.  181.  Ch.  650. 

7  Churchill   v.  Beale,  MSS.  2  Ben.  &  i'  Brinckerhofff.  Lansing,  4  Johns.  (N. 

Y.)  Ch.  65. 

153 


§  1108.]  REDEMPTION   OF   A   MORTGAGE. 

occasioned  by  fraud,  accident,  or  mistake ;  but  if  the  negligence 
of  tho  complainant  himself  has  contributed  to  such  failure,  it  is 
proper  to  refuse  to  extend  the  time.^  The  time  of  redemption 
was  extended  for  thirty  days,  where  the  decree  omitted  to  declare 
what  should  be  tlie  effect  of  an  omission  to  redeem,  although  the 
effect  of  such  decree  was,  the  court  declared,  that  if  the  plaintiff 
should  fail  to  pay  the  money  within  the  time  specified,  his  right 
to  redeem  would  be  barred.^  But  the  same  reasons  do  not  exist 
for  such  extension  of  the  time  that  exist  in  case  of  a  strict  fore- 
closure, because  in  redemption  the  plaintiff  should  be  prepared  to 
pay,  and  he  in  fact  proffers  payment  by  his  bill.^ 

Instead  of  a  decree  requiring  the  mortgagor  to  pay  the  debt 
by  a  given  day,  or  that  his  bill  shall  stand  dismissed,  the  practice 
has  sometimes  prevailed  in  Virginia  and  North  Carolina  to  order 
a  sale  of  the  property  and  the  payment  of  the  mortgage  out  of  the 
proceeds,  and  the  surplus  to  the  mortgagor.  The  defendant  may 
also  in  his  answer  ask  a  foreclosure.* 

1108.  If  a  mortgagor,  who  has  brought  a  bill  to  redeem, 
fails  to  pay  the  amount  found  due  within  the  time  ordered, 
and  the  mortgagee  obtains  judgment  for  costs,  the  mortgage  is 
foreclosed  without  any  formal  decree  dismissing  the  bill ;  ^  al- 
though, according  to  other  authorities,  a  final  decree  of  dismissal 
must  be  first  entered,  upon  the  ground  that  until  such  final  order 
is  entered  the  records  of  the  court  are  not  complete,  and  the 
plaintiff  may  come  in  with  an  application  to  have  the  time  within 
which  he  may  redeem  extended.^  The  decree  of  dismission  with 
costs  is  equivalent  to  a  decree  of  foreclosure,^  and  has  this  effect 
although  it  does  not  expressly  declare  it.^ 

If  the  plaintiff  after  obtaining  a  judgment  for  redemption  fails 
to  pay  the  amount  found  due  within  the  time  allowed,  his  bill  will 

1  Segrest  v.   Segrest,  38  Ala.  674 ;  Cil-         ^  Stevens  v.  Miner,  110  Mass.  57. 

Icy  V.  Huse,  40  N.  H.  358.  ^  Bolles  v.  Duff,  43  N.  Y.  469 ;  Smith 

2  Sherwood  v.  Hooker,  1  Barb.  (N.  Y.)     v.  Bailey,  10  Vt.  163. 

Ch.  650.  ^  Quin  V.  Brittain,  Hoff.  (N.  Y.)  Ch. 

8  Jenkins  V.  Eldredge,  1  Wood.  &  M.  61 ;  353  ;  Shannon  v.  Speers,  2  A.  K.  Marsh. 

Ferine  v.  Dunn,   4  Johns.   (N.   Y.)   Ch.  (Ky.)311. 

140.  ^  Bolles  V.  Duff,  43  N.  Y.  474 ;  Beach 

*  Turner  v.  Turner,  3  Munf.  ( Va.)  66 ;  v.  Cooke,  28  N.  Y.  535  ;  Ferine  v.  Dunn, 

Ingram    v.   Smith,    6   Ired.    (N.  C.)  Eq.  4  Johns.  (N.  Y.)  Ch.  140;    Sherwood  v. 

97  ;  Darvin  v.  Hatfield,  4  Sandf.  (N.  Y.)  Hooker,  1  Barb.  (N.  Y.)  Ch.  650. 
468 ;  Sutherland  v.  Rose,  47  Barb.  (N.  Y.) 
144. 

154 


PLEADINGS   AND   PRACTICE   ON   BILLS  TO   REDEEM.       [§§  1109-1111. 

be  dismissed  with  costs,  and  such  a  dismissal  amounts  to  a  fore- 
closure of  his  equity  of  redemption.^  It  is  dismissed  as  a  matter 
of  course  upon  motion  supported  by  affidavit  that  the  time  within 
which  the  plaintiff  was  allowed  to  redeem  has  expired,  and  the 
money  found  due  has  not  been  paid.^ 

1109.  Abandonment  of  suit.  —  A  mortgagor  of  land  subject 
to  two  mortgages  filed  a  bill  to  redeem  it  from  the  first  just  be- 
fore the  expiration  of  the  three  years  after  open  and  peaceable 
entry.  While  the  suit  was  pending,  and  after  the  three  years  ex- 
pired, the  first  mortgagee  executed  a  quitclaim  deed  of  the  land 
to  the  second  mortgagee.  It  was  held  that  upon  the  subsequent 
abandonment  of  the  suit  by  the  mortgagor  the  second  mortgagee 
succeeded  to  all  the  rights  of  the  first  mortgagee,  and  held  the 
estate  by  an  indefeasible  title  under  a  completed  foreclosure.^ 

1110.  Redemption  does  not  necessarily  extinguish  the  mort- 
gage title.  If  the  plaintiff  owns  every  other  interest  in  the  land 
there  is  a  merger  of  this  title  ;  but  if  there  are  intermediate  in- 
cumbrances, he  becomes  substituted  to  the  rights  and  interests  of 
the  original  mortgagee  ;  and  such  incumbrancer  must  redeem  of 
him  if  he  wishes  to  protect  his  own  interest.* 

1111.  The  general  rule  in  regard  to  costs  upon  a  suit  to  re- 
deem is  that  the  plaintiff,  instead  of  recovering  costs  himself, 
pays  them  to  the  defendant,  although  he  is  successful  in  the  suit.^ 
This  is  upon  the  principle  that  at  law  the  mortgage  is  forfeited, 
and  that  the  legal  estate  being  in  the  mortgagee  he  is  at  liberty 
to  deal  with  the  property  as  his  own.^  The  mortgagor,  on  the 
other  hand,  is  in  default ;  and  this  relief  in  equity  is  in  the  nature 
of  a  favor  conferred,  and  not  a  right  contracted  for.  An  excep- 
tion is  made  to  this  rule  where  the  defendant  sets  up  an  unwar- 
ranted defence,  or  one  which  wholly  fails,  and  thereby  makes 
delay  and  expense  in  prosecuting  the  redemption  ;  in  such  case 
the  defendant  may,  in  the  discretion  of  the  court,  be  compelled  to 

1  Bishop  of  Winchester  v.  Paine,  1 1  Ves.  *  Brainard  v.  Cooper,  1 0  N.  Y.  356. 
199;    Cholralcy  v.   Countess  of    Oxford,  ^  Harper  v.  Ely,  70  111.  581  ;  Slee  v. 
2  Atk.   267;    Ferine  r.  Dunn,  4  Johns.  Manhattan  Co.  1  Paige  (N.Y.), 48;  Brock- 
(N.  Y.)  Ch.  140.  way  v.  Wells,  lb.  617  ;  Benedict  v.  Oilman, 

2  McDonough  v.  Shewbridge,  2  Ba.  &  4  lb.  58  ;  Vroom  v.  Ditmas,  lb.  526  ;  Bean 
Be.  564  ;  Stuart  v.  Worrall,  1  Bro.  C.  C.  v.  Brackett,  35  N.  H.  88 ;  Phillips  v.  Hul- 
581.  sizer,  20  N.  J.  Eq.  308. 

«  Thompson  v.  Kcnyon,  100  Mass.  108.         «  Wetherell  v.  Collins,  3  Madd.  255. 

155 


§  1112.]  REDEMPTION   OF   A   MORTGAGE. 

pay  costs  to  the  plaintiff.^  If  tlie  amount  due  upon  the  mortgage 
is  in  dispute,  althougli  the  defendant  proves  to  be  in  error,  yet  if 
he  had  a  reasonable  ground  for  his  view  of  the  case  the  costs  will 
still  be  awarded  against  the  plaintiH".^ 

In  suits  to  redeem  costs  are  sometimes  not  allowed  to  either 
party  as  against  the  other.^  This  has  been  the  rule  adopted  by 
some  courts  where  the  plaintiff  before  bringing  his  suit  tendered 
the  amount  due  upon  the  mortgage,  and  any  costs  which  had  been 
incurred.'* 

If  a  tender  be  made  by  the  mortgage  debtor  after  the  bringing 
of  a  suit  to  foreclose,  as  the  amount  of  costs  in  an  equitable  suit 
for  the  purpose  is  discretionary  with  the  court,  he  can  only  make 
tender  of  such  costs  as  may  seem  to  him  reasonable,  and  upon 
refusal  apply  to  the  court  to  have  the  amoimt  of  costs  deter- 
mined.^ 

1112.  Under  a  statute  providing  that  the  plaintiff  bringing  a 
suit  to  redeem  without  a  previous  tender  shall  pay  the  costs 
of  suit,  unless  the  defendant  when  requested  has  neglected  or  re- 
fused to  render  a  just  and  true  account,  the  plaintiff  so  bringing 
suit  is  liable  for  costs,  although  the  defendant  be  liable  under  the 
usury  law  to  forfeit  threefold  the  unlawful  interest.^ 

In  Massachusetts  it  is  provided  by  statute  that  if  the  suit  is 
brought  without  a  previous  tender,  and  it  appears  that  anything 
is  due  upon  the  mortgage,  the  plaintiff  shall  pay  the  costs  of  suit, 
unless  the  defendant  has  unreasonably  refused  or  neglected,  when 
requested,  to  render  a  true  account  of  the  money  due  on  the  mort- 
gage, and  of  the  rents  and  profits,  or  has  in  any  way  prevented 
the  plaintiff  from  performing  or  tendering  performance  of  the 
condition  before  bringing  suit.  In  all  other  cases  the  court  may 
award  costs  to  either  party  as  equit}'^  may  require.'^  Under  these 
provisions  the  mortgagee  may  be  oi'dered  to  pay  the  plaintiff's 
costs  when  upon  request  for  an  account  he  has  failed  to  render 

1  Davis  V.  DuflBe,  18  Abb.  (N.  Y.)  Pr.  The  statute  providing  for  tender  to  a 
360;  Barton  v.  May,  3  Sandf.  (N.  Y.)  Ch.  plaintiff  to  stop  costs  is  confined  to  actions 
450.  at  law.     N.  Y.  F.  &  M.  Ins.  Co.  ?;.  Burrell, 

2  Sessions  v.  Richmond,  1  R.  I.  298.  9  How.  (N.  Y.)  Pr.  398. 

8  Green  v.  Wescott,  13  Wis.  C06.  e  Gerrish  v.  Black,  113  Ma.ss.  486  ;  99 

*  King  V.  Duntz,  11  Barb.  (N.  Y.)  191  ;  Mass.  31.5  ;  104  Mass.  400  ;   122  Mass.  76. 

Van   Buren   v.   Olmstead,    5    Paige    (N.  And  see  McGiiire  v.  Van  Pelt,  ^5  Ala. 

Y.),  9.                                                 "  344. 

6  Pratt  V.   Ramsdell,  16  How.  (N.  Y.)  7  Qen.  Stat.  c.  140,  §21. 

Pr.   59;    Bartow   v.    Cleveland,   lb.   364. 

156 


PLEADINGS    AND   PRACTICE    ON    BILLS   TO   REDEEM.       [§  1113. 

any  account,  or  has  rendered  an  untrue  one,  so  that  the  mortgao-or 
is  compelled  to  resort  to  a  suit.^  But  in  a  case  where  there  was 
no  tender,  and  the  account  rendered  by  the  mortgagee  was  in- 
correct only  because  it  contained  items  of  money  expended  for 
convenience  and  ornament  of  the  estate,  costs  were  allowed  to 
neither  party .^ 

There  is  a  similar  statute  in  Maine.^  As  the  law  now  stands  in 
this  state  no  suit  can  be  maintained  without  a  tender,  unless  the 
defendant  is  in  default  in  preventing  a  tender.  If  the  bill  is  sus- 
tained, the  plaintiff  is  in  all  cases  entitled  to  costs  as  a  strict  legal 
right.^ 

What  constitutes  a  sufficient  demand  and  refusal  to  account 
under  this  statute  depends  upon  the  particular  circumstances  ; 
thus  when  the  mortgagor  made  a  demand  on  the  mortgagee  at  a 
store  two  miles  distant  from  his  residence  to  render  an  account,  to 
which  the  reply  was  that  about  eleven  hundred  dollars  was  due, 
and  the  mortgagee,  when  afterwards  requested  to  render  a  more 
particular  account,  replied  that  he  would  not  until  obliged,  no  ob- 
jection being  made  to  the  place  of  demand,  it  was  considered  suffi- 
cient to  sustain  a  bill  to  redeem  brought  four  years  afterwards.^ 

1113.  A  mortgagee  who  has  refused  a  tender  of  a  sum  suffi- 
cient to  cover  principal,  interest,  and  costs,  will  be  compelled  to 
pay  the  costs  of  a  suit  to  redeem.^ 

The  costs  of  a  suit  to  foreclose  a  prior  mortgage  are  not  charge- 
able to  a  junior  mortgagee  who  was  not  a  party  to  it,  when  he 
redeems.'' 

1  Montague  y.  Phillips,  16  Gray  (Mass.),         *  Dinsmore  v.  Savage,  supra. 
566  ;  Pease  v.  Benson,  28  Me.  336  ;  Koby         5  Wallace  v.  Stevens,  66  Me.  190. 

V.  Skinner,  34  Me.  270;    Sprague  v.  Gra-  6  Grngeon  v.  Gerrard,  4  Y.  &  C.  Exch. 

hana,  38  Me.  328  ;  Dinsmore  y.  Savage,  68  Ca.  128;   Harmer  v.  Priestley,  16  Bcav. 

Me.  191.  569. 

2  Woodward  v.  Phillips,  14  Gray  7  Qage  v.  Brewster,  31  N.  Y.  218,  re- 
(Mass.),  132.  versing  S.  C.  30  Barb.  387. 

8  R.  S.  1871,  C.90,  §  13;  Dinsmore  v. 
Savage,  supra. 

157 


CHAPTER   XXIII. 


MOHTGAGEE  S   ACCOUNT. 


I.  Liability  to  account,  1114-1120. 
II.  What   the   mortgagee   is   chargeable 

with,  1121-1125. 
III.  Allowances  for  repairs  and  improve- 
ments, 1126-1131. 


IV.  Allowances  for  compensation,  1132- 

1133. 
V.  Allowances  for  disbursements,  1134- 

1138. 
VI.  Annual  rests,  1139-1143. 


1.  Liability  to  Account. 

1114.  In  general.  —  A  mortgagee  in  possession,  whether  in  per- 
son or  by  a  tenant,  is  accountable  for  the  rents  and  profits  of  the 
estate,  and  is  bound  to  apply  them  in  reduction  of  the  mortgage 
debt.i  After  paying  the  interest  of  the  debt  any  balance  of  re- 
ceipts is  apphcable  to  reduce  the  principal.^  The  mortgagee  is 
not  allowed  to  make  a  profit  out  of  his  possession  of  the  estate. 
Therefore,  upon  a  redemption  of  the  mortgaged  premises  by  any 
one  interested  in  them  he  is  obliged  to  state  an  account  of  his  re- 
ceipts from  the  mortgaged  property,  and  he  is  entitled  to  allow- 
ances for  all  proper  disbursements  made  by  him  in  respect  of  the 
pi-emises.  The  principles  upon  which  this  account  should  be 
stated  it  is  the  purpose  of  this  chapter  to  set  forth.  The  subject 
is  of  much  less  general  importance  than  it  formerly  was,  for  the 
reason  that  it  is  comparatively  seldom  now  that  the  mortgagee 
takes  possession.  In  many  states,  as  already  noticed,  the  mort- 
gagee is  prohibited  by  statute  from  entering  or  in  any  way  ac- 
quiring possession  before  a  foreclosure  and  sale.  In  other  states, 
power  of  sale  mortgages  and  trust  deeds  are  in  common  use,  and 
upon  a  default  a  speedy  sale  of  the  property  may  be  had,  so  that 
there  is  not  generally  any  occasion  for  the  mortgagee  to  take  pos- 
session of  the  mortgaged  estate. 


1  Harrison  v.  Wyse,  24  Conn.  1 ;  Kel- 
logg V.  Rockwell,  19  Conn.  446  ;  Reiten- 
baughy.  Ludwick,  31  Pa.  St.  131  ;  Breck- 
enridge  v.  Brook,  2  A.  K.  Marsh.  (Ky.) 
335;  Tharp  V.  Feltz,  6  B.  Mon.  (Ky.)  6; 
158 


Anthony  v.  Rogers,  20  Mo.  281  ;    Chap- 
man V.  Porter,  69  N.  Y.  276. 

2  McConnel  v.    Holobush,    11    111.   61; 
"Walton  V.  Withington,  9  Mo.  545. 


LIABILITY    TO   ACCOUNT.  [§§  1115,  1116. 

1115.  A  matter  of  equitable  jurisdiction.  —  It  is  apparent 
enough  that  where  the  English  doctrine  prevails  that  the  mort- 
gage coiiveys  a  legal  title,  the  right  of  the  mortgagor  to  an  account 
of  the  rents  and  profits  of  the  land  received  by  the  mortgagee  is 
purely  and  exclusively  of  equitable  cognizance.  At  law  he  can- 
not be  made  to  account.  He  is  the  legal  owner  of  the  estate,  and 
takes  the  rents  and  profits  in  that  character.  The  mortgagor  has 
a  right  of  redemption  only  in  equity,  and  the  right  to  an  account 
is  only  incident  to  this.  But  regarding  the  mortgagee's  interest 
as  a  lien  only  does  not  obviate  the  necessity  of  resorting  to  equity 
for  an  accounting.^  The  mortgagee  in  possession  takes  the  rents 
and  profits  in  the  quasi  character  of  trustee  'or  bailiff  of  the  mort- 
gagor. In  equity  he  must  apply  them  as  an  equitable  set-off  to 
the  amount  due  on  the  mortgage.  Such  a  receipt  is  not  a  legal 
satisfaction  of  the  mortgage.  There  is  no  payment  and  satisfaction 
of  the  mortgage  until  the  rents  and  profits  are  applied  to  the  pay- 
ment of  the  debt.  The  law  does  not  apply  them  as  they  are  re- 
ceived. "  It  depends  upon  the  result  of  an  accounting  upon  equi- 
table principles  whether  any  part  of  the  rents  and  profits  received 
shall  be  so  applied.  The  mortgagee  is  entitled  to  have  them  ap- 
plied, in  the  first  instance,  to  reimburse  him  for  taxes  and  neces- 
sary repairs  made  upon  the  premises ;  for  sums  paid  by  him  upon 
prior  incumbrances  upon  the  estate,  in  order  to  protect  the  title, 
and  for  costs  in  defending  it ;  and  if  he  has  made  permanent  im- 
provements upon  the  land,  in  the  belief  that  he  was  the  absolute 
owner,  the  increased  value  by  reason  thereof  may  be  allowed  him. 
In  many  cases  complicated  equities  must  be  determined  and  ad- 
justed before  it  can  be  ascertained  what  part,  if  any,  of  the 
rents  and  profits  received  is  to  be  applied  upon  the  mortgage  debt. 
In  the  absence  of  an  agreement  between  the  parties,  there  is  no 
legal  satisfaction  of  the  mortgage  by  the  receipt  of  rents  and  prof- 
its by  a  mortgagee  in  possession,  to  an  amount  sufficient  to  satisfy 
it,  and  his  character  as  mortgagee  in  possession  is  not  divested 
until  they  are  applied  by  the  judgment  of  the  court  in  satisfaction 
of  the  mortgage."  '^ 

1116.  The  mortgagee  chargeable  only  upon  redemption.  — 
The  mortgagor's  right  to  hold  the  mortgagee  to  account  for  rents 
and  profits  of  the  mortgaged  premises,  or  for  waste  done  to  them, 

1  Ilubbell  V.  Moulson,  53  N.  Y.  225.  '^  Per  Mr.  Justice  Andrews,  in  Ilubbell  • 

V.  Moulson,  53  N.  Y.  225. 
159 


§  1116.]  mortgagee's  account. 

must  be  enforced  in  equity  and  not  by  suit  at  law.^  He  is  not 
chargeable  so  long  as  the  premises  are  not  redeemed.  He  is  the 
legal  owner  of  the  estate,  and  his  accountability  for  rent  is  inci- 
dent only  to  the  right  in  equity  to  redeem.  There  may  be  a  spe- 
cial agreement  between  the  parties  that  the  mortgagee  shall  pay 
rent ;  he  may  be  a  lessee  of  the  premises  ;  but  after  the  expi- 
ration of  the  term  of  his  tenancy,  there  is  no  implication  of  an 
agreement  to  continue  to  pay  rent.^  If  an  estate  under  lease  for 
a  term  of  years  be  mortgaged  to  the  lessee  in  fee,  unless  the 
mortgagee  voluntarily  pays  the  rent,  or  the  mortgage  makes  spe- 
cial provision  that  he  shall  hold  possession  in  the  capacity  of  les- 
see, the  rent  is  suspended  until  the  condition  be  performed,  or  the 
estate  redeemed.  Upon  redemption,  of  course,  the  lessee,  during 
the  term  of  the  lease,  will  be  accountable  as  mortgagee  for  the 
profits.  If,  however,  he  voluntarily  pay  the  rent  during  such 
term,  he  is  not  afterwards  accountable  for  the  same  as  mort- 
gagee.^ 

A  mortgagor  who  has  paid  the  mortgage  debt  without  requir- 
ing the  mortgagee  to  account  for  rents  received  by  him  while  he 
was  in  possession  cannot  afterwards  maintain  an  action  against 
him  for  use  and  occupation  ;  but  he  may  maintain  an  action  for 
money  had  and  received  to  recover  back  the  amount  overpaid, 
which  ought  to  have  been  allowed  for  rent ;  ^  and  if  the  rents  and 
profits  exceed  the  amount  of  the  debt  and  interest,  the  excess 
may  be  recovered.^ 

An  action  of  trespass  quare  clausum  will  not  lie  by  a  mort- 
gagor against  his  mortgagee  for  entering  and  harvesting  the 
growing  crops.  These  are  vested  in  the  mortgagee,  and  he  is 
entitled  to  them  as  a  part  of  his  security  ;  and  is  liable  to  ac- 
count for  them  only  in  equity  upon  a  redemption.^  The  objec- 
tion to  such  action  does  not  lie  when  there  is  an  agreement  be- 
tween the  parties  which  makes  the  mortgagor  a  tenant  of  the 
mortgagee.^ 

1  Farrant  v.  Lovel,  3  Atk.  723  ;  Dexter         »  Nowall  v.  Wright,  3  Mass.  138. 

r.  Arnold,  2  Sum.  124;  Gordon  v.  Hobart,         *  Wood  v.  Felton,  9  Tick.  (Mass.)  171 ; 

2  Story,  243 ;    Seaver  v.  Durant,  39  Vt.  see,   however,   Barrett   v.   Blackmar,    47 

103;  Chapman  v.  Smith,'9  "Vt.  153  ;  Giv-  Iowa,  505. 

ens   V.  McCalmot,    4  Watts    (Pa.),  464  ;         5  Freytag  v.  Hoelatid,  23  N.  J.  Eq.  36. 
Bell  V.  Mayor  of  N.  Y.  10  Paige  (N.  Y.),         6  Oilman   v.   Wills,    66   Me.    273,   and 

49.  cases  cited  ;  Reed  v.  Elwell,  46  Me.  270. 

2  Weeks  v.  Thomas,  21  Me.  465.  ^  Marden  v.  Jordan,  65  Me.  9. 

160 


LIABILITY   TO    ACCOUNT.  [§§  1117,  1118. 

1117.  A  grantee  in  possession  under  a  deed  absolute  in  form, 
but  given  by  way  of  security  merely,  is  said  not  to  stand  exactly 
in  the  same  position,  in  reference  to  accounting,  as  an  ordinary 
mortgagee  in  possession ;  inasmuch  as  he  is  the  agent  of  the 
mortgagor  as  well  as  mortgagee,  and  is  chargeable  for  any  failure 
to  obtain  the  full  rental  value  of  the  premises  only  on  the  same 
grounds  that  an  agent  would  be.^  If  the  grantee  has  good  rea- 
son to  consider  himself  possessed  of  an  absolute  estate  in  the  land, 
and  he  consequently  makes  permanent  improvements,  he  will  be 
entitled  to  allowance  for  these  when  a  mortgagee  generally  would 
not  be  entitled  to  such  allowance.^ 

But  ordinarily  the  same  rules  for  accounting  are  held  to  apply 
in  such  case ;  the  mortgagee  is  compelled  to  account  for  the  rents 
and  profits,  and  he  may  be  allowed  for  necessary  and  proper  re- 
pairs, but  not  for  costly  improvements,  unless  these  be  made  with 
the  mortgagor's  consent,  however  beneficial  they  may  be.  But  if 
such  improvements  are  made  in  good  faith  on  the  part  of  the 
mortgagee,  under  the  belief  that  he  owns  the  property  absolutely, 
he  may  be  allowed  for  thein.^ 

1118.  A  mortgagee  is  equally  liable  to  account  whether  his 
possession  be  before  or  after  the  law  day,  unless  there  is  some 
agreement  to  the  contrary.*  An  equitable  mortgagee  is  under  the 
same  obligation  to  account  that  a  legal  mortgagee  is.^  Where  re- 
demption is  allowed  after  a  foreclosure  sale,  if  the  mortgagee  pur- 
chases and  enters  into  possession  he  must  account  for  the  rents 
and  profits.^ 

A  mortgagee  who  has  entered  into  possession  and  received  the 
rents  and  profits  of  the  mortgaged  premises,  and  afterwards  pur- 
chased the  equity  of  redemption,  is  still  liable,  so  far  as  a  subse- 
quent mortgagee  is  concerned,  to  account  for  the  rents  and  profits 
of  the  premises  received  while  he  occupied  as  mortgagee.  When 
the  second  mortgagee  applies  to  redeem  a  prior  mortgage  he 
stands  in  the  same  position  as  the  mortgagor,  and  is  bound  to  pay 
no  greater  sum  than  the  mortgagor  would  pay." 

1  Barnard  v.  Jennison,  27  Mich.  230.  Pennsylvania  arc  reviewed  and  the  law  on 

2  Ilarper'.s  Ajjpeal,  64  I'a.  St.  315.  thi.s  point  clearly  stated. 

"  There  is  a  manifest  distinction,"  says         ^  Cookes  v.  Culbertson,  9  Nev.  199. 
Judge  Sharswood, "  between  the  two  cases         ^  Uavis  v.  Lassiter,  20  Ala.  561. 
in  reason  and  justice,  which  are  controlling         ^  Brayton  v.  Jones,  5  Wis.  117. 
guides  in  a  court  of  equity,  where  no  posi-         ^  Ten    Eyck  v.  Casad,   15  Iowa,  524; 
live  rule  of  law  intervenes."     The  cases  in     and  see  Hill  i;.  Hcwett,  35  Iowa,  563. 

''  Harrison  v.  Wyse,  24  Conn.  1. 

VOL.  II.  11  H^^ 


§§  1119,  1120.]  mortgagee's  account. 

A  jnortgagee  in  possession  after  default  is  presumed  to  be  in 
possession  in  his  character  of  mortgagee,  and  as  such  to  be  liable 
to  account  for  rents  and  profits  ;  and  such  is  the  presumption,  al- 
though he  first  occupied  as  a  tenant  for  a  fixed  term,  and  while  so 
occupying  pui-chased  the  mortgage,  and  remained  in  possession 
after  the  expiration  of  his  term  ;  he  is  presumed  to  be  in  occupa- 
tion as  a  mortgagee,  and  not  as  a  tenant  holding  over.^ 

The  mortgagee  must  account  for  the  rents  and  profits  received 
by  him  after  a  decree  of  strict  foreclosure  upon  a  redemption 
within  the  time  allowed  by  the  decree.^  A  purchaser  at  a  fore- 
closure sale,  which  is  defective  by  reason  that  a  junior  mortgagee 
was  not  made  a  party  to  the  bill,  must  account  for  the  rents 
and  profits  upon  a  subsequent  redemption  by  the  latter,  if  such 
sale  operates  merely  as  an  assignment  of  the  mortgage  ;  ^  but  if 
it  operates  not  only  as  an  assignment  of  the  prior  mortgage,  but 
as  a  foreclosure  of  the  equity  of  redemption  subject  to  the  junior 
mortgage,  the  purchaser  standing  in  the  place  of  the  mortgagor 
or  owner  of  the  premises  is  not  liable  to  account  for  the  rents  and 
profits.  If  the  junior  mortgagee  wishes  to  secure  these,  he  must 
obtain  the  appointment  of  a  receiver  upon  showing  the  insuffi- 
ciency of  his  security.* 

1119.  An  assignee  stands  in  the  place  of  his  assignor  in  re- 
spect to  the  account,  whether  he  be  an  assignee  of  the  mortgage 
or  of  the  equity  of  redemption.  The  mortgagee's  liability  to  ac- 
count to  the  mortgagor  for  the  rents  and  profits,  less  the  amount 
paid  for  taxes  and  repairs,  attaches  to  the  assignee  of  the  mort- 
gage, and  the  assignee  of  the  mortgagor  acquires  the  rights  of  the 
latter  in  this  respect.^  A  transfer  of  the  equity  of  redemption 
while  the  mortgagee  is  in  possession  necessarily  carries  with  it  to 
the  purchaser  the  right  to  an  account  for  the  rents  and  profits 
of  the  premises,  as  an  incident  to  the  right  of  redemption,  both 
those  received  by  the  mortgagee  before  the  sale  and  those  re- 
ceived afterwards.^ 

1120.  So  long  as  the  mortgagee  refrains  from  taking  pos- 
session, he  has  no  right  to  the  rents  and  profits  received  by  the 

1  Anderson  v.  Lanterman,  27  Ohio  St.         *  Ten  Eyck  v.  Casad,  15  Iowa,  524. 
104;    Moore  v.  Degraw,  1  Halst.  (N.  J.)         *  Kenard  v.  Brown,  7  Neb.  449. 
Ch.346  ;  Billiard  v.  Allen, 4  Cushi  (Mass.)         &  Strang  v.  Allen,  44  111.  428. 

532.  ^  Kucknian  v.  Astor,  9  Paige  (N.  Y.), 

2  Ruckman  u.  Astor,  9  Paige  (N.  Y.),     517;   and  see   Gelston   v.    Thompson,  29 
517;  see  Chapman  v.  Smith,  9  Vt.  153.         Md.  595. 

162 


WHAT   THE   MORTGAGEE   IS   CHARGEABLE   WITH.        [§  1121. 

mortgagor  or  any  one  under  him  ;  and  although  there  has  been  a 
breach  of  the  condition,  the  owner  of  the  equity  of  redemption 
cannot  be  called  upon  to  account.^  He  may  redeem  without  pay- 
ing rent,  even  when  he  has  been  allowed  to  remain  in  possession 
under  an  agreement  to  pay  to  the  mortgagee  a  stipulated  rent, 
because  the  mortgage  does  not  secure  the  rent.  The  agreement 
to  pay  this  is  merely  personal.^ 

But  it  has  been  held  that  when  the  mortgaged  premises  have 
been  devised  by  an  insolvent  owner  to  the  mortgagee,  and  he  has 
entered  as  devisee,  the  creditors  of  the  estate  have  the  right  to 
demand  an  account  from  him  of  the  rents  and  profits.^ 

A  mortgagor  in  possession  is  not  bound  to  rebuild  structures 
destroyed  by  fire,^  or  to  repair  the  premises  when  they  have  been 
injured  without  his  default.^ 

2.    What  the  Mortgagee  is  chargeable  with. 

1121.  A  mortgagee  allowing  the  mortgagor  to  remain  in 
occupation  after  the  former  has  taken  possession  for  the  purpose 
of  foreclosure  does  not  necessarily  render  himself  accountable  for 
rents  and  profits.  If  the  mortgagor  is  permitted  to  remain  in 
occupation,  and  to  take  the  profits,  of  course  the  mortgagee  is  not 
accountable  for  them  to  him  ;  ^  nor  has  a  second  mortgagee  in 
such  case  any  claim  upon  the  first  mortgagee  to  account  after 
formal  possession  taken  by  the  former.  The  second  mortgagee 
may  take  possession  as  against  the  mortgagor  if  the  latter  holds 
in  his  own  right,  and  thus  exclude  him  and  take  the  rents  and 
profits  to  his  own  use.  If  the  first  mortgagee  should  by  previous 
entry  and  actual  occujjation,  or  by  virtue  of  his  superior  title,  pre- 
vent the  second  mortgagee  from  making  entr}^  then  he  would  be 
held  to  account,  in  favor  of  the  second  mortgagee,  for  the  rents 
and  profits."     A  second  mortgagee  has  also  the  full  power  in  any 

1  Colraan    v.   Duke  of    St.    Albans,   3         '  Chalabre  v.  Cortelyou,  2  Paige  (N. 
Ves.  25  ;   Higgins  v.  York  Buildings  Co.  2     Y.),  605. 

Atk.  107  ;  Drummond  v.  Duke  of  St.  Al-  *  Reid    v.    Bank    of    Tenn.    1     Sneed 

bans,  5  Ves.  438;    Hele  v.  Lord  Bexley,  (Tenn.),  262. 

20  Beav.  127;  Johnson  v.  Miller,  1  Wils.  ^  Campbell  v.  Macomb,  4  Johns.   (N. 

(Ind.)    416;    Butler     v.    Page,    7     Met.  Y.)  Ch.  .534. 

(Mass.)  40,  42.  ''  Reynolds  v.  Canal  &  Banking  Co.  of 

2  Merritt  v.  Hosmer,  11  Gray  (Mass.),  N.  O.  30  Ark.  520. 

276 ;  and  see  Chase  v.  Palmer,  25  Me.  ''  Coppring  v.  Cooke,  1  Vern.  270 ;  De- 
341  ;  Davenport  v.  Bartlett,  9  Ala.  179  ;  marest  v.  Berry,  16  N.  J.  Eq.  481  ;  Hitch- 
Gilman  v.  Wills,  66  Me.  273.  cock  v.  For  tier,  65  111.  239. 

163 


§  1122.]  mortgagee's  account. 

case  to  protect  himself,  by  paying  off  tlie  first  moi'tgage  and  tak- 
ing entire  control  of  the  mortgaged  premises.  The  taking  of 
formal  possession  and  the  recording  of  the  certificate  in  the  reg- 
istry of  deeds  does  not  estop  the  first  mortgagee  to  show  that  he 
was  not  in  actual  possession,  nor  does  his  formal  entry  imply  a 
continued  possession  under  such  entry  ;  and  if  a  second  mortgagee 
would  charge  the  first  with  the  rents  and  profits,  he  should  at- 
tempt to  enter  under  his  own  mortgage,  or  should  tender  the 
debt  due  to  the  first  mortgagee.^ 

As  against  a  purchaser  from  the  mortgagor,  the  mortgagee  has 
no  right  to  allow  any  one,  as,  for  instance,  the  widow  of  the  mort- 
gagor, to  occupy  the  premises  or  any  part  of  them  without  paying 
rent.  He  is  liable  to  account  for  the  whole  profits  of  the  estate, 
after  allowing  a  reasonable  time  to  gain  possession  by  legal  process.^ 

A  mortgagee  is  not  accountable  to  a  subsequent  incumbrancer 
or  purchaser  for  the  rent  of  a  house  of  which  he  has  taken  formal 
possession  for  the  purpose  of  foreclosure,  when  the  house  is  occu- 
pied under  of  a  claim  of  right  adversely  to  him  :  as,  for  instance, 
when  occupied  by  the  mortgagor  and  his  family  under  a  home- 
stead right  not  released  in  the  mortgage.^  But  if  the  mortgagor 
has  a  right  of  homestead  in  a  part  of  the  mortgaged  premises, 
which  right  he  has  released  in  a  first  mortgage  but  not  in  a 
second,  the  first  mortgagee  having  taken  actual  possession  for  the 
purpose  of  foreclosure,  and  allowed  the  mortgagor  to  occupy  the 
homestead,  is  accountable  to  the  second  mortgagee  for  the  rent  he 
might  have  obtained  for  the  homestead.* 

1122.  Where  the  mortgagee  has  himself  occupied  and  im- 
proved the  estate  in  person,  the  value  of  the  occupation  must  nec- 
essarily be  determined  by  evidence  of  experts  as  to  what  ought  to 
have  been  received  for  the  rent  of  the  property  ;  ^  and  such  evi- 
dence is  also  admissible  in  cases  where  the  mortgagee,  not  being 
himself  in  possession,  has  kept  false  accounts  or  no  accounts  of 
rents  received,  or  there  is  such  misconduct  of  any  kind  on  his  part 

1  Bailey  v.  Myrick,  52  Me.  132  ;  Charles  '"  Smart  v.  Hunt,  1  Verii.  418  ;  Trulock 
V.  Dunbar,  4  Met.  (Mass.)  498.  v.  liobey,  15  Sim.  2G5 ;  Johnson  v.  Miller, 

2  Thayer  v.  Richards,  19  Pick.  (Mass.)  1  Wils.  (lud.)  416;  Montgomery  v.  Chad- 
398.  wick,   7  Iowa,    114;  Moore  y.  Degraw,  5 

8  Taft  V.  Stetson,  117  Mass.  471  ;  Sil-     N.  J.  Eq.  (1    Halst.)  346;  Van  Buren  v. 
loway  V.  Brown,  12  Allen  (Mas'*.),  30.  Olmstead,  5  Paige  (N.  Y.),  9. 

*  Richardson  v.  Wallis,  5  Allen  (Mass.), 
78. 

1G4 


WHAT   THE   MORTGAGEE   IS   CHARGEABLE   WITH.        [§  1123. 

as  makes  a  resort  to  this  kind  of  evidence  necessary.  But  the 
mere  fact  that  the  mortgagee  resides  at  a  distance,  and  must  rely 
upon  agents  to  manage  the  estate,  should  not  make  evidence  of 
experts  that  a  higher  rent  could  have  been  received  admissible  to 
charge  him  with  a  greater  amount  of  rent  than  he  has  received.^ 

If  a  mortgagee  himself  occupies  the  premises,  especially  if  they 
consist  of  a  farm  under  cultivation,  upon  which  labor  and  money 
must  be  bestowed  to  produce  annual  crops,  he  will  be  charged 
with  such  sums  as  will  be  a  fair  rent  of  the  premises  without 
regard  to  what  he  may  realize  as  profits  from  the  use  of  it.  The 
expenditures  necessary  to  carry  on  a  farm,  and  the  profits  derived 
from  it,  are  so  wholly  within  the  knowledge  of  the  occupant  that 
it  would  be  impossible  for  the  mortgagor  to  show  the  account  to 
be  wrong,  except  in  the  result.^ 

What  is  a  reasonable  rent  is  a  matter  to  be  determined  from  a 
consideration  of  all  the  circumstances  of  the  case.  The  price  that 
might  be  obtained  by  a  letting  at  public  auction  is  not  necessarily 
a  proper  criterion  ;  for  in  many  cases  such  a  rent  would  be  no  just 
standard  of  the  real  value  of  the  rent. 

1123.  As  a  general  rule  the  mortgagee  in  possession  is  held 
to  the  exercise  of  such  care  and  diligence  as  a  provident 
owner  in  charge  of  the  property  would  exercise  ;  but  he  will  not 
be  held  accountable  for  anything  more  than  the  actual  rents  and 
profits  received,  unless  there  has  been  wilful  default  or  gross  neg- 
ligence on  his  part.^  It  is  the  fault  of  the  mortgagor  that  he  lets 
the  land  fall  into  the  hands  of  the  mortgagee,  and  the  mortgagor 
should  be  required  to  prove  actual  fraud  or  negligence  on  the  part 
of  the  mortgagee  before  he  can  be  charged  for  more  than  his 
actual  receipts  of  rents  and  profits. 

He  will  not  be  held  to  account  according  to  the  value  of  the 
property,  but  for  what  he  should  with  reasonable  care  and  atten- 
tion have  received.  Neither  is  he  required  to  enter  into  any  spec- 
ulations for  the  benefit  of  the  mortgagor,^  but  to  protect  the  prop- 

1  Gcn-ish  v.  Black,  104  Mass.  400.  ley,  61  Me.  316  ;  Van  Buren  v.  Olmstead, 

2  Sanders  v.  Wilson,  34  Vt.  318.  5  Paige  (N.  Y.),  8;  Quinn  v.  Brittain,  3 
2  Parkinson    v.   Ilanhury,  L.   R.  2   H.     Edw.  (N.  Y.)  314;  Moore  v.  Titman,  44 

of  Lords,  1  ;  Hughes  v.  Williams,  12  Ves.  111.  367;  Strang  v.  Allen,  lb.  428;  liar- 

493 ;  Shaeffer  v.  Chambers,  2   Ilalst.  (N.  per  v.  Ely,  70  111.  581  ;  Montague  v.  Bos- 

J.)  Eq.  548 ;  Walsh  v.  Rutgers  Eire  Ins.  ton  &  Albany  R.  R.  Co.  124  Mass.  242. 
Co.   13  Abb.   (N.  Y.)  Pr.  33;  Barron   v.         *  Hughes   v.   Williams,    12   Ves.   493; 
Paulling,  38  Ala.  292;  Milliken  v.   Bai- 

165 


§  1123.]  mortgagee's  account. 

ert)^  as  it  is,  and  to  obtain  from  it  what  returns  it  will  yield  under 
prudent  management. 

If  the  mortgagee  suffers  a  notoriously  insolvent  tenant  to  re- 
main in  possession  he  is  accountable  for  the  rent  during  such  time, 
deducting  the  time  reasonably  necessary  to  expel  him  by  legal 
means,  and  to  obtain  a  responsible  tenant."^  It  is  wilful  default 
on  the  part  of  the  mortgagee  to  allow  a  tenant  to  remain  in  pos- 
session several  years  without  paying  rent,  and  without  any  de- 
mand upon  him  for  it.^  He  may  also  render  himself  liable  for  the 
rents  and  profits  by  assigning  the  premises  to  an  insolvent  person, 
and  putting  him  in  possession.^  A  mortgagee  is  liable  for  rent 
lost  or  not  collected  through  the  wilful  or  gross  negligence  of  his 
agent,  although  ordinary  and  proper  care  was  exercised  in  the 
selection  of  the  agent.* 

If  he  has  lost  rent  which  he  should  have  received,  as,  for  in- 
stance, by  refusing  a  higher  rent  from  a  responsible  tenant,  or  by 
turning  out  without  sufficient  cause  a  responsible  tenant,  and  then 
getting  less  rent  or  none  at  all,  he  is  chargeable  with  the  rent  lost. 
If  the  mortgagor  is  aware  that  a  higher  rent  may  be  obtained,  he 
should  inform  the  mortgagee  of  the  fact ;  and  his  neglect  to  do  so 
may  prevent  his  charging  the  mortgagee  with  such  higher  rent.^ 
But  when  the  mortgagee  in  the  exercise  of  a  reasonable  discre- 
tion and  care  has  already  agreed  upon  the  terms  of  a  lease,  he  is 
not  chargeable  with  a  higher  rent  for  the  reason  that  the  mort- 
gagor or  any  one  else  offers  a  higher  rent.® 

It  has  been  suggested  that  when  the  mortgagee  is  unable  to  pro- 
cure a  tenant  for  a  large  farm,  it  may  be  his  duty  to  cause  it  to 
be  tilled  in  accordance  with  good  ordinary  husbandi-y.'^ 

A  mortgagee  having  properly  rented  the  premises  to  a  tenant 
is  not  accountable  for  damages  done  to  the  estate  without  his 
knowledge  ;  or  for  wood  cut  and  used  on  the  premises  for  fire- 
wood by  such  tenant.^ 

But  he  must  account  for  waste  committed  by  him  while  person- 

Rowe  V.  "Wood,  2  J.  &  W.  553,  in  relation  ^  Hughes  v.  Williams,  12  Ves.  493  ;  Mon- 
te working  a  mine.  tague  v.  Boston  &  Albany  R.  R.  Co.  supra. 

1  Miller  v.  Lincoln,  6  Gray  (Mass.),  ^  Hulibard  v.  Shaw,  12  Allen  (Mass.), 
556.  120.     See  Montague  v.  Boston  &  Albany 

2  Brandon  v.  Brandon,  10  "W.  R.  287.  R.  R.  Co.  supra. 

»  Hagthrop  v.  Hook  1  Gill  &  J.  (Md.)  ^  ShaeflFer  v.    Chambers,   2    Halst.   (N. 

270.  J-)  Eq.  548. 

*  Montague  v.  Boston  &  Albany  R.  R.  ^  Hubbard  v.  Shaw,  12  Allen   (Mass.), 

Co.  124  Mass.  242.  120;  Onderdonk  v.  Gray,  19  N.  J.  Eq.  65. 
166 


WHAT   THE   MORTGAGEE   IS   CHARGEABLE   WITH.       [§§  1124,  1125. 

ally  in  possession.^  When  the  security  is  insufficient,  he  will  not 
be  enjoined  from  cutting  timber  or  opening  a  mine.  So  long  as 
he  does  not  commit  wanton  destruction,  he  may  also  clear  and 
cultivate  the  land.^  He  is  entitled  to  make  the  most  of  the  prop- 
erty for  the  purpose  of  realizing  what  is  due  to  him.  He  has  only 
to  account  for  the  proceeds  of  the  pi-operty.^ 

1124.  If  the  mortgagee  has  kept  no  proper  accounts  of  the 
rents  and  profits  received  by  him,  he  is  chargeable  with  what  he 
might  have  received,  and  must  be  presumed  to  have  received  by 
the  use  of  ordinary  care.^  If  the  mortgagee  be  unable  to  render 
an  account,  he  is  chargeable  with  a  fair  occupying  rent.^ 

The  account  must  include  all  rents  received  from  the  time  of 
the  mortgagee's  entry  into  possession.^  Although  redemption  is 
sought  by  one  having  only  a  limited  interest  in  the  property,  as, 
for  instance,  a  right  of  dower,  the  mortgagee  is  liable  to  account 
not  merely  from  the  time  of  the  demand  upon  him,  but  from  the 
date  of  his  entry.''' 

1125.  A  mortgagee  may  work  a  mine  upon  the  mortgaged 
property,  if  the  work  be  carried  on  in  a  proper  manner.^  Of 
course  the  product,  less  the  expense  of  working  it,  must  be  ap- 
plied to  the  payment  of  the  mortgage  debt.  But  he  would  not  be 
justified  in  improving  a  mine  by  a  large  expenditure,  or  at  most 
to  advance  more  for  this  purpose  than  would  a  prudent  owner.^ 
A  mortgagee  may  even  open  a  new  mine  when  the  mortgaged 
estate  is  of  insufficient  value  aside  from  the  mine  ;  and  he  is 
chargeable  with  only  the  net  profits  of  working  it.^^  But  if  the 
property  is  otherwise  sufficient,  the  mortgagee  has  no  right  to 
open  and  work  mines,  and,  if  he  does  so,  will  be  charged  with 
the  gross  receipts,  without  any  allowance  for  the  expenses  of 
working.^^ 

1  Sandon  v.  Hooper,  6  Beav.  246 ;  «  Lnpton  v.  Almy,  4  Wis.  242  ;  Acker- 
Hornby  V.  Matcham,  16  Sim.  325  ;  Lord  man  v.  Lyman,  20  Wis.  454  ;  Reynolds  v. 
Midleton  v.  Eliot,  15  Sim.  .531  ;  Onder-  Canal  &  Banking  Co.  of  N.  O.  30  Ark. 
donk  V.  Gray,  19  N.  J.  Eq.  65.  520. 

2  Morrison  v.  McLeod,  2  Ired.  Eq.  (N.  ''  Dela  v.  Stanwood,  62  Mc.  574. 

C.)  108.  8  Irwin  v.  Davidson,  3  Ired.  (N.  C.)  Eq. 

8  Millctt  r.   Davey,  31   Beav.  470,  per  311. 
Romilly,  M.  R.  "  Rowe  v.  Wood,  2  J.  &  W.  553,  556. 

*  Dexter  v.  Arnold,  2  Sum.  108;  Van         ^'>  Millett  v.  Davey,  31  Beav.  470. 
Buren  v.  Olmstead,  5  Paige  (N.  Y.),  9.  "  Millett  y.  Davey,  SM/)ra;  and  see  Hood 

5  Montgomery    v.    Chadwiek,    7    Iowa,  v.  Easton,  2  Giff.  692  ;  2  Jiir.  N.  S.  729. 
1 14  ;  Gordon  v.  Lewis,  2  Sum.  150  ;  Clark 


V.  Smith,  1  Saxton  (N.  J.),  121. 


167 


§  1126.]  mortgagek's  account. 

3.    Allowances  for  Repairs  and  Improvements. 

1126.  The  rule  as  to  repairs.  —  Until  foreclosure,  the  mort- 
gagee, although  in  possession  for  the  purpose  of  foreclosing,  is  not 
the  owner  of  the  property,  but  beyond  securing  payment  of  the 
debt  due  him  is  really  in  the  position  of  trustee  for  the  owner. 
He  has  no  authority  to  make  the  estate  better  at  the  expense  of 
the  mortgagor,  but  is  bound  to  use  reasonable  means  to  preserve 
the  estate  from  loss  and  injury.  He  cannot  charge  the  mortgagor 
with  expenditures  for  convenience  or  ornament.  The  rule  is  some- 
times stated  to  be  that  the  mortgagee  must  preserve  the  estate  in 
as  good  a  condition  as  that  in  which  he  received  it.  But  he  may 
properly  under  some  circumstances  go  beyond  this,  and  supply 
things  that  were  wanting  at  the  time  of  entry ;  as  where  the  doors 
or  windows  of  a  house  ai'e  gone,  he  is  justified  in  supplying  these 
in  order  to  put  the  estate  in  condition  for  occupation.^  What  is  a 
proper  expenditure  must  depend  upon  the  circumstances  of  each 
case.  If  the  estate  be  a  valuable  one,  handsomely  laid  out,  with 
many  young  fruit  and  ornamental  trees,  and  the  mortgagee  can- 
not by  reasonable  efforts  let  it  for  a  sum  sufficient  to  keep  it  in 
proper  repair  and  preserve  the  fruit  trees,  he  may  be  allowed  the 
expenses  necessary  to  keep  it  in  such  i-epair ;  but  not  for  expendi- 
tures in  cultivating  the  land,  or  for  money  paid  for  a  horse  and 
cart  and  cow.^ 

The  mortgagee  in  possession  is  bound  to  make  all  reasonable 
and  necessary  repairs,  and  is  responsible  for  loss  occasioned  by  his 
wilful  default  or  gross  neglect  in  this  respect.  What  are  reason- 
able and  necessary  repairs  depends  upon  the  particular  circum- 
stances of  the  case.'^  He  is  not  to  be  charged  with  exactly  the 
same  degree  of  care  that  a  person  in  possession  of  his  own  prop- 
erty would  ordinarily  take.^  He  is  not  bound  to  go  further  than 
to  keep  the  estate  in  necessary  repair  ;  or  to  make  full  and  com- 
plete repairs  if  he  would  thereby  incur  expense  disproportionate 
to  the  value  of  the  estate  or  to  his  own  mortgage  interest.  He 
is  not  even  bound  to  repair  defects  arising  in  the  ordinary  way  by 
■waste  and  decay. 

1  Woodward  v.  Phillips,  14  Gray  3  Dexter  v.  Arnold,  2  Sum.  108;  Mc- 
(Mass.),  132.  Cumber  v.  Oilman,  15  111.  381. 

2  Sparhawk  v.  Wills,  5  Gray  (Mass.),  *  Shaeffer  v.  Chambers,  2  Halst.  (N. 
423.  J.)  Eq.  548. 

168 


ALLOWANCES   FOR   REPAIRS   AND   IMPROVEMENTS.       [§§  1127,  1128. 

1127.  The  ordinary  rule  in  respect  to  improvements  is  that 
the  mortgagee  will  not  be  allowed  for  them  further  than  is  proper 
to  keep  the  premises  in  necessary  repair.  The  improvements  may 
be  of  permanent  benefit  to  the  estate  ;  but  unless  made  with  the 
consent  and  approbation  of  the  mortgagor  no  allowance  can  be 
made  for  thera.^  The  mortgagee  has  no  right  to  impose  them 
upon  the  owner,  and  thereby  increase  the  burden  of  redeeming. 
The  improvements  will  enure  to  the  benefit  of  the  estate  upon 
redemjDtion,  but  in  the  mean  time  the  mortgagee  has  the  use  of 
them.  It  is  his  own  choice  to  make  them  while  he  holds  only  a 
defeasible  title.  A  default  having  occurred,  he  can,  except  in 
those  states  where  mortgages  other  than  those  having  powers  of 
sale  must  be  foreclosed  by  entry  and  possession,  by  a  foreclosure 
suit,  either  sell  the  property  to  another,  or  buy  it  himself  and 
hold  it  absolutely. 

But  while  the  mortgagee  in  possession  is  not  allowed  to  charge 
for  lasting  improvements,  he  is  not  on  the  other  hand  chargeable 
with  the  increased  rents  and  profits  which  are  directly  traceable 
to  such  improvements  made  by  him.^  If,  however,  improvements 
be  made  by  a  third  person  in  possession  in  his  own  wrong,  they 
enure  to  the  benefit  of  the  mortgagor,  and  a  mortgagee  upon 
entry  is  chargeable  with  the  rents  arising  from  such  improve- 
ments.^ Such  would  also  be  the  case  if  the  improvements  are 
made  by  the  mortgagor.  But  the  mortgagee  is  not  otherwise  re- 
sponsible for  improvements  made  by  the  mortgagor,  either  to  him 
or  to  mechanics  furnishing  labor  or  material,  without  the  moi't- 
gagee's  direction.* 

1128.  Exception  to  the  rule.  —  When  the  mortgagee  makes 
permanent  improvements,  supposing  he  has  acquired  an  absolute 

1  Harper's    Appeal,   64    Pa.    St.   .31,5;  den  i'.  Jordan,  28  Cal.  .301 ;  32  Cal.  397  ; 

Russell   V.   Blake,  2    Pick.   (Mass.)    505;  Lowndes  r.  Chisholm,  2    McCord   (S.  C.) 

Clark  V.  Smith,  Saxt.  (N.  J.)    121  ;  Bell  Ch.  455 ;  Ruby  v.  Portland,  15   Me.  306  ; 

V.  The  Mayor,  10  Paige  (N.  Y.)  Ch.  49  ;  Hopkins  v.   Stephenson,   1   J.  J.  Marsh. 

Quinn  v.  Brittain,  HoflF.  (N.  Y.)  Ch.  3.54  ;  (Ky.)  341. 

Moore  v.  Cable,  1  Johns.  (N.  Y.)  Ch.  385,  2  Moore  v.  Cable,  1  Johns.  (N.  Y.)  Ch. 

per  Chancellor  Kent;  Mickles  y.  Dillaye,  385;   Bell  v.  The   Mayor,   10  Paige  (N. 

17   N.  Y.  80,  per  Denio,  J. ;  Wetmore  v.  Y.),  49;  Clark  v.   Smith,  Saxt.   (N.  J.) 

Roberts,  10  How.  (N.  Y.)  Pr.  51  ;  Bene-  121,  138  ;  and  see  Morrison  v.  McLeod,  2 

diet  V.  Oilman,  4  Paige  (N.  Y.),  58 ;  Neale  Ired.  (N.  C.)  Eq.  108. 

V.  Hagthrop,   3   Bland    (Md.)    Ch.    590;  »  Mgrriam  v.  Barton,  14  Vt.  501. 

Dougherty  v.  McColgan,  6  G.  &  J.  275 ;  «  Holmes  v.  Morse,  50  Me.  102;  Childs 

McCarron  v.  Cassidy,  18  Ark.  34;  Hid-  v.  Dolan,  5  Allen  (Mass.),  319. 

169 


§  1129.]  mortgagee's  account. 

title  by  foreclosure,  upon  a  subsequent  redemption  he  is  allowed 
the  value  of  them,^  especially  if  the  mortgagor  has  by  his  actions 
to  any  extent  favored  the  mistaken  belief.^ 

In  like  manner  a  purchaser  at  a  foreclosure  sale,  who  has  made 
valuable  improvements  in  the  belief  that  he  has  acquired  an  ab- 
solute title,  is  entitled  to  be  paid  for  them  in  case  the  premises 
are  redeemed. ^  Such  a  purchaser,  when  the  equity  of  redemption 
has  not  been  cut  off  by  the  sale,  is  in  fact  an  assignee  of  the 
mortgage  title.  In  like  manner  a  purchaser  in  good  faith  from 
the  mortgagee  in  possession,  and  with  the  assurance  that  he  gave 
a  perfect  title,  is  entitled  to  allowance  for  improvements  made  by 
him  thereon,  although  these  consist  of  new  structures.* 

The  mortgagee  may  also  be  allowed  for  improvements  when  he 
has  been  in  possession  for  a  long  period,  and  the  mortgagor,  know- 
ing that  the  improvements  were  going  on,  interposed  no  objec- 
tion.^ And  when  he  is  allowed  for  the  improvements  he  is  charge- 
able with  the  rent  on  the  property  as  improved,  and  not  as  it  was 
exclusive  of  the  improvements.^ 

1129.  Allowance  for  repairs.  —  Though  not  bound  to  make 
permanent  repairs,  it  is  quite  another  question  whether  the  mort- 
gagee may  not  claim  an  allowance  for  proper  expenditures  for 
permanent  repairs  for  the  benefit  of  the  estate.'^  The  rule  un- 
doubtedly is  that  he  may  charge  the  cost  of  permanent  improve- 
ments so  far  as  they  are  necessary  and  beneficial  to  the  estate.^ 
All  necessai-y  repairs  made  by  a  mortgagee  in  possession  should 
be  allowed  for  in  his  accounts.^  The  fact  that  the  necessary  re- 
pairs of  the  premises  exceed  in  cost  the  amount  of  the  rents  and 

1  Miner  v.  Bcekman,50  N.  Y.  337  ;  Put-  *  McSorley  v.  Larissa,  100  Mass.  270; 
nam  v.  Kitchie,  6  Paige  (N.  Y.),  390;  Mickles  v.  Dillaye,  17  N.  Y.  80;  and  see 
Wetmore  v.  Roberts,  10  How.  (N.  Y.)  Miner  v.  Beekinan,  50  N.  Y.  337,  345; 
Pr.  51  ;  Fogal  v.  Pirro,  17  Abb.  (N.  Y.)  Bright  v.  Boyd,  1  Story  C.  C.  478. 

Pr.  113;  10   Bosw.  100;  Benedict   v.  Gil-  ^  Montgomery    v.    Chadwick,    7    Iowa, 

man,   4    Paige    (N.    Y.),    58;    Troost    v.  114;  Roberts  r.  Fleming,  53  111.  196,  204. 

Davis,  31  Ind.  34;  Roberts  v.  Fleming,  53  «  Montgomery  v.  Chadwick,  supra. 

III.  198;  Gillis  v.   Martin,  2  Dev.  N.  C.  •?  Bollinger  w.  Chouteau,  20  Mo.  89. 

Eq.  470.  8  Boston    Iron    Co.   v.   King,    2    Cush. 

2  Bacon  r.  Cottrell,  13  Minn.  194.  (Mass.)    400;    Reed    v.   Reed,    10    Pick. 

3  Green  v.  Uixon,  9  Wis.   .532;  Green  (Mass.)  400. 

y.  Wescott,  13   Wis.  606;  Bacon  v.  Cot-  ^  Sandon    v.    Hooper,    6    Beav.    246; 

trell,  13  Minn.  194;  Barnard  v.  Jennison,  Neesom  v.  Clarkson,  4  Hare,  97  ;  Harper's 

27  Mich.  230;  Vanderhaise  v.  Hugues,  2  Appeal,  64  Pa.  St.  315;  Adkins  v.  Lewis, 

Beas.   (N.  J.)  410;    Harper's  Appeal,  64  5  Oregon,   292;  Strong  v.  Blanchard,  4 

Pa.  St.  315.  Allen  (Mass.),  538. 

170 


ALLOWANCE   FOR    COMPENSATION.         [§  1130-1132. 

profits  is  no  objection  to  their  allowance.^  Neither  is  there  any 
objection  to  an  allowance  for  repairs  of  such  sums  as  the  master,  in 
stating  the  account,  has  found  to  be  reasonable,  and  to  have  been 
actually  paid,  although  the  mortgagee  is  unable  to  give  dates  and 
items  of  all  the  repairs.^ 

But  repairs  which  are  demanded  merely  for  the  purpose  of  orna- 
ment or  comfort  while  the  mortgagee  himself  occupies  the  prem- 
ises, and  are  not  of  any  substantial  benefit  to  the  realty,  will  not 
be  allowed.^  And  so  also  charges  for  new  buildings  or  structures 
which  are  not  necessary  for  the  preservation  of  the  estate  should 
not  be  allowed.^ 

1130.  If  the  mortgagee  so  intermingle  the  mortgaged  prop- 
erty with  his  own  that  it  is  impracticable  to  ascertain  how  much 
of  certain  charges  ought  to  be  borne  by  the  mortgaged  estate,  he 
will  not  be  allowed  anything  in  respect  to  such  chai'ges.^ 

1131.  A  mortgagee  in  possession  of  a  church  edifice,  and 
using  it,  with  the  consent  of  the  mortgagor,  for  religious  services, 
upon  accounting  was  charged  with  the  actual  receipts  from  pew 
rents,  but  was  not  allowed  for  the  expenses  of  conducting  religious 
services.  There  seems  to  have  been  no  proof  offered  that  the 
pew  rents  were  paid  in  consideration  of  the  preaching,  the  music, 
with  the  adjuncts  of  light  and  warmth,  and  the  services  of  the 
sexton  ;  and  it  was  suggested  that  they  may  have  been  paid  for 
the  privilege  of  assembling  for  the  performance  of  religious  ser- 
vices, and  for  the  advantage  of  the  Sunday-school  and  the  lecture 
room.  In  the  absence  of  proof,  there  was  no  presumption  that 
the  preaching,  the  music,  and  the  like,  were  the  consideration  for 
which  the  rents  were  paid.^ 

4.  Allowance  for  Compensation. 

1132.  A  mortgagee  in  possession  is  not  entitled  to  com- 
pensation for  his  own  trouble  in  taking  care  of  the  estate  and 
renting  it,  although  there  is  an  agreement  between  him  and  the 
mortgagor  that  he  shall  have  such  compensation.'^     The  reason 

1  Reed  v.  Reed,  10  Pick.  (Mass.)  398.  5  primer  v.  Loper,  25  N.  J.  Eq.  475. 

2  Montague  v.  Boston  &  Albany  R.  R.  ^  Madison  Av.  Church  v.  Oliver  St. 
Co.  124  Mass.  242.  Church,  41  Superior  Ct.  (N.  Y.)  369,  420. 

=*  Madison   Av.    Church   v.   Oliver   St.  ^  French  y.  Baron,  2  Atk.  120;  Boni- 

Church,  41  Superior  Ct.  (N.  Y.)  369.  thon  v.  Hockiiiore,  1  Vern.  315  ;  Godfrey 

*  Reed  V.  Reed,  10  Pick.  (Mass.)  398;  v.  Watson,  3  Atk.  518  ;  Eaton  v.  Simonds, 

Russell  y.  Blake,  2  Pick.  (Mass.)  505.  14   Pick.    (Mass.)    98;    Clark   v.   Smith, 

171 


§  1133.]  mortgagee's  account. 

given  for  tins  rule  is,  that  to  allow  such  compensation  would  tend 
directly  to  facilitate  usury  and  oppression.^  And  moreover  the 
care  he  bestows  is  for  the  furtherance  and  protection  of  his  own 
interests,  being  not  an  agent,  but  for  the  time,  as  it  were,  the 
owner.2  But  he  may  charge  for  the  services  of  an  agent  em- 
ployed by  him  to  collect  rents,  when  a  prudent  owner  acting  for 
himself  would  probably  have  done  so.^ 

If  a  mortgagor  agrees  and  consents,  with  a  knowledge  of  all 
the  facts  and  circumstances,  to  disbursements  made  by  the  mort- 
gagee in  possession,  these  are  to  be  deemed  reasonable  and  must 
be  reimbursed;  and  the  fact  that  the  mortgagor  or  his  agent 
agreed  to  the  employment  by  the  mortgagee  for  a  time  of  a  per- 
son to  take  charge  of  the  mortgaged  estate,  at  a  certain  rate  of 
compensation,  is  competent  though  not  conclusive  evidence  that 
the  same  compensation  should  be  allowed  during  the  residue  of 
the  term  of  the  mortgagee's  possession.^ 

1133.  In  Massachusetts,  as  a  general  rule,  the  mortgagee  in 
possession  is  allowed  as  compensation  for  managing  the  property 
five  per  cent,  of  the  rents  collected,  though  if  it  were  found  that 
the  services  were  actually  worth  more,  the  rule  is  not  so  fixed  as 
to  prevent  a  further  allowance.^  Therefore  in  a  case  where  a 
master,  in  stating  an  account  between  the  mortgagor  and  mort- 
gagee, reported  that  he  was  satisfied  that  such  commission  would 
not  compensate  the  mortgagee  for  his  trouble,  the  court  recom- 
mitted the  report  with  directions  to  allow  such  further  sum  as  he 
might  think  just  and  reasonable.^  The  question  of  compensation 
is  peculiarly  within  the  discretion  of  the  master  to  whom  the  bill 
in  equity  is  referred  to  state  the  account.'''  But  the  mortgagee 
cannot  usually  charge  a  commission  on  the  amount  expended  in 
repairs  and  improvements.  In  Connecticut,  also,  a  mortgagee  in 
possession  is  entitled  to  charge  for  his  services  in  renting  them  and 

Saxt.  (N.J.)  121,  137;  Elmer  v.  Loper,  ^  Qerrish  v.  Black,  104  Mass.  400; 
25  N.  J.  Eq.  47.5  ;  Moore  v.  Cable,  1  Johns.     Gibson  v.  Crehore,  5  Pick.  (Mass.)  146  ; 

(N.  Y.)  Ch.  385,  388.  Tucker  v.  Buffura,  16  Pick.  (Mass.)  46  ; 

1  Scott  V.  Brest,  2  T.  R.  238.  Montague  v.  Boston  &  Albany  R.  R.  Co. 

2  Benham  v.  Rowe,  2  Cal.  387.  124  Mass.  242. 

3  Davis  D.  Dendy,  3  Mad.  170;  Harper  ^  Adams  v.  Brown,  7  Cush.  (Mass.) 
j;  Ely,  70  111.  581.  220. 

♦  Cazenove  v.  Cutler,  4  Met.  (Mass.)  '  Montague  v.  Boston  &  Albany  R.  R. 
246.  Co.  supra. 

172 


ALLOWANCES    FOR   DISBURSEMENTS.       [§§  1134,  1135. 

collecting  rents,  and  for  such  sums  as  were  necessarily  expended 
to  obtain  possession  of  the  property.^ 

In  determining  the  amount  of  compensation  to  be  made  to  the 
mortgagee,  reference  should  be  had  to  the  nature  and  condition  of 
the  property  and  to  the  pi-ovisions  made  in  the  mortgage  itself  for 
such  compensation.^ 

5.  Allowances  for   Disbursements. 

1134.  Taxes  paid  by  the  mortgagee  on  the  mortgaged  prem- 
ises, either  before  or  after  he  has  taken  possession,  must  be  re- 
paid upon  redemption.  Under  the  provisions  of  the  mortgage  the 
taxes,  when  paid  by  him,  usually  become  a  lien  under  the  mort- 
gage.3  But  even  when  this  is  not  the  case,  the  payment  being 
made  to  preserve  his  security  he  is  entitled  to  recover  the  amount 
paid,  and  may  even  have  a  preference  to  this  extent  over  prior 
incumbrancers  whose  liens  the  payment  has  served  to  protect.* 
The  same  is  true  of  any  assessment  made  by  authority  for  public 
purposes,  and  which  is  by  law  a  primary  lien  upon  the  property.^ 

There  is  no  obligation  resting  upon  a  mortgagee  to  pay  the 
taxes  unless  he  be  in  possession  of  the  land  ;  and  he  is  not  there- 
fore responsible  to  the  mortgagor  for  the  loss  of  the  property 
through  the  non-payment  of  the  taxes.^ 

1135.  Insurance  premiums.  —  Where  it  is  part  of  the  contract 
of  the  mortgagor,  and  a  condition  of  the  mortgage,  that  he  shall 
keep  the  premises  insured  in  a  certain  sum  for  the  benefit  of  the 
mortgagee,  charges  for  premiums  paid  by  him  for  such  insurance, 
which  the  mortgagor  has  neglected  to  obtain,  are  allowed,"  though 
the  insurance  obtained  be  "  for  whom  it  may  concern  "  and  pay- 
able to  the  mortgagee.^  But  he  is  not  allowed  for  premiums  paid 
by  him  to  insure  his  own  interest  as  mortgagee  where  the  amount 
recovered  in  case  of  loss  would  go  to  him  for  his  sole  benefit  with- 
out extinguishing  the  mortgage  debt  pro  tanto.^     An  assignee  of 

1  Waterman  v.  Curtis,  26  Conn.  241.  *  Cook  v.  Kraft,  3  Lans.  (N.  Y.)   512; 

2  Boston    &    Worcester    li.    11.    Co.    v.     Davis  v.  Bean,  114  Mass.  360. 

Haven,  8  Allen  (Mass.),  359.  6  Dale  v.  McEvers,  2  Cow.  (N.  Y.)  1 18  ; 

«  Robinson  v.  Kyan,  25  N.  Y.  320;  Burr  Rapelye  v.  Prince,  4  Hill  (N.  Y.),  119. 
V.  Veeder,  3   Wend.  (N.  Y.)  412;  Eagle         ®  Harvic  u.  Banks,  1  Rand.  (Va.)  408. 
Fire  Ins.  Co.  v.  Tell,  2  Edw.  (N.  Y.)  631  ;         ^  Harper  v.  E\y,  70  111.  581. 
Harper  v.   Ely,    70   111.   581  ;    Strong  v.         *  Fowley  v.  Palmer,  5    Gray    (Mass.), 

Blanchard,  4  Allen  (Mass.),  .538.  549. 

•  Fowley  v.  Palmer,  supra. 

173 


§§  1136,  1137.]  mortgagee's  account. 

a  mortgage  containing  such  a  provision  for  insurance  lias  the  same 
right  as  the  mortgagee  to  claim  allowance  upon  redemption  of 
the  mortgage  for  sums  paid  for  insurance  while  the  mortgagor 
neglected  to  insure,^ 

Unless  there  be  a  provision  in  the  mortgage  for  insuring  the 
property  for  the  mortgagee's  benefit,  he  is  not  generally  allowed 
for  premiums  paid  by  him  for  such  insurance.^  When  there  is 
such  a  requirement,  premiums  for  insurance  taken  in  excess  of  the 
amount  stipulated  for  in  the  mortgage  will  not  be  allowed."^ 

Insurance  procured  by  the  mortgagee  is  not  chargeable  to  the 
mortgagor,  unless  it  is  procured  at  his  request,  or  in  accordance 
with  a  provision  in  the  mortgage.^ 

1136.  The  amount  of  insurance  recovered  upon  a  policy  upon 
the  buildings  standing  upon  the  mortgaged  premises,  procured  by 
the  owner  at  his  own  expense  but  payable  to  the  mortgagee  in 
case  of  loss  in  pursuance  of  a  provision  of  the  mortgage,  must  be 
applied  in  reduction  of  the  mortgage  debt  upon  redemption,  al- 
though the  insurance  company,  upon  paying  the  loss  to  the  mort- 
gagee, take  from  him  an  assignment  of  the  mortgage  and  policy.^ 

1137.  A  mortgagee  in  possession  -who  is  compelled  to  pay 
a  prior  mortgage,  in  order  to  protect  his  title,  has,  as  against  the 
mortgagor  and  those  claiming  under  him,  a  right  to  indemnify 
himself  out  of  the  mortgaged  property.^  And  even  if  such  prior 
mortgage  is  discharged  of  record  before  title  accrued  to  the  person 
seeking  to  redeem,  instead  of  an  assignment  of  it  being  made  to 
the  mortgagee  who  paid  it,  he  is  to  be  alloAved  for  the  sum  so  paid, 
especially  if  it  appears  that  the  whole  amount  claimed  by  the 
mortgagee  is  less  than  what  appears  to  be  due  upon  the  mortgage 
by  the  record.^ 

A  mortgagee  who  has  advanced  money  to  protect  the  property 
from  injury  or  loss  is  held  to  have  a  good  charge  upon  the  prop- 
erty for  the  money  so  advanced.^     Money  paid  by  the  mortgagee 

1  Montague  v.  Boston  &  Albany  R.  R.  137;  Dobson  v.  Land,  8   Hare,  216;  Bos- 
Co.  124  Mass.  242.  ton  &  Worcester  R.  R.  v.  Haven,  8  AJlen 

2  Faure  v.  Winans,  Hopk.  (N.  Y.)  Ch.  (Mass.),  .359;   White  v.  Brown,  2  Cush. 
283 ;  but  in  Slee  v.  Manhattan  Co.  1  Paige  (Mass.)  412. 

(N.  Y.),  81,  such  an  allowance  was  made         ^  Graves   v.   Hampden  F.  Ins.   Co.  10 

under  the  peculiar  circumstances   of    the  Allen  (Mass.),  281. 

case.  «  Harper  y.  Ely,  70  111.  581. 

*  Madison   Av.   Church   v.   Oliver    St.         '  Davis  v.  Winn,  2  Allen  (Mass.),  111. 
Church,  41  Superior  Ct.  (N.  Y.)  369.  »  Rowan  v.   Sharp's  Rifle  Manuf.  Co. 

*  Bellamy   i\   Brickenden,   2   J,  &   H.  29  Conn.  282. 

174 


ANNUAL   RESTS.  [§§  1138,  1139. 

to  protect  the  title  to  the  estate  from  prior  incumbrances  may  be 
added  by  him  to  the  principal  of  his  claim,  and  he  is  entitled  to 
interest  upon  the  sura  so  paid.i 

1138.  The  mortgagee  should  be  credited  for  reasonable 
counsel  fees  paid  in  collecting  rents  and  profits  ;  but  not  for 
counsel  fees,  in  suits  between  the  mortgagee  and  mortgagor. ^ 

A  mortgagee  who  has  paid  a  claim  upon  which  he  was  surety 
of  the  mortgagor,  and  which  the  mortgage  was  given  to  secure, 
should  be  allowed  the  whole  sum  paid,  although  he  has  after- 
wards received  contribution  from  a  co-security.^ 

6.  Annual  Rests. 

1139.  Rule  for  annual  rests  in  stating  account.  —  Chief 
Justice  Shaw,'*  in  directing  that  an  account  be  reformed  by  mak- 
ing annual  rests,  laid  down  the  following  rule  :  — 

"  1.  State  the  gross  rents  received  by  the  defendant  to  the  end 
of  the  first  year.  2.  State  the  sums  paid  by  him  for  repairs, 
taxes,  and  a  commission  for  collecting  the  rents,  and  deduct  the 
same  from  the  gross  rents,  and  the  balance  will  show  the  net 
rents  to  the  end  of  the  year.  3.  Compute  the  interest  on  the 
note  for  one  year,  and  add  it  to  the  principal,  and  the  aggregate 
will  show  the  amount  due  thereon  at  the  end  of  the  year.  4.  If 
the  net  annual  rent  exceeds  the  year's  interest  on  the  note  deduct 
that  rent  from  the  amount  due,  and  the  balance  will  show  the 
amount  remaining  due  at  the  end  of  the  year.  5,  At  the  end  of 
the  second  year  go  through  the  same  process,  taking  the  amount 
due  at  the  beginning  of  the  year  as  the  new  capital  to  compute 
the  year's  interest  upon.     So  to  the  time  of  judgment." 

Statements  of  substantially  the  same  rule  have  frequently  been 
made.  The  two  essential  points  are  :  First,  that  when  there  is  a 
surplus  of  receipts  in  any  year  above  the  interest  then  due,  a  rest 
shall  be  made,  and  the  balance  remaining  after  discharging  the 
interest  shall  be  applied  to  reduce  the  principal,  so  that  the  mort- 
gage shall  not  continue  to  draw  interest  for  the  face  of  it,  when 
in  fact  the  mortgagee  has  in  his  hands  money  that  should  be  ap- 

1  Godfrey  v.  Watson,  3  Atk.  517,518;     120;    Boston  &  Worcester  R.  K.   Co.  v. 
Sandon  v.  Hooper,  6  Beav.  248;  Telly  v.     Haven,  8  Allen  (Mass.),  359. 

Wathen,  7  Hare,  373  ;  Davis  v.  Bean,  114  a  Strong  v.  Blanchard,  4  Allen  (Mass.), 
Mass.  360.  538. 

2  Hubbard  v.  Shaw,  12  Allen  (Mass.),         *  Van    Vroiiker    v.   Eastman,    7    Met. 

(Mass.)  157. 

175 


§  1140.]  mortgagee's  account. 

plied  to  reduce  the  principal,  and  thereby  make  the  interest  less 
for  the  following  year. 

Secondly,  although  the  amount  received  in  any  year  be  insuffi- 
cient to  pay  the  interest  accrued,  the  surplus  of  interest  must  not 
be  added  to  the  principal  to  swell  the  amount  on  which  interest 
shall  be  paid  for  the  following  year;  for  that  would  result  in  the 
charo-in"-  of  interest  upon  interest,  which  is  not  allowed ;  but  the 
interest  continues  on  the  former  principal  until  the  receipts  exceed 
the  interest  due.  These  are  the  principles  upon  which  the  mort- 
gagee's interest  account  is  everywhere  made  up  ;  and  the  cases  in 
which  they  are  stated  are  many  and  in  general  accord. ^ 

Except  for  the  first  part  of  the  rule,  that  if  the  annual  rents 
exceed  the  interest  on  the  mortgage  debt  annual  rests  shall  be 
made  and  interest  allowed  on  the  surplus,  great  injustice  would 
be  done  in  many  cases.^  If,  for  instance,  the  debt  were  $5,000 
and  the  rents  should  be  in  excess  of  the  interest,  the  amount  of 
1500  each  year,  and  no  rests  were  made,  the  mortgagee  might 
remain  in  possession  ten  years,  with  the  entire  mortgage  debt 
drawing  interest  all  the  while,  when  in  fact  he  had  received  $500 
of  the  principal  each  year,  and  during  the  last  year,  while  only 
$500  would  remain  due,  he  would  receive  the  interest  of  ten  times 
that  sum. 

1140.  If  the  rents  and  profits  exceed  the  siuns  properly 
chargeable  for  repairs  and  the  care  of  the  estate,  so  that  there  is 
a  net  surplus  applicable  to  the  payment  vof  interest  on  the  debt, 
annual  rests  in  the  computation  of  interest  should  be  made.^ 
Semi-annual  rests  have  been  allowed  where  the  rents  and  profits 
received  quarterly  were  sullicient  to  pay  the  interest.^  But  if 
there  be  nothing  i-eceived  from  the  property  that  is  applicable 
from  time  to  time  to  the  payment  of  the  accrued  interest  no  rests 

1  Connecticut  y.  Jackson,  1   Johns.   (N.  2  Green  y.  Wescott,  13  Wis.  606  ;  Shiief- 

y.)   Ch.  13,    17;    Stone   v.    Seymour,   15  fer  y.  Chambers,  2  Halst.  (N.  J.)  Eq.  548  ; 

Wend.  (N.  Y.)  19,  24;    Jencks  v.  Alexan-  Gordon  v.  Lewis,  2  Sum.  147  ;  Shejjhard 

der,   11   Paige  (N.  Y.),  619,625;    French  i;.  Elliot,  4  Madd.  254  ;  Gibson  f.  Crehore, 

V.  Kennedy,  7  Barb.  (N.  Y.)  452  ;  Bennett  5  Pick.  160  ;  Reed  v.  Reed,  10  Pick.  398. 

V.  Cook,  5  Thomp.  &  C.  (N.  Y.)    134  ;  2  »  Gladding  v.  Warner,  36  Vt.  54  ;  Reed 

Hun,  526;    Snavely  v.  Pickle,  29   Gratt.  v.  Reed,  10  Pick.  (Mass.)  398;    Green  v. 

(Va.)27.  Wescott,  13  Wis.  606. 

For  exceptional  cases  in  which  aimual  *  Gibson   v.   Crehore,   5   Pick.   (Mass.j 

rests  are  not  required,  see  Patchy.  Wild,  160. 
30  Beav.  100;  Horlock  v.  Smiih,  1   Coll. 
Ch.  287. 

176 


ANNUAL   RESTS.  [§  1141, 

can  be  made.^  Annual  rests  are  directed  when  the  mortgagee  is 
personally  in  possession  as  well  as  when  he  receives  rents  from  a 
tenant.^ 

In  taking  the  account  between  the  mortgagee  and  mortgagor 
the  surplus  of  his  receipts  over  his  disbursements  should  be  ap- 
plied to  the  payment  of  the  interest  as  it  becomes  due  ;  and  if 
more  than  sufficient  for  that  purpose  the  excess  should  be  credited 
on  the  principal.^  If  in  any  year  his  disbursements  exceeded  his 
receipts,  the  amount  of  the  deficit  should  be  added  to  the  prin- 
cipal of  the  debt.  Annual  rests  may  be  made,  so  that  the  mort- 
gagor may  be  charged  with  interest  for  disbursements  made  by 
the  mortgagee,  but  not  so  as  to  charge  the  debtor  with  compound 
interest  either  upon  the  mortgage  or  upon  the  advances.*  When 
there  is  interest  in  arrear  at  the  time  the  mortgagee  takes  pos- 
session, annual  rests  are  not  generally  required  until  the  interest 
in  arrear  is  paid  off  ;  ^  and  according  to  some  authorities  they  are 
not  in  such  case  required  until  the  whole  mortgage  debt  has  been 
paid  off.^ 

1141.  As  to  the  rate  of  interest,  the  contract  of  the  parties 
will  govern.  If  the  rate  reserved  in  the  moi-tgage*be  less  than 
the  legal  rate,  it  will  continue  at  that  rate  until  paid.^  If,  on  the 
other  hand,  that  rate  be  in  excess  of  the  rate  allowed  upon  judg- 
ments and  upon  contracts  when  the  parties  have  not  fixed  upon 
a  different  rate,  it  will  continue  at  the  same  rate.  Of  course,  if 
in  either  case  the  debt  be  merged  in  a  judgment,  the  rate  estab- 
lished by  law  for  all  cases  when  interest  is  implied  will  thereafter 
govern. 

Where  coupons  have  been  given  for  the  interest  on  the  mort- 
gage debt,  they  draw  interest  after  maturity  in  the  same  manner 
as  do  notes  for  the  principal.     They  provide  for  the  payment  of 

1  Reed  v.  Keed,  10  Pick.  (Mass.)  398;         *  Vanderhaise  v.  Ilugnes,  13  N.J.  Eq. 
Montague  v.  Boston  &  Albany  R.  li.  Co.     410. 

124  Mass.  242.  5  Wilson  v.  Cluer,  3  Beav.  140. 

2  Wilson  y.  Metcalfe,  1  Russ.  5.30 ;  Mor-         »  Latter    v.   Dashwood,    6    Sim.    462; 
ris  y.  Islip,  20  Beav.  6.54.  Finch   v.   Brown,  3   Beav.  70;   see,  also, 

^  Shephard    v.   Elliot,   4    Madd.   2.54 ;  Morris  v.  Islip,  20  Beav.  654 ;    Thorney- 

Gould    V.  Tancred,  2  Atk.   533 ;   Mahon  croft  ;;.  Crockett,  2  H.   L.  Ca.  239 ;   Hor- 

V.  Williams,  39  Ala.  202  ;  Elmer  v.  Loper,  lock  v.  Smith,  1   Coll.  Ch.  287. 

25  N.  J.  Eq.  475;  Johnson  v.  Miller,    1  ^  Millers.  Burroughs,  4  Johns.  (N  Y.) 

Wils.  (Ind.)  416.  Ch.  436. 


VOL.   II.  12 


177 


§§  1142, 1143.]  mortgagee's  account. 

definite  sums  of  money  at  definite  times,  and  are  in  effect  promis- 
sory notes. ^ 

Upon  the  redemption  of  a  mortgage  the  mortgagor  is  not 
obliged  to  pay  compound  interest,  though  the  mortgage  note  may 
in  terms  require  it.^  If  the  mortgage  be  assigned  after  the  tak- 
ing of  possession,  no  rest  in  the  computation  of  interest  at  that 
time,  by  adding  the  interest  then  due  to  the  principal,  should  be 
made.^ 

1142.  The  account  binds  subsequent  incumbrancers,  though 
not  privy  to  the  taking  of  it,  unless  there  be  fraud  or  collusion. 
This  is  the  case  even  with  accounts  settled  between  the  mortgagor 
and  mortgagee  out  of  court.^ 

1143.  An  account  may  be  opened  for  fraud  or  a  particular 
error  even  after  a  long  lapse  of  time.^  The  fraud  or  error  must 
be  particularly  alleged ;  a  general  charge  being  sufl&ciently  an- 
swered by  a  general  denial.^ 

1  Gelpcke  v.  City   of  Dubuque,  1  Wall.         ^  Boston   Iron    Co.   v.   King,    2    Cush. 
206;  Hollingsworth  v.  City  of  Detroit,  3     (Mass.)  400. 

McLean,  472 ;  Harper  v.  Ely,  70  111.  581 ;  *  Wrixon  v.  Vize,  2  Dru.  &  War.  192; 

Dunlap  V.  Wiseman,  2  Dis.   (Ohio)  398.  Knight  y.  Bampfeild,  1  Vern.  179. 

See  Jones  on  R.  R.  Securities,  §§  332-336.  ^  Vernon  v.  Vawdry,  2  Atk.  119. 

2  Parkhurst  v.  Cummings,  56  Me.  155;  «  Drew  v.  Power,  1    Sch.  &  Lef.  192; 
Stone  V.  Locke,  46  Me.  445.  Kinsman  v.  Barker,  14  Ves.  579. 

178 


CHAPTER   XXIV. 


WHEN   THE   RIGHT    TO   REDEEM   IS    BARRED. 


I.  The  statute  of  limitations  applies  by 

analogy,  1144-1151. 
II.  When    the  statute     begins   to    run, 
1152-1161. 


III.  What  prevents   the  running  of   the 
statute,  1162-1173. 


1.   The  Statute  of  Limitations  applies  hy  Analogy. 

1144.  In  general,  except  when  changed  by  modern  statutes, 
the  rule  adopted  by  courts  of  equity  in  regard  to  the  redemption 
of  mortgages  is  in  analogy  with  the  right  of  entry  at  law,  under 
the  old  statute  of  limitations,  21  Jac.  1,  c.  16,  that  twenty  years' 
possession  by  the  mortgagee  without  any  account  or  acknowledg- 
ment of  a  subsisting  mortgage  is  a  bar,  unless  the  mortgagor  is 
within  some  of  the  exceptions  made  for  disabilities.^  "•  Other- 
.wise,"  said  Lord  Hardwicke,  "  it  would  make  property  very  pre- 
carious, and  a  mortgagee  would  be  no  more  than  a  bailiff  to  the 
mortgagor,  and  subject  to  an  account,  which  would  be  a  great 
hardship,"  ^  In  analogy  to  the  same  statute  the  same  exceptions 
are  made  for  disabilities,  and  ten  years  allowed  after  their  removal 


1  "  It  is  now  perfectly  settled,"  said  Sir 
Wm.  Grant, "  that  twenty  years'  possession 
by  a  mortgagee  is  prima  facie  a  bar  to  the 
right  of  redemption,"  in  Barron  v.  Martin, 
19  Ves.  327,  and  cases  cited  ;  Blake  v. 
Foster,  2  Ball  &  Beat.  402 ;  Johnson  v. 
Mounsey,  40  L.  T.  N.  S.  234 ;  7  Reporter, 
701  ;  Amory  v.  Lawrence,  3  Cliff.  523 ; 
Ayrcs  v.  Waite,  10  Cash.  (Mass.)  72  ;  How- 
land  V.  Shiirtlcff,  2  Met.  26 ;  Slicer  v.  Bank 
of  Pittsburg,  16  IIow.  571  ;  Hughes  v.  Ed- 
wards, 9  Wheat.  489;  Dexter  u.  Arnold, 
1  Sumner,  109;  Ross  v.  Norvell,  1  Wash. 
(Va.)  17;  Batesw.  Conrow,  11  N.  J.  Eq.  (3 
Stock.)  137;  Demarcst  v.  Wynkoop,  3 
Johns.  (N.  Y.)  Ch.  129,  where  Chancellor 


Kent  cites  many  cases  ;  Moore  v.  Caple, 
1  lb.  385 ;  Slee  v.  Manhattan  Co.  1  Paige 
(N.  Y.),  48 ;  Phillips  v.  Sinclair,  20  Me. 
269  ;  Cook  v.  Finkler,  9  Mich.  131  ;  Gunn 
V.  Brantley,  21  Ala.  633;  Hallesy  v.  Jack- 
son, 66  111.  139 ;  McNair  v.  Lot,  34  Mo. 
285 ;  Montgomery  v.  Chadwick,  7  Iowa, 
114;  Rogan  v.  Walker,  1  Wis.  527; 
Knowlton  v.  Walker,  13  Wis.  264;  Bai- 
ley V.  Carter,  7  Ired.  (N.  C.)  Eq.  282; 
Randall  v.  Bradley,  65  Me.  43  ;  Blethcn  v. 
Dwinal,  35  Me.  556  ;  Roberts  v.  Little- 
field,  48  Me.  61  ;  Hoffman  v.  Harrington, 
33  Mich.  392  ;  Hall  v.  Denckla,  28  Ark. 
506 ;  Crawford  v.  Taylor,  42  Iowa,  260. 
2  Anon.  3  Atk.  313. 
179 


§  114;").]  WHEN    THE   RIGHT   TO   REDEEM   IS   BARRED. 

within  which  the  right  may  be  asserted,  at  the  expiration  of  which 
time  the  bar  is  complete.^ 

The  right  of  the  mortgagor  to  redeem  being, an  equitable  and 
not  a  legal  right,  the  statute  of  limitations  does  not  strictly  consti- 
tute a  bar  to  a  bill  to  redeem  ;  but  equity  adopts  the  statutory 
period  of  twenty  years  after  forfeiture  and  possession  taken  by  the 
mortgagee,  beyond  which  the  mortgagor  shall  not  be  allowed  to 
redeem,  if  he  has  paid  no  interest  in  the  mean  time.  Such  lapse 
of  time  affords  evidence  of  a  presumption  that  the  mortgagor  has 
abandoned  his  right.'-^  But  no  lapse  of  time  less  than  twenty 
years  is  a  sufficient  answer  to  the  mortgagor's  bill  to  redeem 
where  that  is  the  time  necessary  to  bar  real  actions  ;^  and  that  is 
not  a  conclusive  and  absolute  bar,  but  only  affords  a  presumption 
of  fact,  which  may  be  controlled  by  evidence.* 

After  the  mortgagee  has  remained  in  possession  for  twenty 
years  without  accounting,  or  in  any  way  acknowledging  the  right 
of  redemption  in  the  mortgagor,  the  latter  cannot  redeem.^  The 
possession  of  the  mortgagee  must  be  unequivocally  adverse  to  the 
mortgagor  or  person  entitled  to  the  equity  of  redemption.  The 
fact  that  he  entered  with  the  consent  of  the  owner  makes  his 
possession  none  the  less  adverse,  unless  in  return  he  assumed  some 
obligation  to  the  owner. 

But  if  the  mortgagor  was  under  disability  the  time  of  his  dis- 
ability is  to  be  deducted,  but  he  cannot  avail  himself  of  successive 
disabilities.^  In  analogy  with  the  statute  of  limitations  of  Jac.  1, 
and  generally  adopted  in  this  country,  ten  years  is  allowed  after 
the  removal  of  the  disability  within  which  to  bring  the  action.''' 

1145.  The  time  conforms  to  the  statute  in  force.  —  In  those 
states,  however,  in  which  the  time  of  limitation  within  which  a 
recovery  of  land  may  be  had  has  been  changed  by  statute  to  a 
period  longer  or  shorter  than  twenty  years,  following  the  anal- 
ogy of  the  statutes  the    time  within  which  the  mortgagor  may 

1  Beckfoi-d  v.  Wade,  17  Ves.  99 ;  Jenner  *  Ayres  v.  Waite,  10  Gush.  (Muss.)  72. 
V.  Tracey,  3  P.  Wms.  287,  n. ;  Belch  v.  ^  Demarest  v.  Wynkoop,  3  Johns.  (N. 
Harvey,  lb.  287,  n. ;  "White  v.  Ewer,  2  Y.)  Ch.  129;  Limerick  v.  Voorhis,  9 
Vent.  340  ;  Price  v.  Kopner,  1  S.  &  S.  347.  Johns.  (N.  Y.)  129. 

2  Robinson  v.  Fife,  3  Ohio  St.  5.51.  ^  Demarest  v.  Wynkoop,  3  Johns.  (N. 
8  Amoryt;.  Lawrence,  3  Cliff.  523.    For     Y.)  Ch.  129. 

a  brief  statement  of  the  limitation  of  real         '  And  see  Lamar  v.  Jones,  3  Har.  &  M. 
actions  in  the  several  states,  see  chapter     (Md.)  328. 
xxvi,  §  1193. 

180 


STATUTE   OF   LIMITATIONS   APPLIES   BY    ANALOGY.       [§  1145. 


redeem  from  the  mortgagee  in  possession  will  be  the  same;  as, 
for  instance,  tlie  statute  of  limitations  in  Connecticut  prescribing 
fifteen  years  as  the  period  beyond  which  an  entry  shall  not  be 
made,  a  mortgagor  is  there  barred  by  the  lapse  of  this  period  dur- 
ing which  the  mortgage  title  has  not  been  recognized  by  the  mort- 
gagee in  possession.^  In  a  few  states  special  statutes  have  been 
efiacted  with  reference  to  the  redemption  of  mortgages,  and  a 
synopsis  of  these  statutes,  and  of  the  English  statute  upon  which 
they  are  founded  as  well,  is  given  in  a  note.^ 


1  Jarvis  v.  Woodruff,  22  Conn.  548  ; 
Skinner  v.  Smith,  1  Day  (Conn.),  124; 
Crittendon  v.  Brainard,  2  Root  (Conn.), 
485. 

2  California :  An  action  to  redeem  a 
mortgage  of  real  property,  with  or  with- 
out an  account  of  rents  and  profits,  may 
be  brought  by  the  mortgagor,  or  those 
claiming  under  him,  against  the  mort- 
gagee in  possession,  or  those  claiming 
under  him,  unless  he  or  they  have  con- 
tinuously maintained  an  adverse  posses- 
sion of  the  mortgaged  premises  for  five 
years  after  breach  of  some  condition  of  the 
mortgage.  If  there  is  more  than  one  such 
mortgagor  or  person  claiming  under  him, 
and  one  is  entitled  to  maintain  the  action 
and  others  are  not  so  entitled,  the  person 
entitled  may  redeem  a  divided  or  undi- 
vided part  of  the  mortgaged  premises,  ac- 
cording as  his  interest  may  appear,  and 
have  an  accounting  for  a  part  of  the  rents 
and  profits  proportionate  to  his  interest  in 
the  mortgaged  premises,  on  payment  of  a 
part  of  the  mortgage  money,  bearing  the 
same  proportion  to  the  whole  of  such 
money  as  the  value  of  his  divided  or  un- 
divided interest  in  the  j)remises  bears  to 
the  whole  of  such  premises.  Civil  Code 
of  Procedure,  1872,  §§  346,  347.  Ken- 
tucky :  After  a  mortgagee  of  real  property, 
or  any  person  claiming  uiiilcr  him,  has  had 
fifteen  years'  continued  adverse  ])ossessi()n, 
no  action  shall  be  brought  by  the  mort- 
gagor, or  any  one  claiming  under  him,  to 
redeem  it.  G.  S.  1873,  c.  71,  art.  iv.  §  16. 
Mississippi  :  When  a  mortgagee,  after  a 
forfeiture  of  the  mortgage,  has  obtained 
actual  possession,  or  receipt  of  the  profits 


or  rent  of  the  land  mortgaged,  the  mort- 
gagor, or  any  person  claiming  through 
him,  shall  not  bring  suit  to  redeem  but 
within  ten  years  next  after  the  time  at 
which  the  mortgagee  obtained  such  pos- 
session or  receipt,  unless  in  the  mean  time 
an  acknowledgement  of  the  title  of  the 
mortgagor,  or  of  his  right  of  redemption, 
shall  have  been  given  in  writing,  signed 
by  the  mortgagee,  or  the  person  claiming 
through  him ;  and  in  such  case  no  suit 
shall  be  brought  but  within  ten  years  next 
after  the  time  at  which  such  acknowl- 
edgment, or  the  last  of  such  acknowledg- 
ments if  more  than  one,  was  given ;  but 
such  acknowledgment  shall  be  effectual 
only  as  against,  and  to  the  extent  of  the 
interest  of,  the  party  signing  it.  R.  C. 
1871,  §  2149.  New  Jersey  :  If  a  mortgagee 
and  those  under  him  be  in  possession  of  the 
lands  contained  in  the  mortgage,  or  any 
part  thereof,  for  twenty  years  after  default 
of  payment  by  the  mortgagor,  then  the 
right  or  equity  of  redemption  is  forever 
barred.  Rev.  1877,  p.  507.  North  Caro- 
lina: An  action  for  the  redemption  of  a 
mortgage  where  the  mortgagee  has  been 
in  possession,  or  for  a  residuary  interest 
under  a  deed  of  trust  for  creditors  where 
the  trustee,  or  those  holding  under  him, 
has  been  in  possession,  must  be  brought 
within  ten  years  after  the  right  of  action 
accrued.     Battle's  Revisal,  1873,  p.  149. 

The  English  Statute  of  3  &  4  Will. 
4,  c.  27,  §  28.  —  When  a  mortgagee  shall 
have  obtained  possession  or  receipt  of  the 
profits  of  any  land,  or  the  receipt  of  any 
rent  comprised  in  his  mortgage,  the  mort- 
gagor,  or  any  person  claiming  through 

181 


§  1146.]  WHEN    THK   RIGHT   TO   RKDEKM   IS   BARKED. 

1146.  The  right  to  foreclose  and  the  right  to  redeem  are 
reciprocal.  —  Since  the  rights  of  the  mortgagor  and  mortgagee 
are  reciprocal  and  commensurable,  redemption  under  the  mortgage 
is  cut  off  at  the  expiration  of  the  same  time  that  the  right  to 
foreclose  is  barred.^  In  accordance  with  this  maxim,  it  is  held  in 
California  that  in  case  the  debt  is  foreclosed  in  four  years  the 
right  to  redeem  is  barred  by  the  lapse  of  the  same  period.^  In 
Iowa,  also,  an  action  to  redeem  is  barred  in  ten  years,  the  same 
time  in  which  an  action  at  law  for  the  debt  secured  would  be 
barred.3  The  same  application  of  the  principle  is  made  in  Minne- 
sota, where  in  analogy  to  a  statute  specially  providing  that  an  ac- 

him,  shall  not  bring  a  suit  to  redeem  the  deem,  as  against  the  persons  entitled  to 
mortgage  but  within  twenty  years  next  any  other  undivided  or  divided  part  of  the 
after  the  time  at  which  the  mortgagee  ob-  money,  land,  or  rent.  And  where  such 
tained  such  possession  or  receipt,  unless,  in  of  the  mortgagees  or  persons  aforesaid  as 
the  mean  time,  an  acknowledgment  in  writ-  shall  have  given  such  acknowledgement 
ing  of  the  title  of  the  mortgagor,  or  of  shall  be  entitled  to  a  divided  part  of  the 
his  right  of  redemption,  shall  have  been  land  or  rent  comprised  in  the  mortgage, 
given  to  the  mortgagor  or  some  person  or  some  interest  or  estate  therein,  and 
claiming  his  estate,  or  to  the  agent  of  such  not  to  any  ascertained  part  of  the  mort- 
mortgagor  or  person,  signed  by  the  mort-  gage  money,  the  mortgagor  or  mortgagors 
gagee  or  the  person  claiming  through  him  ;  shall  be  entitled  to  redeem  the  same  divided 
and  in  such  case  no  such  suit  shall  be  part  of  the  land  or  rent,  on  payment  with 
brought  but  within  twenty  years  next  after  interest  of  the  part  of  the  mortgage  money, 
the  time  at  which  such  acknowledgment,  or  which  shall  bear  the  same  proportion  to 
the  last  of  such  acknowledgments  if  more  the  whole  of  the  mortgage  money  as  the 
than  one,  was  given  ;  and  when  there  shall  value  of  such  divided  part  of  the  land  or 
be  more  than  one  mortgagor,  or  more  than  rent  shall  bear  to  the  value  of  the  whole  of 
one  person  claiming  through  the  mort-  the  land  or  rent  comprised"  in  the  mort- 
gagor or   mortgagors,  such   acknowledg-  gage. 

ment,  if  given  to  any  of  such  mortgagors        The  Real  Property  Limitation  Act,  1874, 

or  persons,  or  his  or  their  agent,  shall  be  §  7^  which  goes  into  operation  from  and 

as  effectual  as  if  the  same  had  been  given  after  January  1,  1879,  is  the  same  as  the 

to  all  such  mortgagors  or  persons  ;  but  foregoing,  except  the  time  is  made  twelve 
where  there  shall  be  more  than  one  mort-  years  instead  of  twenty. 
gagee,  or  more  than  one  person  claiming  i  King  v.  Meighen,  20  Minn.  264 
the  estate  or  interest  of  the  mortgagee  Caufman  v.  Sayre,  2  B.  Mon.  202  ;  Koch 
or  mortgagee.s,  such  acknowledgment,  v.  Briggs,  14  Cal.  250;  Grattan  v.  Wig- 
signed  by  one  or  more  of  such  mortgagees  gins,  23  Cal.  34  ;  Cunningham  v.  Haw- 
or  persons,  shall  be  effectual  only  as  against  kins,  24  Cal.  410;  Arrington  y.Liscom,34 
the  person  or  persons  signing  as  aforesaid,  Cal.  372;  Lord  v.  Morris,  18  Cal.  482; 
and  those  claiming  any  part  of  the  mort-  Green  v.  Turner,  38  Iowa,  112, 116  ;  Has- 
money,  or  land,  or  rent,  by,  from,  or     kell  v.  Bailey,  22  Conn.  569. 


under  him  or  them,  and  persons  entitled  ^  Cunningham  v.  Hawkins,  supra. 

to  any  estate  or  interest  to  take  effect  after  8  Smith  v.  Foster,  44  Iowa,  442;  Craw- 

or  in  defeasance  of  his  or  their  estate  or  ford  v.   Taylor,  42  Iowa,  260 ;  Gower  v. 

interest ;  and  shall  not  operate  to  give  the  Winchester,  33  Iowa,  303. 
mortgagor  or  mortgagors  a  right  to  re- 

182 


STATUTE    OF   LIMITATIONS   APPLIES   BY    ANALOGY.       [§§  1147,  1148. 

tiou  to  foreclose  shall  be  commenced  within  ten  years  after  the 
cause  of  action  accrues,  redemption  must  be  made  within  the 
same  time.^  Of  course  this  principle  cannot  be  applied  where  by 
statute,  or  by  operation  of  judicial  construction  of  the  statute,  a 
different  time  is  fixed  for  redemption  from  that  allowed  for  fore- 
closure, as  in  New  York  and  Wisconsin. 

1147.  The  right  of  redemption  in  New  York  and  Wisconsin 
is  barred  in  ten  years.  In  the  former  state  it  is  held  that  inas- 
much as  the  statute  of  limitations,  so  far  as  it  limits  the  recovery 
of  the  possession  of  real  property  to  twenty  years,  does  not  apply 
to  cases  of  which  a  court  of  equity  has  peculiar  and  exclusive  ju- 
risdiction, an  action  by  a  mortgagor  for  redemption  or  for  an  ac- 
counting and  recovery  of  possession  against  a  mortgagee  in  pos- 
session comes  within  the  provision  of  the  statute  limiting  the  time 
for  the  commencement  of  actions  not  otherwise  specified,  and  is 
thereby  limited  to  ten  yeai's  from  the  time  the  right  of  action  ac- 
crues.2  To  a  similar  statute  in  Wisconsin  the  same  construction 
is  given. ^ 

1148.  In  Tennessee  it  is  held  that  the  statute  of  limitations 
does  not  apply  to  a  bill  in  equity  to  redeem  a  mortgage,  because 
redemption  can  only  be  enforced  in  equity,  and  the  statute  does 
not  apply  to  cases  belonging  to  the  exclusive  jurisdiction  of  courts 
of  equity.  "  But  although  equity  does  not  permit  the  statute  of 
limitations  to  be  pleaded  to  the  relief  which  it  affords  to  the  right 
of  redemption,  yet,  in  the  application  of  that  relief,  it  regards 
time  and  discountenances  stale    demands."  *      The  court  would 

1  Holton  V.  Meighen,  15  Minn.  80;  the  lien,  and  then  commenced  an  action 
King  V.  Meighen,  20  Minn.  264 ;  Parsons  for  the  mere  recovery  of  the  possession 
V.  Noggle,  23  Minn.  328.  of  the  land.     It  is  a  sufficient  answer  to 

2  4Kent  Com.  p.  188;  Hubbell  w.  Sibley,  this  that  this  is  not  such  an  action,  but 
50  N.  Y.  468,  affirming  5  Lans.  (N.  Y.)  an  action  for  an  accounting  and  the  re- 
51 ;  Miner  v.  Beekman,  50  N.  Y.  337  ;  covery  of  the  possession  upon  payment 
14  Abb.  (N.  Y.)  Pr.  N.  S.  1 ;  Tibbs  v.  of  what  shall  be  found  due.  This  is  a 
Morris,  44  Barb.  (N.  Y.)  146;  Peabody  u.  pure  equitable  remedy,  and  such  as  was 
Roberts,  47  Barb.  (N.  Y.)  102;  Cleveland  given  by  courts  of  equity  only  while  such 
V,  Boerum,  24  N.  Y.  617.  In  Hubbell  v.  courts  had  a  separate  existence.  By  giv- 
Sibley,  sujira,  Mr.  Justice  Grover,  deliv-  ing  this  answer  it  is  not  intended  to  con- 
ering  the  opinion  of  the  Court  of  Appeals,  cede  that  such  tender  might  have  been 
said:  "  It  is  further  insisted  by  the  counsel  made  by  the  plaintiffs  with  the  effect 
for  the  appellants  that  this  should  be  held  claimed." 

an  action  for  the  recovery  of  real  property,         *  Cleveland  Ins.  Co.  v.  Reed,  24  How. 

for  the  reason  that  the  plaintiffs  might,  284;  Knowlton  r.  Walker,  13  Wis.  264. 
before  its  commencement,  have  tendered         *  Overton  v.  Bigelow,  3  Yerg.  (Tenn.) 

the  amount  due,  and  thereby  discharged  513. 

183 


§§  1149,  1150.]      WHEN   THE  RIGHT   TO   REDEEM   IS   BARRED. 

doubtless  adopt  the  period  of  twenty  yeai's  as  affording  a  pre- 
sumption of  right  in  the  mortgagee,  after  analogy  of  the  statute  of 
limitations.^  The  possession  of  the  mortgagee  is  consistent  with 
the  right  of  the  mortgagor,  unless  it  be  continued  long  enough  to 
afford  such  a  presumption,  which  a  shorter  period  than  twenty 
years  would  not  give.  But  if  the  mortgagee  purchase  an  out- 
standing title,  and  hold  it  adversely  to  the  mortgagor  with  his 
knowledge,  the  statute  which  makes  seven  years'  adverse  posses- 
sion a  bar  to  an  action  to  recover  will  run  in  the  mortgagee's 
favor,  and  will  perfect  the  title  in  him.^ 

1149.  The  mortgagee's  possession  must  be  adverse  during 
the  whole  period,  and  therefore  if,  at  the  time  of  his  entry,  he  is 
entitled  to  an  interest  in  the  equity  of  redemption,  or  if  he  sub- 
sequently acquires  such  an  interest,  as,  for  instance,  a  tenancy  for 
life,  he  loses  the  benefit  of  the  statute.^  Time  will  not  run  in  his 
favor  so  long  as  his  interest  in  the  equity  of  redemption  con- 
tinues. 

1150.  The  mortgagee's  possession,  when  adverse,  operates 
equally  against  a  married  woman  who  has  made  the  mortgage. 
She  is  in  no  way  protected  by  her  coverture  from  the  effect  of  the 
adverse  possession  of  the  mortgagee.  The  adverse  possession  is 
against  the  equitable  right  of  the  mortgagor  to  redeem,  and  the 
limitation  is  an  equitable  one  in  analogy  to  the  statute  of  limita- 
tions at  law  ;  and  it  is  regarded  as  equitable  that  a  wife  should 
lose  her  right  in  equity  to  redeem  when  there  has  been  such  a 
lapse  of  time  as  would  in  equity  bar  any  other  mortgagor.  The 
privileges  and  exemptions  of  married  women  should  be  curtailed 
as  their  separate  rights  in  regai'd  to  their  pi'operty  are  recognized. 
Having  voluntarily  placed  herself  in  the  position  of  a  mortgagor 
she  must  accept  the  usual  incidents  of  the  position,  and  her  equi- 
table right  to  redeem  is  lost  when  there  has  been  such  a  lapse  of 
time  as  would  bar  the  right  of  any  other  mortgagor.^ 

1  In    Yarbrough   v.   Newell,    10   Yerg.  itations  is  for  a  shorter  period,  that  the 

376,  the  court,  in  affirming  the  doctrine  courts  of  equity  have   reduced   the  time 

laid  down  in  Overton  v.   Bigelow,  say:  within  which  a  mortgage  may  be  redeemed 

"In  those  states  of  the  Union  where  the  to  that  period." 

time  fixed  by  the  statute  of  limitations  is  2  Gudgcr  v.  Barnes,  4  Heisk.  (Tenn.) 

twenty  years,  the  courts  of   equity   have  570;  Wallen  i;.  Huff,  5  Humph.  (Tenn.) 

taken  the  same  time   '  as  the  presumption  91,  94. 

of  right'  in  a  mortgagee.     But  we  know  *  Hyde    v.    Dallaway,    2    Hare,   528; 

of  no  case,  either  in  this  state  or  any  of  Raffety  v.  King,  1  Keen,  601. 

the  other  states,  where  the  statute  of  lim-  ^  Hanford  v.  Fitch,  41  Conn.  486. 

184 


WHEN   THE   STATUTE   BEGINS   TO   RUN.       [§§  1151,  1152. 

1151.  Successive  disabilities  of  mortgagor.  —  To  entitle  the 
mortgagor  to  the  benefit  of  a  disability,  it  must  be  one  that  ex- 
isted at  the  time  the  right  to  redeem  first  accrued ;  and  though  if 
several  disabilities  existed  together,  the  statute  does  not  begin  to 
run  until  the  party  entitled  to  redeem  has  survived  all  of  them, 
yet  successive  or  cumulative  disabilities  are  not  allowed.  "  If  disa- 
bility could  be  added  to  disability,"  says  Chancellor  Kent,  "  claims 
might  be  protracted  to  an  indefinite  extent ;  "  ^  and  he  quotes  an 
expression  of  Lord  Eldon,  that  "  a  right  might  travel  through  mi- 
norities for  two  centuries." 

2.    IVJien  the  Statute  begins  to  run. 

1152.  So  long  as  the  relation  of  mortgagor  and  mortgagee 
exists  the  statute  does  not  commence  to  run  in  favor  of  either 
the  mortgagor  or  the  mortgagee.^  That  relation  must  be  termi- 
nated in  some  way  before  either  party  in  possession  can  interpose 
the  statute  as  a  defence  against  the  other.  As  against  the  mort- 
gagor this  relation  is  generally  terminated  when  the  mortgagee, 
after  a  breach  of  the  condition,  enters  and  holds  possession  of  the 
mortgaged  property.  Such  possession,  whether  it  be  for  the  pur- 
pose of  receiving  the  rents  and  profits,  or  for  the  purpose  of  fore- 
closure,^ or  for  the  purpose  of  wresting  the  property  from  the 
mortgagor,  is  equally  effectual.  When,  however,  by  the  terms  of 
the  mortgage,  or  by  subsequent  agreement,  the  mortgagee  is  to 
take  and  hold  possession  of  the  property  until  he  shall  satisfy  his 
claim  from  the  rents  and  profits,  his  possession  does  not  become 
adverse  until  his  demand  has  been  satisfied  from  this  source,  or  he 
asserts  an  absolute  title  in  himself,  and  gives  distinct  notice  of  it 
to  the  mortgagor.* 

1  Demarest  v.   Wynkoop,  3  Johns.  (N.  was  decided  that  when  the  causes  of  disa- 

Y.)  Ch.  139,  and  numerous  cases  cited.  bility  overlap,  the  di.sahility  continues  sub- 

The  disabilities  of  the  mortgagee  which  ject  to  the  extreme  limitation  provided. 

may  give  him   an   extension  of   time  are  ^  Waldo  v.  Rice,  14  Wis.  286;  Green  v. 

limited  by  the  English  statute  to  the  ex-  Turner,  38  Iowa,  112,  118;    Crawford  v. 

treme  period  of  forty  years  in  all,  under  Taylor,  42  Iowa,  260  ;  and  see  Humj)hrey 

Stat.  3  &  4  Wm.  4,  c.  27,  §§  16,  17,  and  v.  Hurd,  26  Mich.  44;    Rockwell   v.  Ser- 

to  thirty  years,  under  Stat.  37  &  38  Vict,  vant,  66  111.  424. 

c.  57.    Much  doubt  had  been  entertained  as  ^  Montgomery    v.    Chadwick,   7    Iowa, 

to  the  effect  of  successive  disabilities  under  114  ;  Bailey  v.  Carter,  7  Ired.  (N.  C.)  Eq. 

the  former  statute  until   the  case  of  Bor-  282. 

rows  V.  Ellison,  L.  R.  6  Ex.  128,  where  it  «  Anding  v.  Dadis,  38  Miss.  574;  Kohl- 

185 


§§  1153-1155.]       WHEN   THE   RIGHT    TO   REDEEM   IS   BARRED. 

1153.  As  to  a  Welsh  mortgage.  —  A  mortgage  containing 
such  an  agreement  is  in  the  nature  of  a  Welsh  mortgage,  and 
from  the  very  nature  of  the  agreement  it  is  constantly  renewed 
by  the  receipt  of  the  rents  and  profits  in  payment  of  interest  or 
in  discharge  of  the  debt.  The  mortgagee's  possession  is  of  the 
essence  of  the  contract  ;  he  holds  the  estate  subject  to  perpetual 
account.^  Time  will  not  bar  the  mortgagor,  unless  the  mortgagee 
disclaims  the  mortgage  and  gives  him  notice  in  effect  that  he  holds 
in  defiance  of  his  title ;  or  a  sufficient  length  of  time  to  consti- 
tute a  bar  has  elapsed  since  the  principal  and  interest  of  the 
mortgage  has  been  paid  from  the  rents  and  profits. ^  The  mort- 
gagor could  in  equity,  doubtless,  compel  an  account,  which  would 
show  when  the  mortgage  was  paid.^ 

1154.  The  mortgagee's  possession  runs  against  those  en- 
titled to  the  estate  in  remainder  as  well  as  against  the  tenant 
for  life,  and  if  his  possession  has  continued  for  twenty  years  be- 
fore the  title  of  the  remainder-man  accrued,  the  bar  is  as  effectual 
against  him  as  it  was  against  the  life-tenant,  who  had  the  imme- 
diate right  to  redeem  during  the  whole  period  of  his  possession.* 
The  rule  is  the  same  in  case  the  tenancy  during  the  possession 
was  by  the  curtesy,^  or  by  right  of  dower.^ 

1155.  If  the  mortgagor  retains  possession  of  a  part  of  the 
mortgaged  premises,  though  the  mortgagee  be  in  possession  of  the 
remainder,  no  lapse  of  time  will  bar  the  right  of  redemption  of 
the  entire  estate.^  The  right  existing  as  to  any  part,  it  must 
exist  as  to  the  whole,  for  as  a  general  rule  there  can  be  no  re- 
demption of  separate  parts.  If  the  mortgagor  has  constructive 
possession,  as  when  the  mortgagee  has  entered  under  a  lease,  or 
an  agreement  amounting  equitably  to  a  lease,  the  statute  will  not 

heim  v.  Harrison,  34  Miss.  457  ;  Frink  v.  v.  White,  2  De  G.  &  J.  97  ;  Talbot  v.  Brad- 

Le  Roy,  49  Cal.  314;    and   see  Quint  v.  dil,  1    Vera.  395;    Lawley  v.  Hooper,    3 

Little,  4  Me.  495.  Atk.  280;  Fenwick  v.  Reed,  1  Mer.  115. 

1  Fenwick  u.  Reed,  1  Mer.  114  ;  Orde  v.  8  Fulthorpe  v.  Foster,  1  Vern.  477. 

Hemint,',  1  Vern.   418;  Balfe  v.  Lord,  2  *  Harrison  v.  Hollins,  1  Sim.  &  St.  471 ; 

D.  &  W.  480;  Morgan  y.' Morgan,  10  Ga.  Ashton  v.  Milne,  6  Sim.  369  ;  Dallas  v. 

297;  Marks  v.  Pell,  1  Johns.  (N.  Y.)  Ch.  Floyd,  lb.  379. 

594.      So  under  an    arrangtment  for  re-  ^  Anon.  2  Atk.  333. 

payment  by  annuities.     Teulon  v.  Curtis,  6  Lockwood     v.    Lockwood,     1      Day 

1  Younge,  616.  (Conn.),  295. 

'■^  Yates  V.   Hambly,  2  Atk.  360;  Lon-  ■?  Burke  v.  Lynch,  2  Ba.    &   Be.  426; 

guet  V.  Scawen,  1  Ves.  Sen.  403 ;  Alderson  Rakestraw  v.  Brewer,  Sel.  Ca.  in  Ch.  56. 

186 


WHEN   THE   STATUTE   BEGINS   TO    RUN.       [§§  1156,  1157. 

begin  to  run  against  the  right  of  redemption  until  the  mortgagee 
ceases  to  hold  under  such  lease.^ 

It  may  happen,  however,  that  a  part  of  an  estate  may  become 
irredeemable  while  the  right  of  redemption  is  not  lost  as  to  the 
residue.  2 

1156.  Cause  of  action  accrues  when  mortgagee  enters. — 
The  cause  of  action  against  the  mortgagee  does  not  accrue  when 
the  money  secured  by  the  mortgage  becomes  due,  but  only  when 
the  mortgagee  enters  into  possession.^  Until  then  the  plaintiff 
has  no  occasion  for  this  remedy  to  regain  possession.  The  pos- 
session may  be  explained,  so  that  it  is  not  so  much  the  posses- 
sion itself  as  the  nature  of  it  that  operates  as  a  bar  to  the  right 
to  redeem  ;  but  the  presumption  is  that  the  possession  is  adverse 
after  an  entry  upon  a  default  in  the  mortgage.  When  the  mort- 
gagee has  entered,  not  as  mortgagee  only,  but  by  virtue  of  having 
a  limited  interest  in  the  equity  of  redemption,  as,  for  instance,  a 
life  estate,  it  is  held  that  time  will  not  run  in  his  favor  during 
the  continuance  of  that  interest,  for  it  would  be  his  duty  to  keep 
down  the  interest  on  his  mortgage  in  favor  of  the  remainder- 
men.* 

As  against  the  owner  of  the  equity  of  redemption,  the  statute 
does  not  begin  to  run  until  the  mortgagee  takes  actual  and  open 
possession  of  the  mortgaged  premises  ;  and  it  does  not  begin  then 
if  he  holds  merely  under  his  mortgage  title  and  recognizes  the 
mortgagor's  right  of  redemption.^ 

1157.  After  twenty  years'  possession  by  the  mortgagee  it 
lies  with  the  mortgagor  to  show  that  the  effect  is  not  a  bar 
of  his  right  of  redemption.  "  The  onus  lies  on  the  mortgagor  to 
show  that  fact,  in  order  to  defeat  the  effect  of  the  possession."  ^ 
The  presumption  is  that  the  right  of  redemption  is  gone  after  the 

1  Archbold  v.  Scully,  9  II.  L.  360 ;  Drum-  gagee,  without  claiming  in  fee  or  by  any 
mond  V.  Sant,  6  L.  R.  Q.  B.  763.  other  title  ;  but  as  in  that  case  the  mort- 

2  Lake  v.  Thomas,  3  Vcs.  Jun.  17.  gagee  claimed  by  a  foreclosure  title,  there 
8  Hubbcll  V.  Sibley,  50  N.  Y.  468;  Pea-    was  no  occasion  for  deciding  this  point. 

body  V.  Roberts,  47    Barb.    (N.  Y.)    91;  *  Story's  Eq.   Jur.   §   1028;    Reeve  v. 

Miner  y.Beekman,  50  N.  Y.  337  ;  14  Abb.  Hicks,  2  S.  &  S.  403;  RaflFety  v.  King,  1 

Pr.   N.    S.  1  ;   Knowlton   v.   Walker,    13  Keen,  601,  618;    Seagram  v.  Knight,  L. 

Wis.  264  ;  Waldo  v.  Rice,  14  Wis.  286.  R.  2  Ch.  632,  per  Chelmsford,  L.  C. 

In  Miner   v.   Beekman,  supra,   it   was  ^  Knowlton  v.  Walker,   13    Wis.   264; 
suggested  that  perhaps  the  cause  of  action  Waldo  v.  Rice,  24  Wis.  286. 
does  not  accrue  so  long  as  the  mortgagee  ^  Per  Sir  Wm.  Grant  in  Barron  v.  Mar- 
continues  in  possession  avowedly  as  mort-  tin,  19  Ves.  326. 

187 


§  1158.]  WHEN   THE   RIGHT   TO  REDEEM   IS   BARRED. 

mortgagee's  possession  has  continued  for  this  period  of  time.  But 
any  act  done,  or  acknowledgment  made  by  hira  in  the  mean  time, 
evincing  his  recognition  of  the  mortgage  as  such,  may  be  offered 
to  repel  this  presumption.  Although  possession  by  the  mortgagee 
has  continued  long  enough  to  give  him  presumptive  title,  the  nat- 
ure of  his  possession  is  what  really  determines  the  rights  of  the 
parties,  and  a  great  variety  of  facts  and  circumstances  may  be 
adduced  to  show  it  is  b}^  virtue  of  the  mortgage  only,  and  conse- 
quently does  not  bar  the  right  to  redeem. ^ 

A  bill  to  redeem  which  shows  that  the  mortgagee  has  been  in 
possession  for  twenty  years  or  more  must  distinctly  aver  the 
grounds  upon  which  the  possession  does  not  constitute  a  bar.  A 
bill  brought  thirty-four  years  after  the  maturity  of  the  mortgage, 
which  averred  that  the  mortgagee's  possession  was  not  continuous 
and  adverse  for  the  period  of  twenty  years,  but  did  not  aver  that 
the  possession  was  taken  within  that  period,  and  gave  no  excuse 
for  the  delay  in  bringing  the  bill,  was  dismissed,  because  the  aver- 
ments were  too  uncertain  to  found  a  right  to  redeem  upon.''^ 

1158.  Mere  constructive  possession  by  the  mortgagee  for 
twenty  years  will  not  raise  a  presumption  that  the  title  has  be- 
come absolute  in  him ;  and  the  fact  that  the  mortgaged  premises 
were  wild,  uncleared  lands  will  not  avail  a  mortgagee  as  against 
the  mortgagor,  although  the  former  has  the  legal  title,  and  the 
courts  have  adopted  a  rule  as  to  such  lands  that  the  possession 
follows  the  right ;  for  the  purpose  of  the  rule  is  to  protect  the 
owner  of  such  lands  from  intrusion  and  trespass.^  Nothing  short 
of  actual  possession  by  the  mortgagee  continued  for  the  time 
required  by  statute,  without  accounting  or  admitting  that  he  is 
merely  a  mortgagee,  but  under  a  claim  of  absolute  ownership,  will 
avail  to  convert  his  mortgage  title  into  a  title  absolute  in  equity.* 
Payment  of  taxes  on  wild  land  will  not  avail.^  An  occasional 
occupation  of  the  premises  will  not  avail.  The  occupation  must 
be  a  continuous  and  notorious  one,  adverse  to  the  right  to  redeem.^ 
A  conveyance  by  the  mortgagee  purporting  to  give  an  absolute 
title  to  the  mortgaged  property  does  not  work  a  disseisin  of  the 

1  Robinson  u.  Fife,  3  Ohio  St.  551.  <  Miner  v.   Beekman,    50  N.   Y.  337; 

2  Reynolds  v.  Green,  10  Mich.  355.  Demarest  v.  Wynkoop,  3  Johns.  (N.  Y.) 
8  Moore  v.  Cable,  1  Johns.  (N.  Y.)  Ch.     Ch.  129. 

387;  Slee  v.  Manhattan,  1  Paige  (N.  Y.),         ^  Bollinger  v.  Chouteau,  20  Mo.  89. 
48.  8  Humphrey  v.  Hurd,  29  Mich.  44. 

188 


WHEN   THE   STATUTE   BEGINS   TO   RUN.  [§  1159. 

mortgagor,  but  passes  only  the  mortgage  title.  ^  Nor  does  an  ab- 
solute conveyance  of  a  portion  of  the  mortgaged  premises  by  the 
mortgagor  while  the  mortgagee  is  in  possession  disseise  him  or  in- 
terrupt his  possession.  "  Possession  in  the  mortgagee  must  at  its 
commencement  have  been  taken  under  the  engagement  which 
equity  always  implies,  to  account  as  a  bailiff  for  the  rents  and 
profits  with  the  mortgagor,  and  to  apply  them  to  the  discharge 
of  the  mortgage  debt.  If  this  be  not  punctually  and  regularly 
done,  and  the  account  fairly  and  properly  kept  by  the  mortgagee, 
it  is  a  violation  of  the  implied  engagement  under  which  he  holds 
the  possession.  The  possession  is  all  along  consistent  with  the 
equitable  title  of  the  mortgagor,  who  may  be  disabled  by  poverty 
and  distress  to  enforce  the  account  and  redemption.  Yet  such  is 
the  prevalence  of  analogy  in  equit}',  that  even  under  such  circum- 
stances the  possession  of  the  mortgagee  for  twenty  years,  without 
a  recognition  of  the  mortgage  title,  or  any  account  kept  upon  the 
footing  of  it,  becomes  a  subject  of  equitable  bar  to  redemj)tion, 
notwithstanding  a  clear  title  to  redemption  in  the  one  party,  and 
on  the  other  a  continued  misapplication  of  the  rents  and  profits  of 
the  estate  committed  to  his  care,  contrary  to  his  engagement,  and 
a  continued  breach  of  duty  from  the  beginning  to  the  end  of  the 
period,  in  omitting  to  keep  the  account."  ^  But  if  for  twenty 
years  the  mortgagor  has  paid  neither  principal  nor  interest,  and 
there  have  been  no  dealings  between  him  and  the  mortgagee,  there 
is  presumptive  evidence  of  foreclosure.^ 

1159.  After  a  mortgagee  in  possession  has  received  pay- 
ment of  the  debt,  he  really  holds  the  property  in  trust  for  the 
mortgagor,  and  the  statute  of  limitations  will  not  run  in  his  favor 
until  by  some  further  act  he  shows  that  his  possession  and  claim 
have  become  adverse.  This  rule  is  equally  applicable  to  the  case 
of  an  absolute  deed  given  to  secure  a  debt  and  treated  by  the  law 
as  a  mortgage.*  The  statute  does  not  begin  to  run  against  the 
right  to  redeem  such  a  mortgage  until  a  tender  and 'refusal  of  the 
money  secured  by  it ;  *^  or  at  least  until  the  mortgagee  denies  the 
right  of  the  mortgagor  to  redeem  and  the  mortgagor  has  actual 

1  Humphrey  v.  Hurd,  29  Mich.  44;  ^  Hurd  v.  Colenian,42  Me.  182  ;  Blcthen 
Dexter  v.  Arnold,  2  Sumner,  108;  Dau-  v.  Dwinal,  35  Me.  556;  Phillips  v.  Siu- 
iels  V.  Mowry,  1  R.  I.  151.  clair,  20  Me.  269, 

2  Cholmondelcy  v.  Clinton,  2  Jac.  &  *  Green  i;.  Turner,  38  Iowa,  112. 
W.  187,  per  Sir  Thomas  Plunier,  Master  6  Wilson  v.  Richards,  1  Neb.  342. 
of  the  Rolls. 

189 


§§  IIGO,  11  Gl.]       WHEN   THE   RIGHT    TO   REDEEM   IS   BARRED. 

notice  of  such  denial,  or  of  the  mortgagee's  adverse  holding,  as 
in  cases  where  the  mortgagee  has  entered  under  an  agreement  to 
account  for  the  rents. ^ 

The  possession  of  a  mortgagee  after  he  lias  received  payment 
of  the  debt  will  not  be  regarded  as  a  holding  adversely  to  the 
mortgagor,  unless  some  act  other  than  mere  possession  under  the 
mortgage  be  shown  to  establish  the  adverse  character  of  his  posses- 
sion. After  payment  he  holds  the  premises  for  the  mortgagor  as 
a  trustee.^ 

1160.  The  right  to  redeem  a  junior  mortgage  accrues  at  its 
maturity,  so  that  the  statute  of  limitations  then  begins  to  run 
against  it ;  though  it  has  been  suggested  that  it  may  begin  to  run 
upon  the  maturity  of  the  prior  mortgage.^ 

The  right  of  a  remainder-man  to  redeem  from  a  mortgagee  in 
possession  under  the  owner  of  the  precedent  estate  does  not  begin 
to  run  until  that  estate  is  terminated.^ 

1161.  After  a  foreclosure  sale  the  statute  runs  from  the  ex- 
piration of  the  year  of  redemption.  Where  a  purchaser  under 
a  foreclosure  sale  relied  upon  the  statute  of  limitations  to  sustain 
his  title  against  redemption  by  the  mortgagor,  it  appeared  that 
the  suit  to  redeem  was  commenced  about  twenty-one  years  after 
the  recovery  of  judgment  in  the  foreclosure  suit  and  the  sale  un- 
der it ;  but  a  little  less  than  twenty  years  from  the  time  the  pur- 
chaser was  entitled  to  a  deed  of  the  land,  one  year  being  allowed 
by  law  after  the  sale  for  redemption.  It  was  held,  however,  that 
the  suit  to  redeem  was  seasonably  brought,  because  the  mortgagor 
was  entitled  to  the  possession  during  the  year  without  any  lia- 
bility to  account  for  the  rents  and  profits,  and  the  purchaser  in 
the  mean  time  had  only  a  certificate  of  purchase,  and  no  legal  title 
or  right  to  the  property  vested  in  him  until  he  received  a  deed 
from  the  officer  after  the  expiration  of  the  year.  The  mere  re- 
covery of  judgment  did  not  terminate  the  relation  of  mortgagor 
and  mortgagee,  and  during  the  year  allowed  for  redemption  the 
mortgage  remained  a  lien  upon  the  premises.^ 

1  Yarbroughy.  Newell,  10  Yerg.(Tenn.)  *  Fogal  v.  Pirro,  17  Abb.  (N.  Y.)  Pr. 
376  ;  Hammonds  v.  Hopkins,  3  lb.  525.  113  ;  10  Bosw.  100. 

2  Green  v.  Turner,  38  Iowa,  112.  &  Rockwell  v.  Servant,  63  111.  424. 

3  Gower  v.  Winchester,  33  Iowa,  303. 

190 


WHAT   PREVENTS   THE   RUNNING    OF   THE   STATUTE.       [§§  1162-1164. 

3.    What  prevents  the  Running  of  the  Statute. 

1162.  An  acknowledgment  will  not  be  inferred  from  equivo- 
cal expressions.  A  mortgagee,  in  answer  to  a  letter  written 
him  by  the  solicitor  of  a  subsequent  incumbrancer,  replied  by  let- 
ter, saying :  "  I  deny,  though  with  all  due  courtesy,  the  claim  of 
your  client.  I  need  only  add  that,  if  he  were  entitled  to  the  ac- 
count, it  would  be  of  no  use,  as  the  rents  and  profits  of  the  estate 
have  never  been  sufficient  to  pay  the  interest  of  the  first  charge." 
It  was  contended  that  by  this  letter  he  acknowledged  that  he  held 
under  a  mortgage  title,  and  that  this  was  all  that  was  necessary  ; 
but  the  Master  of  the  Rolls  said  that  this  view  was  a  misappre- 
hension of  what  is  required  in  an  admission,  which  must  be,  not 
that  the  mortgagee  holds  under  a  mortgage  title,  but  that  some 
one  has  the  right  to  redeem.  "  This  letter,  beginning  as  it  did 
with  an  express  denial  of  the  plaintiff's  claim,  could  not  be  treated 
as  an  acknowledgment  of  his  right  to  redeem.  If  this  were  so,  no 
one  could  safely  answer  a  solicitor's  letter  except  to  say  that  he 
refused  to  give  any  reply."  ^ 

t  1163.  An  acknowledgment  made  after  the  expiration  of  the 
twenty  years  by  the  mortgagee  while  in  possession  has  the  same 
effect  as  one  made  before,  not  only  as  against  himself,  but  also  as 
against  all  persons  claiming  under  him,  or  claiming  an  estate  in 
remainder.^  "  If  his  admission  had  any  effect  at  all,  it  must  have 
restored  the  original  character  of  the  mortgage,  and  must  have 
given  to  those  entitled  to  redeem  the  right  of  recovering  the  legal 
estate  on  payment  to  him  of  the  mortgage  money  in  his  character 
of  executor."  ^  But  it  is  said  that  after  the  twenty  years  have 
passed  stronger  words  and  acts  are  required  to  constitute  an  ad- 
mission of  the  right  of  redemption  than  would  have  been  requisite 
while  the  mortgagor  clearly  had  this  right.* 

1164.  Acknowledgment  to  a  third  person.  —  Except  as  re- 
quired by  recent  statutes,  an  acknowledgment  of  the  mortgage  as 

1  Thompson  v.  Bowyer,  9   Jur.  N.  S.     G.,  F.  &  Jo.  81  ;  Stansfield  v.  Hobson,  3 
863;  11  W.  R.  975.  De  G.,  Mac.  &  G.  620  ;  16  Beav.  2.36. 

The   Master  of   Rolls,  Lord   Romilly,  This  rule  applies  since  the  passing  of 

declared  the  authorities  on  the  question,  the  Statute  of  Will.  4  as  well  as  before, 

what  constitutes  a  sufficient  acknowledg-  ^  Per  Sir  John  Stuart,  Vice-Chancellor, 

ment,  to  be  difficult  to  reconcile.  in  Pendleton  v.  Routli,  1  Giff.  35. 

2  Pendleton  v.  Routh,  I  Giff.  35  ;  1  De  *  Whiting  v.  White,  Coop.  1  ;   2  Cox, 

290;  Barron  v.  Martin,  Coop.  189. 

191 


§§  1165,  1166.]       WHEN    THK   RIGHT    TO   REDEEM   IS    BARRED. 

a  subsisting  security  would  operate  to  keep  the  right  of  redemp- 
tion open,  although  not  made  to  the  mortgagor,  but  in  transactions 
with  other  persons,  and  to  which  the  mortgagor  was  a  stranger, 
as  in  an  assignment  or  deed  to  a  third  person.  In  England,  since 
the  Statute  of  3  &  4  Will.  4,  c.  27,  the  admission  must  be  made 
to  the  mortgagor  himself,^  or  to  his  agent,^  though  this  require- 
ment has  been  the  subject  of  some  criticism.^  An  assignment  of 
the  mortgage  subject  to  redemption  is  then  no  longer  a  sufficient 
acknowledgment,  because  the  assignee  is  not  a  claimant  of  the 
mortgagor's  estate,  but  of  the  mortgagee's  ;  *  unless,  however,  the 
mortgagor  or  one  claiming  under  him  be  made  a  party  to  the  as- 
signment, when  the  requirement  would  be  answered.^ 

1165.  The  mortgagee's  acknowledgment  is  binding  upon  all 
who  hold  under  him,  as,  for  instance,  his  lessee.^  And  so  persons 
claiming  in  remainder  under  the  mortgagee's  will  are  bound  by  an 
admission  of  the  mortgage  title,  made  by  his  devisee  in  tail  sub- 
ject to  remainders  over,  by  a  purchase  of  the  title  of  the  owners 
of  the  equity  of  redemption,  notwithstanding  they  had  been  out 
of  possession  more  than  thirty  years  prior  to  the  mortgagee's 
death  :  their  title  was  revived  by  the  acknowledgment,  and  the 
tenant  in  tail  by  means  of  it  acquired  the  absolute  ownership  as 
against  the  devisees  in  remainder." 

1166.  By  rendering  an  account.  —  There  are  many  cases  in 
which  it  has  been  held  that  the  rendering  by  the  mortgagee  of  an 
account  of  the  amount  due  upon  the  mortgage  within  twenty 
years  after  his  entry  does  away  with  the  presumption  of  title  in 
him,  and  lets  the  mortgagor  in  to  redeem.^  Whether  accounts 
kept  by  the  mortgagee  in  his  own  books  would  have  this  effect 
without  some  communication  on  the  subject  to  the  mortgagor  may 
well  be  doubted.^  Accounts  kept  by  the  mortgagee's  agent,  and 
delivered  to  the  mortgagor  without  authority,  are  held  not  to  have 

1  Lucas  V.  Dennison,  13  Sim.  584.  ®  Edsell  v.  Buchanan,  2  Ves.  Jun.  83, 

2  Trulock  u.  Robey,  12  Sim.  402  ;  2  Ph.     and   cases   cited;   Proctor  v.    Cowper,   2 
396.  Vern.  277  ;  Anon.  2  Atk.  333  ;  Hordle  v. 

8  Stansfield  v.  Ilobson,  3  De  G.,  Mac.  Healey,  1  Madd.  181. 
&  G.  620.  9  Barron  v.  Martin,  19  Ves.  327 ;  Fair- 

*  Lucas  V.  Dennison,  13  Sim.  584.  fax  v.  Montague,  cited  2  Ves.  Jun.  84 ; 

5  Batchelor  v.  Middleton,  6  Hare,  75.  Campbell  v.  Beckford,  cited  4  Ves.  474 ; 

®  Ball  V.  Lord  Hiversdale,  Beat.  550.  Lake  v.  Thomas,  3  Ves.  17,  22;  Hansard 

■^  Pendleton  v.  Routh,  1  De  G.,  F  &  Jo.  v.  Hardy,  18  Ves.  455;  Price  v.  Copner, 

81  ;  1    Giff.  35;  5  Jur.  N.  S.  840;  6  lb.  1  S.  &  S.  347. 
182. 

192 


WHAT   PREVENTS   THE   RUNNING   OF   THE   STATUTE.       [§§  1167,  1168. 

this  effect.^  Under  statutes  requiring  the  acknowledgment  to  be 
made  to  the  mortgagor  or  his  agent,  it  would  seem  to  be  clear  that 
a  mortgagee's  account  of  rents  received  by  him  would  not  have 
the  effect  of  defeating  the  bar  created  by  his  possession  unless 
communicated  in  writing  directly  to  the  mortgagor  or  his  agent.^ 

1167.  Acknowledgment  by  letter.  —  An  acknowledgment  by 
a  moi'tgagee  in  the  way  of  a  letter  written  by  him  to  the  mort- 
gagor or  his  solicitor  is  sufficient.^  A  mortgagee  having  been  in 
possession  more  than  twenty  years,  the  solicitor  of  the  mortgagor 
wrote  to  him  requesting  to  know  where  he  could  see  him  upon  the 
subject  of  the  mortgage.  The  mortgagee  replied  by  letter,  say- 
ing, "  I  do  not  see  the  use  of  a  meeting  either  here  or  at  Man- 
chester, unless  some  party  is  ready  with  the  mone}^  to  pay  me 
off."  It  was  held  that  this  was  a  sufficient  acknowledgment  by 
the  mortgagee  that  he  held  a  redeemable  estate  in  the  property 
to  exclude  the  application  of  the  statute  of  limitations. 

1168.  Acknowledgment  may  be  made  by  an  assignment  of 
the  mortgage  as  security  for  a  debt,  or  by  any  form  of  an  assign- 
ment which  treats  the  mortgage  as  redeemable.*  It  does  not 
matter  that  the  mortgagor  is  not  a  party  to  the  transaction. 

Now  under  the  English  statute,  however,  an  assignment  of  a 
mortgage  subject  to  the  equity  of  redemption  is  not  a  sufficient 
acknowledgment  to  make  the  estate  redeemable,  because  it  is  not 
an  acknowledgment  made  to  the  party  entitled  to  the  equity  of 
redemption.^     But  aside  from  this  requirement,  such  an  assign- 

1  Barron  v.  Marlin,  9  Coop.  189.  be  ready  at  the  moment  with  the  money, 

2  See  Baker  v.  Wetton,  14  Sim.  426  ;  because  accounts  had  to  be  taken,  and  the 
Richardson  v.  Young,  L.  R.  10  Eq.  297.  balance  ascertained.     The  letter  therefore 

8  Stansficld  v.  Hobson,  3  De  G.,  M.  &  appears  to  me  to  have  left  it  open  to  the 
G.  620;  16  Beav.  2.36.  It  was  contended  mortgagor  to  come  to  this  court  to  have 
in  this  case  that  the  right  of  rt-demption  the  balance  ascertained  upon  the  state- 
was  not  acknowledged  to  any  particular  ment  that  he  was  ready  to  pay  off  the 
person  in  accordance  with  the  Statute  3  &  money." 

4  Will.  4,  c.  27,  §  28.    See  statute  quoted  *  Hardy  v.  Reeves,  4  Ves.  466  ;  Smart 

§  1171.     But    the   Lord   Justice   Knight  v.  Hunt,  lb.  478,  note ;  Borst  v.  Boyd,  3 

Bruce  said  that  the  letter  must  be  under-  Sandf.  (N.  Y.)  Ch.  501. 

stood  as  acknowledging  a  title   to  redeem  ^  Lucas  v.  Dcnnison,  13  Sim.  .584. 

in  the  person  on  whose  behalf  the  solicitor  Upon  this  requirement   of   the   statute 

wrote.  Vicc-Chancellor  Wigram,  in  Batchelor  v. 

It  was  also  contended  tliat  the  acknowl-  Middletou,  6  Hare,  75,  remarked  :  "  Why, 

edgment  was  conditional  upon  some  one  however,  the  mortgagee  should  not  be  al- 

being  ready  to  pay  the  money.     "I  think,  lowed  to  make  an  admission  (in  writing, 

however,"  said  Lord  Justice  Turner,  "  that  signed  by  himself)  of  his  mortgage  title  to 

the  letter  could  not  mean  that  one  was  to  a  third  person,  of  which  the  mortgagor 

VOL.  II.                                     13  193 


§§  1169-1171.]       WHEN   THE   RIGHT   TO   REDEEM   IS   BARRED. 

nient  would  be  iin  ucknowledgment  of  the  mortgage  title  such  as 
would  make  a  renewal  of  it  from  that  time. 

1169.  By  recital  in  deed.  —  In  like  manner  the  recital  of  the 
mortgage  in  a  deed  by  the  mortgagee  is  a  sufficient  admission  of 
it,^  and  so  is  the  recital  of  it  in  his  will,  by  which  he  directs  a  cer- 
tain disposition  of  the  money  in  case  the  mortgage  should  be  re- 
deemed.2  But  under  a  statute  requiring  the  acknowledgment  to 
be  made  to  the  mortgagor  or  his  agent,  a  recital  in  a  deed  to  a 
third  person  or  in  a  will  is  insufficient.^ 

1170.  The  mortgagee  recognizes  the  mortgage  as  a  subsist- 
ing lien  by  commencing  proceedings  to  foreclose  it,  either  by 
action  or  by  advertisement,  and  the  mortgagor  may  thereafter, 
within  twenty  years,  file  a  bill  for  redemption  and  for  an  account 
of  the  rents  and  profits.*  Such  too  is  the  effect  of  proceedings 
taken  meanwhile  to  enforce  the  mortgage  debt,  although  they  be 
irregular  and  ineffectual.^  It  would  be  wholly  inconsistent  for 
the  mortgagee  to  claim  that  there  is  no  right  of  redemption  after 
he  has  undertaken  by  such  proceedings  to  bar  such  a  right.  The 
giving  of  notice  under  a  power  of  sale,  or  under  a  statute  regulat- 
ing foreclosure  by  advertisement,  is  an  admission  of  a  right  to  re- 
deem. This  is  in  effect  an  invitation  to  the  owner  of  the  equity 
of  redemption  to  pay  the  amount  of  the  debt  and  redeem  the 
estate,  if  he  so  chooses  ;  and  the  mortgagee  cannot  object  if  he 
accepts  the  invitation.^ 

The  acknowledgment  may  also  be  found  in  an  answer  to  a  suit 
in  equity.'^ 

1171.  A  verbal  acknowledgment  of  the  mortgage  as  a  subsist- 
ing security  is  sufficient  to  prevent  the  possession  from  operating 
as  a  bar  if  the  evidence  be  clear    and    unequivocal.^     Lord  Al- 

may  have  the  benefit,  I  do  not  know  ;  but  ^  Jackson  v.  De  Lancey,  II  Johns.  (N. 

the  statute   requires   that   the  admission  Y.)  365 ;  aff'd  13  lb.  537 ;  Cutts  y.  York 

should  be  made  to  the  mortgagor  himself,  Manuf.  Co.  18  Me.  140. 

and  by  that  I  am  bound."  «  Calkins  v.  Isbell,  20  N.  Y.  147;  aff'g 

1  Hansard  v.  Hardy,  18  Ves.  455.  3  Barb.  305  ;  Jackson  v.  Slater,  5  Wend. 

2  Ord  V.   Smith,  Sel.  Cas.  in   Ch.  9 ;  2  (N.  Y.)  295. 

Eq.  Ca.  Ab.  6U0.  '^  Goode  v.  Job,  1  Ell.  &  Ell.  6. 

8  Lucas  V.  Dennison,  13  Sim.  584.  ^  Reeks  v.  Postlethwaite,  Coop.  Eq.  160 ; 

*  Robinson   v.   Fife,  3    Ohio    St.  551;  Lake  v.  Thomas,  3    Ves.  17;   Barron   v. 

Calkins  v.  Calkins,  3   Barb.  (N.  Y.)  305.  Martin,  19   Ves.  327;  Perry  v.  Marston, 

In  this  case  the  mortgagee  had  been  in  2  Bro.  Ch.  397,  per  Lord  Thurlow;  Marks 

possession  almost  twenty  years  prior  to  v.  Pell,  1  Johns.  (N.  Y.)   Ch.  594.     Such 

the  proceeding  to  foreclose.  acknowledgments,  says  Chancellor  Kent, 

194 


WHAT  PREVENTS  THE  RUNNING  OF  THE  STATUTE.   [§  1171. 

vanley,  commenting  upon  the  admissibility  of  such  evidence,  said  : 
"  I  cannot  help  thinking  that  it  would  have  been  a  very  wise  rule 
if  no  parol  evidence  had  been  admitted  upon  these  subjects."  ^ 
Mr.  Justice  Story,  quoting  this  opinion  with  approval,  says : 
"  Such  admissions  and  acknowledgments  are  certainly  open  to  the 
strong  objection,  that  they  are  easily  fabricated,  and  difficult,  if 
not  impossible,  to  be  disproved  in  many  cases,  and  that  they  have 
a  direct  tendency  to  shake  the  security  of  all  titles  under  mort- 
gages, even  after  a  very  long,  exclusive  possession  by  the  mort- 
gagee ;  nay,  even  after  the  possession  of  a  half  century."  2 

The  objections  to  such  evidence,  however,  are  so  great  that  the 
modern  statutes  of  limitation  in  England  provide  not  only  that  an 
acknowledgment,  to  be  effectual  as  a  recognition  of  the  mort- 
gage, must  be  in  writing,  signed  by  the  mortgagee  or  the  person 
claiming  through  him  ;  bat  also  that  it  must  be  made  to  the 
mortgagor,  or  some  person  claiming  his  estate,  or  to  his  agent.^ 
If  the  writing  complies  with  these  conditions  no  particular  form  is 
required  under  this  statute.  The  amount  due  need  not  be  stated.'* 
An  acknowledgment  by  one  of  several  mortgagees  is  binding  only 
upon  himself  and  those  claiming  under  him,  and  enables  the  mort- 
gagor to  redeem  only  his  estate  or  interest  in  the  property.^  This 
provision  applies  only  to  mortgagees  holding  interests  in  sever- 
alty, and  not  as  joint-tenants.  An  acknowledgment  by  one  joint 
mortgagee  who  is  a  trustee  is  entirely  inoperative ;  all  must  join 
in  it  to  take  the  case  out  of  the  statute.^ 

"  are  generally  a  dangerous  species  of  evi-  gagor  or  some  person  claiming  his  estate, 

dence."     See,  also,  Morgan  v.  Morgan,  10  or  to  the  agent  of  such  mortgagor  or  per- 

Ga.  297,  304.  son,  in  writing,  signed  by  the  mortgagee 

1  Whiting  V.  White,  2  Cox,  290,  300;  or  the  person  claiming  through  him." 
Cooper  Eq.  1.  i  Stansfield  v.  Hobson,  16  Beav.  236; 

2  In  Dexter  v.  Arnold,  3  Sum.  152, 160.  3  De  G.,  Mac.  &  G.  620 ;  Trulockw.  Robey, 
"I  have  not  in  my  researches,"  says  Judge  12  Sim.  402  ;  2  Ph.  396  ;  Lord  St.  John 
Story,  "found  any  other  cases  upon  the  v.  Bougliton,  9  Sim.  219. 

point.      And,   what   is   very   remarkable,  ^  See  Statute  quoted  §  1146. 

there   is   no   instance   of   a  decree   being         «  Richardson  v.  Younge,  L.  R.  10  E(i. 

made  upon  such  parol  evidence  in  favor  27.5 ;  6  Ch.  App.  478.     The  views  of  the 

of  tlie  party  seeking  to  redeem.     In  the  question  presented  in  this  case,  in  argu- 

presentciise  I  am  spared  the  necessity  of  meut  upon  appeal,  were  :  1.  Tliat  the  ac- 

deciding  the  general  principle."  knowledgment  of  one  trustee  bound  both. 

8  Under  Statute  3  &  4  Wm.  4,  c.  27,  2.  That  it  bound  a  half  interest,  and  ena- 

§  28,  "  an  acknowledgment  of  the  title  of  bled  the  mortgagor  to  redeem  half  of  the 

the  mortgagor,  or  of  his  right  of  redemp-  estate  upon  paying  half  tlie  debt.   3.  That 

tion,  sliall  have  been  given   to  the  mort-  it  bound   neither.     "  It  appears  to  me,'' 

195 


§§  1172,  1173.]       WHEN   THE   RIGHT   TO   REDEEM   IS   BARRED. 

1172.  The  filing  of  a  bill  to  redeem  stops  the  running  of  the 
statute.  A  mere  demand  by  tlie  mortgagor  or  the  owner  of  the 
equity  of  redemption  to  be  allowed  to  redeem  does  not  prevent 
the  running  of  the  statute,^  unless  accompanied  by  a  tender  of  the 
amount  due  upon  the  mortgage,  as  provided  by  statute  in  some 
states,  and  followed  by  a  suit  within  a  year  or  other  specified 
time.  The  commencement  of  a  suit  to  redeem  is  sufficient  to 
save  the  right  against  the  statute  although  the  bill  be  filed  merely, 
without  any  service  of  it,  before  the  expiration  of  the  twenty 
years'  possession.  The  filing  of  the  bill  is  the  commencement  of 
the  suit.^  But  the  plaintiff  may,  by  unwarranted  delay  in  the 
prosecution  of  the  suit,  lose  all  benefit  of  it.^ 

1173.  The  statute  of  limitations  must  be  pleaded  in  order  to 
secure  the  protection  of  it.*  It  may  be  pleaded  by  answer  as  a 
defence,^  or  in  case  it  appears  on  the  face  of  the  plaintiff's  bill 
that  the  mortgagee  has  been  in  possession  for  twenty  years,  with- 
out acknowledgment  of  the  mortgage  title,  by  demurrer.^  But 
such  possession  must  appear  by  dates  positively  stated,  and  not  to 
be  made  out  by  inference,  or  argument,'^  or  presumption.^ 

said  Lord  Justice  James,  in  giving  judg-  ^  Hodle  v.  Healey,  1  Ves.  &  B.  536. 

ment,  "  to  be  the  best  construction  of  this  ^  Van    Vronker    v.   Eastman,  7    Met. 

involved  and  difficult  section,  to  hold  that  (Mass.)  157. 

the  provisions  as  to  acknowledgment  by  ^  Forster  v.  Thompson,  4  Dru.  &  War. 

some  of  several  trustees  apply  only  where  303 ;  Boyd  v.  Higginson,  3  lb.  123  ;    Cop- 

they  have  separate  interests,  either  in  the  pin  v.  Gray,  1  Y.  &C.  C.  C.  205. 

money  or  the  land.     I  do  not  think  Mr.  *  Fordham  v.  Wallis,  10  Hare,  231  ;  17 

Wilson  had  any  separate  interest  either  in  Jur.  228. 

the  money  or  the  land.     He  was  simply  ^  Batchelor  v.  Middleton,  6  Hare,  75 

joint-tenant  witli  his  co-trnstee  of  the  land,  Adams  v.  Barry,  2    Coll.  285;   Aggas  v 

and  jointly  entitled  with  him  to  the  mort-  Pickerell,  3  Atk.  225. 

gage   money.     Had    the   mortgagees   not  ^  Foster    v.   Hodgson,    19     Ves.    180 

been  trustees,  the  case  would  have  stood  Hoare  v.  Peck,  6  Sim.  51  ;  Baker  v.  Wet 

very  differently,  for  they  must,  almost  of  ton,  14  Sim.  420;   Jenner  r.  Tracy,  3  P 

necessity,  have  been  entitled  to  some  dis-  Wms.  287,  n. 

tinct  interests  in   the   mortgage   money  ;  ^  Edsell  v.  Buchanan,  2  Ves.  Jun.  82 ; 

and   if  they  had   been  partners,  difficult  4  Bro.  C.  C.  254. 

questions  might  have  arisen;  but  in  the  »  Baker  ?;.  Wetton,  14  Sim.  426;  Green 

pt'esent  case,  which  is  simply  that  of  trus-  v.  Nicholls,  4  L.  J.  Cli.  118. 

tees,  I  agree  with  the  conclusion  of  the 

Vice-Chancellor." 

196 


CHAPTER  XXV. 

WHEN  THE  HIGHT  TO  ENFORCE  A  MORTGAGE  ACCRUES,  1174-1191. 

1174.  In  general  the  right  of  action  accrues  upon  the  non- 
payment of  the  principal  or  interest  at  the  time  fixed  for  pay- 
ment,^  If  it  be  shown  by  agreement  of  the  parties  at  the  time 
of  the  execution  of  a  bond  payable  on  demand,  that  it  was  not  to 
be  paid  till  a  future  specified  time,  the  statute  of  limitations  will 
be  considered  as  beginning  to  run  only  from  the  time  agreed  upon 
for  payment.2  If  no  time  of  payment  is  fixed,  the  debt  is  payable 
on  demand,  and  the  right  to  enforce  it  accrues  immediately.  And 
so  if  by  the  express  terms  of  the  mortgage  the  debt  is  payable  on 
demand,  the  mortgagee  may  foreclose  by  suit  at  any  time  without 
a  previous  demand  other  than  the  commencement  of  the  suit.^ 

A  mortgage  cannot  be  foreclosed  before  it  is  due  or  there  is  a 
breach  of  some  condition,  although  in  a  suit  to  foreclose  a  sub- 
sequent mortgage  on  the  same  property  the  holder  of  the  prior 
mortgage  not  yet  due  is  made  a  party  defendant,  and  he  files  a 
cross-bill  asking  the  foreclosure  of  his  mortgage.  The  subsequent 
mortgage  must  be  foreclosed  by  a  sale,  subject  to  the  lien  of  the 
prior  mortgage.  The  whole  estate  cannot  be  sold  for  the  pay- 
ment of  both  mortgages.* 

1175.  The  right  to  foreclose  may  be  made  to  depend  upon 
events  other  than  the  lapse  of  'time  which  generally  deter- 
mines the  right ;  or  the  nature  of  the  security  may  be  such  that 
an  event  not  contemplated,  or  provided  for  by  the  parties,  may 
give  this  right ;  as  where  the  mortgage  secui-ed  the  fulfilment  of 
an  executory  agreement  which  was  to  run  for  three  years,  and 
the  insolvency  of  the  mortgagor  within  that  time  put  it  out  of 
his  power  to  fulfil  the  agreement ;   and  therefore  this  worked  a 

1  Gladwyn  v.  Hitchman,  2  Vem.  134.  *  Trayser  v.  Trustees   of  Indiana  As- 

2  Hale  V.  Pack,  10  W.  Va.  145.  bury  University,  39  Ind.  556. 
8  Gillett  V.  Balcom,  6  Barb.  (N.  Y.)  370. 

197 


§  1176.]       WHKN   RIGHT   TO   ENFORCE   MORTGAGE   ACCRUES. 

breach  of  it  and  gave  the  mortgagee  the  right  to  foreclose  imme- 
diately.^ 

Where  a  mortgage  was  given  to  secure  certain  promissory  notes, 
conditioned,  "  that  if  any  of  the  notes  prove  to  be  insolvent  or 
worthless,  the  mortgage  is  to  be  good  and  valid,  otherwise  to  be 
null  and  void,"  it  was  held  that  to  constitute  a  breach  some  of 
the  notes  must  prove  worthless,  or  the  makers  insolvent.  Non- 
payment alone  did  not  constitute  a  breach.^ 

It  is  very  generally  provided  by  the  terms  of  the  mortgage  that 
the  mortgagee  shall  have  the  right  to  sell  on  the  failure  of  the 
owner  to  pay  the  taxes  assessed  on  the  premises,  and  in  such  case 
a  default  in  this  particular  gives  the  right  to  sell  as  effectually  as 
when  the  default  consists  in  the  non-payment  of  the  principal 
sum  secured.^  And  so  a  condition  in  a  mortgage,  that  in  case  the 
taxes  upon  the  premises  shall  remain  unpaid  after  a  certain  date 
in  any  year  the  whole  debt  shall  become  due,  is  equally  binding 
and  operative  as  a  like  condition  in  respect  to  the  non-payment  of 
any  instalment  of  the  principal  or  interest,  and  the  court  has  no 
power  to  relieve  the  person  in  default  from  the  consequences  of 
it.*  But  where  the  mortgage  merely  provides  that  the  mortgagor 
shall  pay  the  taxes  upon  the  premises,  and  in  default  of  so  doing 
that  the  mortgagee  may  discharge  the  same  and  collect  them  as 
a  part  of  the  mortgage  debt,  then  the  failure  of  the  mortgagor  to 
pay  them  is  not  such  a  default  as  will  give  the  right  to  foreclose. 
And  even  if  it  be  further  provided  that  on  default  in  the  pay- 
ment of  the  principal  sum  or  interest,  or  of  the  taxes  as  provided, 
the  mortgagee  may  sell,  and  out  of  the  moneys  arising  from  such 
sale  retain  the  whole  debt  and  interest,  together  with  "  such 
taxes  and  charges  as  shall  have  been  paid  by  him,"  the  right  to 
sell  on  account  of  the  taxes  alone  does  not  arise  until  the  mort- 
gagee has  himself  paid  the  taxes,  because  until  then  no  money 
has  become  due  which  he  is  entitled  to  retain  on  a  sale.^ 

1176.  A  failure  to  pay  interest  when  due  is  a  default  within 
the  meaning  of  a  mortgage  or  trust  deed  which  authorizes  a  sale 
to  be  made  upon  the  happening  of  any  default,^  although  the  deed 

1  Harding  v.  Mill  River  Co.  34  Conn.  *  O'Connor  v.  Shipman,  48  How.  (N. 
458.  Y.)  Pr.  126. 

2  Fetrow  v.  Merriwether,  5.3  111.  275.  ^  Williams  v.  Townsend,  31  N.  Y.  411. 
'  Pope  V.  Durant,  26  Iowa,  233 ;    Har-         "  Stanhope  v.  Manners,  2  Eden,    197  ; 

rington  v.  Christie,  47  Iowa,  319.  Goodman  v.  Cin.  &  Chicago  R.  R.  Co.  2 

Disney  (Ohio),  176;    West  Branch  Bk.  v. 

198 


WHEN   RIGHT   TO   ENFORCE   MORTGAGE   ACCRUES.       [§  1177. 

does  not  show  when  the  interest  is  payable  or  what  the  rate  of  it 
is,  except  by  reference  to  the  note  secured.^  In  such  case  a  sub- 
sequent purchaser  of  the  mortgaged  premises  cannot  insist  that 
there  was  no  power  to  sell  for  non-payment  of  such  interest,  be- 
cause the  mention  of  interest  in  the  deed  as  reserved  by  the  note 
is  sufficient  to  put  him  upon  inquiry  as  to  the  rate  and  time  of 
payment  of  the  interest. 

1177.  Default  in  the  payment  of  the  yearly  or  half-yearly 
interest  at  the  times  stipulated  in  the  mortgage  is  held  by  high 
authority  to  give  the  right  to  foreclose  immediately,  although  the 
period  for  payment  of  the  principal  sum  has  not  arrived,  and  there 
is  no  provision  specifically  making  a  forfeiture  of  the  principal 
upon  a  default  in  the  payment  of  the  interest.^  A  dictum  of 
Lord  Chancellor  Sugden  is  much  relied  upon  as  establishing  this 
doctrine  :  that,  "  default  having  been  made  in  the  payment  of 
the  interest  thereon,  the  mortgagee  would  at  any  time  after  that 
event  have  had  a  right  to  file  his  bill  for  a  foreclosure  ;  because 
his  right  became  absolute  at  law, by  the  non-payment  of  the  in- 
terest, the  estate  having  been  conveyed  subject  to  a  condition 
which  had  not  been  fulfilled."  ^  This  was  followed  in  the  case 
of  Edivards  v.  Martin,^  notwithstanding  that  the  mortgagee  had 
taken  possession  of  the  property,  consisting  of  certain  leasehold 
estates,  and  had  realized  by  a  sale  of  a  portion  more  than  enough 
to  cover  the  interest  due.  Kindersley,  Vice-Chancellor,  said:  "It 
is  certainly  singular  that  this  question  has  never  before  been  de- 
cided ;  but,  in  the  absence  of  any  direct  authority,  the  dictum  of 
Lord  St.  Leonards  is  sufficient  for  me  to  act  upon  when  I  consider 
that,  upon  the  whole,  that  dictum  is  in  accordance  with  the  justice 
of  the  case." 

Under  an  agreement  for  a  mortgage,  the  court,  in  settling  the 
terms  of  the  mortgage  to  be  given  in  pursuance  of  it,  will  ordi- 
narily insert  a  proviso  that  the  postponement  shall  be  conditional 
on  punctual  payment  of  interest,  although  the  agreement  be  silent 
upon  the  subject  ;  so  that  if  the  mortgagor  should  make  default 

Chester,    11   Pa.    St.   282.      See  Burt  v.  interest  at  the  rate  of  £5  per  cent,  in  the 

Saxton,  1  Hun  (N.  Y.),  551.  mean  time.      The  interest  not  being  paid 

1  Richards  v.  Holmes,  18  How.  (U.  S.)  as  stipulated,  the  mortgage  was  treated  as 
143.  forfeited. 

2  Gladwyn  v.  Hitchman,  2  Vern.  135.  '  Burrowes  v.  MoUoy,  2  Jones  &  Lat. 
In  this  case  a  mortgage  was  made  for     521. 

£450,  payable  at  the  end  of  five  years,  with         *  25  Law  J.  N.  S.  Ch.  284. 

199 


§  1178.]      WHEN  RIGHT   TO  ENFORCE   MORTGAGE   ACCRUES. 


in  the  ]iaymont  of  interest,  the  mortgagee's  remedy  by  sale  or 
foreolosiuo  will  innnediately  arise. ^ 

1178.  But  the  agreement  in  respect  to  the  payment  of  the 
principal  may  be  such  that  a  default  in  the  payment  of  the  in- 
terest will  give  no  right  to  institute  proceedings  for  foreclosure; 
as,  for  instance,  where  it  is  provided  that  the  principal  shall  not 
be  called  induring  the  lifetime  of  the  mortgagor  ;  though  a  yearly 
interest  is  reserved,  a  default  in  the  payment  of  the  interest  dur- 
ing the  lifetime  of  the  mortgagor  gives  no  right  of  action.^ 

If  the  mortgage  contain  an  absolute  covenant  that  the  principal 
shall  not  be  called  in  during  a  specified  period,  or  until  the  hap- 
pening of  a  certain  event,  then  no  default  in  the  payment  of  the 
interest  in  the  mean  time  will  enable  the  mortgagee  to  sue.^  Such 
a  covenant  may  prevent  a  mortgagee's  suing  upon  a  salvage  claim, 
as,  for  instance,  upon  a  prior  mortgage  which  he  has  been  obliged 
to  take  up  for  his  own  protection  ;  although  that  has  matured,  the 


1  Seaton  v.  Tvvyford,  L.  R.  11  Eq.  591. 

2  Burrowes  v.  Molloy,  2  Jones  &  Lat. 
521.  Lord  Chancellor  Sugden  said : 
"  Supposing  that  the  principal  sum  had 
been  made  payable  on  a  given  day,  no 
matter  whether  it  was  one  year  or  twenty 
years  after  the  date  of  the  mortgage,  with 
interest  thereon  half-yearly  in  the  mean 
time,  and  that.'before  the  day  of  payment 
of  the  principal  money,  default  had  been 
made  in  the  payment  of  the  interest  there- 
on, the  mortgagee  would,  at  any  time  after 
that  event,  have  had  a  right  to  file  his  bill 
for  a  foreclosure ;  because  his  right  became 
absolute  at  law  by  the  non-payment  of  the 
interest,  the  estate  having  been  conveyed 
subject  to  a  condition  which  had  not  been 

fulfilled This  transaction  assumed 

a  different  shape  with  respect  to  the  pay- 
ment of  the  principal  and  the  payment  of 
the  interest ;  it  was  only  upon  the  non- 
payment of  the  principal  sum,  after  the 
decease  of  the  mortgagor,  that  the  mort- 
gagee was  to  have  a  right  to  foreclose. 
Interest  was  to  be  paid  half-yearly  upon 
the  principal  sum  ;  and  after  the  decease 
of  the  mortgagor  any  default  in  the  pay- 
ment of  the  interest  would  enable  the 
mortgagee  to  file  his  bill  of  foreclosure, 

200 


because  the  condition  would  then  have 
been  broken;  but  the  covenant  is  inde- 
pendent of  everything  contained  in  the 
deed  of  mortgage,  and  is  in  point  of  fact 
an  absolute  covenant,  that,  notwithstand- 
ing anything  contained  in  the  mortgage 
deed,  the  mortgagee  will  not  call  in  the 
principal  money  during  the  lifetime  of  the 
mortgagor.  I  do  not  see  how  any  default 
in  the  payment  of  the  interest,  during  the, 
lifetime  of  the  mortgagor,  can  enable  the 
mortgagee  to  commit  a  breach  of  his  cov- 
enant. It  was  said  that  this  was  like  a 
case  where,  although  the  money  was  by 
the  proviso  for  redemption  to  be  paid  at 
a  fixed  period,  yet  the  mortgagee  cove- 
nants that  ho  will  not  call  in  the  principal 
for  a  longer  period,  unless  default  should 
be  made  in  the  payment  of  the  interest  in 
the  mean  time ;  but  the  parties  here  have 
not  entered  into  such  an  arrangement.  I 
think,  therefore,  that  under  these  instru- 
ments the  plaintiff"  was  not  at  liberty  to 
file  his  bill  for  a  foreclosure,  as  far  as  re- 
lates to  the  principal  money ;  and  there- 
fore cannot  do  so  in  respect  of  the  inter- 
est which  accrued  before  the  principal  sum 
became  payable." 

8  Fisher  on  Mortg.  3d  ed.  347. 


WHEN   RIGHT    TO   ENFORCE   MORTGAGE   ACCRUES.       [§  1179. 

covenant  in  his  own  mortgage  will  prevent  his  enforcing  it  during 
the  time  included  in  his  covenant.^ 

When  it  appears  upon  the  whole  mortgage  deed  that  although 
the  principal  and  interest  are  expressed  to  be  payable  at  the  end 
of  several  years,  yet  it  was  the  intention  and  agreement  of  the 
parties  that  the  interest  should  be  paid  half-j^earl}'^,  the  mortgagee 
may  foreclose  upon  a  default  in  the  payment  of  the  interest  in  the 
mean  time.^ 

1179.  It  is  competent  for  the  parties  to  so  provide  that 
the  continuance  of  the  loan  shall  depend  upon  the  prompt- 
ness of  the  borrower's  paying  the  interest,  or  the  instalments  of 
principal.^  It  is  competent,  also,  for  the  parties  to  provide  that 
upon  a  default  of  the  mortgagor  in  the  payment  of  the  taxes  as- 
sessed upon  the  premises  the  whole  mortgage  debt  shall  become 
due.*  When  the  mortgage  provides  that  upon  any  default  in  the 
payment  of  interest  the  principal  sum  shall  immediately,  or  after 
the  continuance  of  the  default  for  a  specified  time,  become  due, 
time  is  made  the  essence  of  the  contract,  and  a  court  of  equity 
will  not  relieve  the  mortgagor  from  a  default,  unless  he  can  show 
some  good  excuse  for  it,  such  as  mistake  or  accident  or  fraud. ^ 
The  time  of  payment  may  be  extended  by  a  parol  agreement  so 
that  there  will  be  no  default  within  the  meaning  of  the  deed,  be- 
cause this  is  made  with  the  concurrence  of  the  creditor.  Although 
such  an  agreement  be  not  binding  for  want  of  consideration,  and 
therefore  is  subject  to  revocation  at  any  moment,  it  is  a  sufficient 
excuse  for  the  default.  The  creditor  cannot  treat  it  as  a  default 
working  forfeiture,  without  first  demanding  payment  of  the  in- 
stalment. 

Where  it  was  provided  that  in  case  the  interest  should  remain 
due   and  unpaid  for  ten  days,  the  principal  sliould  become  due, 

1  Burrows   v.  Malloy,  2  Jones  &  Lat.  Groot  v.  McCottcr,  19  N.  J.  Eq.  531 ;   Al- 

521.     See  Dugilale  v.  Robcrtsou,  3  Jur.  bert  v.  Grosvenor  Investment  Co.  8  Best 

N.  S.  087,  as  to  auit   for  injuries   to  the  &  S.  664;  L.  R.  3  Q.  B.  123.      Per  Lush, 

security  in  such  case.  J.:  "The  word  'default'   imports  some- 

'■^  Roddy  u.  Williams,  3  Jones  &  Lat.  1.  thing     wrongful,  —  the    omission     to    do 

8  Cassidy  v.  Caton,  47  Iowa,  22  ;    7  Re-  something  which,  as  between  the  parties, 

porter,  335  ;  Stanclift  v.  Norton,  11  Kans.  ought  to  have  been  done  by  one  of  iliom. 

218;  Whitcher  v.  Webb,  44  Cal.  127.  Therefore  the  omission  of  the  plaintiff  to 

*  Stanclift  v.  Norton,  supra.  pay  on  the  day  specified,  being  with  the 

5  Terry  v.  Eureka  College,  70  111.  236 ;  concurrence  of  the  defendants,  was  not  a 

Heath  v.  Hall,  60  111.    344;   Baldwin  v.  default." 

Van  Vorst,   2  Stock.    (N.   J.)    577  ;    De 

201 


§  1179.]      WHEN    RIGHT    TO   ENFORCE   MORTGAGE   ACCRUES. 

and  the  owner  of  the  equity  paid  the  interest  after  that  time  and 
took  a  receipt  as  of  the  day  wlien  it  fell  due,  it  was  held  to  be  a 
waiver  of  the  forfeiture,  so  that  the  mortgagee  could  not  proceed 
to  foreclose.!  Neither  will  the  court  enforce  a  forfeiture  of  the 
time  of  credit  if  the  failure  to  pay  the  interest  within  the  time 
specified  was  occasioned  by  the  acts  or  declarations  of  the  holder 
of  the  mortgage  ;  ^  as  where  by  agreement  of  the  parties  the  pay- 
ments of  interest  had  been  regularly  made  at  the  place  of  busi- 
ness of  the  mortgagor,  and  the  payment  on  which  the  forfeiture 
of  credit  was  claimed  occurred  because  the  mortgagee  had  not 
called  for  the  interest,  and  the  mortgagor  did  not  know  where  to 
find  him  ;  ^  or  where  the  owner  of  the  equity  tendered  the  amount 
due  which  the  moi'tgagee  refused  to  receive.* 

It  is  not  essential  that  this  provision  shall  be  contained  in  both 
the  mortgage  and  note.  When  these  instruments  are  executed  at 
the  same  time  with  regard  to  the  same  transaction,  and  make  ref- 
erence to  each  other,  they  are  but  one  in  the  eye  of  the  law,  and 
the  terms  of  either  are  qualified  by  any  provisions  of  the  other 
applicable  thereto.  If  the  note  states  that  it  is  secured  by  mort- 
gage, a  provision  of  the  latter  that  upon  default  in  the  payment 
of  interest  the  whole  debt  secured  shall  become  due  and  payable 
becomes  in  law  a  part  of  the  former.^ 

So  completely  is  the  time  of  payment  changed  by  a  provision 
for  the  forfeiture  of  credit  upon  the  breach  of,  a  condition  of  the 
mortgage,  that,  in  order  to  charge  an  indorser  of  the  mortgage 
note,  demand  upon  the  maker  and  notice  to  the  indorser  should 
be  given  at  the  time  the  mortgagee  elects  to  take  advantage  of 
the  default  and  declares  the  debt  to  be  due.  A  protest  afterwards 
upon  the  maturity  of  the  note  according  to  its  terms,  without  ref- 
erence to  the  forfeiture,  is  of  no  effect.^ 

The  general  rule,  however,  is,  that  in  the  absence  of  any  agree- 
ment that  the  whole  debt  shall  become  due  upon  a  failure  to  pay 

1  Sire  V.  Wightman,  25  N.  J.  Eq.  102.  erence  to  default  in  the  payment  of  inter. 

2  Wilson  V.  Bird,  28  N.  J.  Eq.  352.  est  moneys  previously  due. 

3  De  Groot  v.  McCotter,  19  N.  J.  Eq.  *  Ewart  v.  Irwan,  1  Phila.  78  (7  Leg. 
531.  The  order  in  this  case  was  that  upon  Int.  134).  Although  this  was  a  writ  of 
payment  to  the  complainant,  within  ten  scire  facias  the  court  applied  equitable 
days,  of  the  amount  then  due,  all  pro-  principles  of  construction. 

ceedings  upon  the  mortgage  be  stayed,  ^  Noell  v.  Graves  (Mo.),  8  Cent.  L.  J. 
until  default  be  made  according  to  the  353  ;  Waplesi;.  Jones,  62  Mo.  440;  Schoon- 
condition  of  the  mortgage,   without  ref-     maker  v.  Taylor,  14  Wis.  313. 

^  Noell  V.  Graves,  supra. 

202 


WHEN   RIGHT   TO   ENFORCE   MORTGAGE   ACCRUES.       [§§  1180,  1181. 

any  instalment  of  it,  the  mortgage  cannot  be  foreclosed  in  equity 
until  the  last  instalment  has  become  due.^ 

1180.  There  is  almost  always  sorae  provision  in  the  mort- 
gage under  which  the  right  to  foreclose  accrues  upon  a  breach 
of  any  of  the  stipulations  of  the  mortgagor  to  pay,  and  under 
which  also  the  mortgagee  may  receive  payment  of  the  whole  debt, 
and  not  merely  of  what  is  due  at  the  time  of  sale,  if  it  is  not  then 
all  due.2  This  agreement  need  not  be  formal,  but  may  be  gath- 
ered from  the  expressed  intention  of  the  whole  deed.  If  it  ap- 
pears from  the  whole  instrument  that  such  was  the  intention,  the 
sale  may  be  made  upon  any  default,  and  the  whole  debt  paid, 
though  not  all  due  ;  as  where  it  was  provided  that  on  default  it 
should  be  lawful  for  the  mortgagee  to  sell  and  execute  a  deed, 
"rendering  the  surplus,  if  any,"  to  the  mortgagor.^ 

But  a  provision  in  a  power  of  sale  mortgage  that,  in  case  of  a 
default  for  thirty  days  in  the  payment  of  any  instalments  of  in- 
terest or  of  the  principal,  the  mortgagee  may  advertise  and  sell, 
and  apply  the  proceeds  to  the  payment  of  the  whole  debt  and 
interest  due,  only  authorizes  this  application  in  case  of  sale  under 
the  power,  and  does  not  make  the  whole  debt  due  merely  by  neg- 
lect to  pay  within  the  time  prescribed.  It  does  not  change  the 
time  when  the  instalments  of  the  mortgage  become  payable,  so  as 
to  authorize  a  suit  in  equity  to  foreclose  the  mortgage  and  to 
apply  the  proceeds  of  sale  immediately  to  the  satisfaction  of  the 
mortgage.  If  the  mortgagee  chooses  to  proceed  in  equity,  and  the 
instalment  due  is  paid  before  sale,  he  can  only  aplply  to  the  court 
when  future  instalments  become  due  for  a  sale  under  the  decree  to 
satisfy  them.* 

1181.  Such  a  provision  in  the  mortgage  is  not  considered  a 
penalty,  but  an  agreement  as  to  the  time  when  the  debt  shall  be- 
come due.^     Unless  so  provided,  the  foreclosure  can   extend  no 

1  Harshaw  v.  McKesson,  66  N.  C.  26  ;  143  ;  Cecil  v.  Dynes,  2  Ind.  266  ;  Green- 
Hough  V.  Doyle,  8  Blackf.  (lud.)  300.  man  i\  Pattison,  8  Blackf.  465;  Hunt  v. 
This  was  by  statute.  Hardin^?,  11   Ind.  24.5;  Hough  v.  Doyle, 

2  Bushfield  v.  Meyer,  10  Ohio  St.  334  ;  8  Blackf.  300;  Smart  v.  McKay,  16  Ind. 
Hosie  V.  Gray,  71  Pa.  St.  198,  where  pro-  4b;  Taber  v.  Cincinnati,  &c.  R.  R.  Co.  15 
vision  was  made  for  issuing  scire  facias ;  Ind.  459  ;  Magruder  v.  Eggleston,  41  Miss. 
McLean  V.  Presley,  56  Ala.  211.  284;    Grattan   v.   Wiggins,   23    Cal.  16; 

«  Pope  V.  Durant,  26  Iowa,  233.  Jones  v.  Lawrence,  18  Ga.  277  ;  Andrews 

*  Holden   v.  Gilbert,  7   Paige  (N.  Y.),     v.  Jones,  3  Blackf.  440 ;  Schooley  v.  Ro- 

208.  ■  main,  31  Md.  574 ;  Mobray  v.  Leckie,  42 

5  Richards  y.  Holmes,  18  How.  (U.S.)     Md.   474;    Salmon   v.    Clagett,   3  Bland 

203 


§  1182.]      WHEN   RIGHT   TO   ENFORCE   MORTGAGE   ACCRUES. 

further  than  to  enfoi-ce  satisfaction  of  such  part  of  the  debt  as  is 
due  at  that  time,  and  for  that  purpose  to  sell  so  much  of  the 
mortgaged  property  as  may  be  necessary.  Courts  of  equity,  with- 
out the  aid  of  any  statutory  provision  to  that  effect,  may  gen- 
erally retain  jurisdiction  of  the  case  until  the  subsequent  instal- 
ments become  due,  and  then  decree  a  further  sale  ;  and  under  the 
general  doctrines  and  practice  of  equity  may  direct  a  sale  of  the 
whole  mortgaged  estate,  though  not  required  for  the  payment  of 
the  instalment  already  due,  in  case  the  property  is  indivisible  ;  ^ 
or  with  the  consent  of  the  mortgagor  ;  or  in  case  the  court  should 
be  satisfied  that  the  property  would  sell  for  a  better  price  if 
sold  together  in  one  lot  than  if  sold  in  parcels  at  different  times.^ 
But  if  the  whole  premises  are  sold  the  remedy  is  exhausted,  and 
there  can  be  no  second  sale  upon  the  maturing  of  the  principal 
debt.3 

If  other  instalments  become  due  after  the  suit  is  commenced, 
and  before  final  hearing,  these  may  be  included  in  the  decree  with- 
out filing  a  supplemental  bill  if  they  are  set  out  in  the  original 
bill,  and  are  included  in  the  prayer  for  decree.^ 

1182.  Default  at  election  of  mortgagee.  —  Where,  in  a  mort- 
gage by  a  railroad  company  to  trustees,  it  was  provided  that  if 
the  principal  or  interest  should  not  be  paid  at  the  times  stated 
the  principal  sum  secured  should  become  immediately  due  "  at  the 
election  of  the  trustees,"  the  whole  debt  was  not  due  until  the 
trustees  had  exercised  their  election  ;  and  a  sale  of  the  property 
free  from  the  mortgage  before  this  could  not  be  authorized  by  an 
act  of  the  legislature.^ 

An  assignee  of  part  of  the  notes  secured  by  a  mortgage  con- 
taining such  provision  cannot  alone  exercise  such  option.  It  is  an 
indivisible  condition,  to  enforce  which  all  parties  interested  in  the 
mortgage  security  must  unite.^ 

Where  the  mortgagee  has  the  option  to  consider  the  entire  debt 

(Md.),  125  ;  Adams  v.  Essex,  1  Bibb  (Ky.),  Peyton  v.  Ayres,  2  Md.  Ch.  64  ;  Wylie  v. 

149  ;  Baker  v.   Lehman,   Wright  (Ohio),  McMakin,  2  Md.  Ch.  413. 

522 ;   Morgenstern  v.  Klees,  30  111.  422  ;  ^  Toweshiek  Co.  v.  Dennison,  36  Iowa, 

Stillwell   V.  Adams,  29  Ark.  346  ;  Good-  244  ;  Buford  v.  Smith,  7  Mo.  489. 

man  v.   Cinn.  &  Chicago  K.  R.  Co.  2  Dis-  *  Magruder  v.  Eggleston,  41  Miss.  284. 

ney  (Ohio),  176.  &  Randolph  v.  Middlcton,  26  N.  J.  Eq. 

1  Bank    of    Ogdensburg    v.    Arnold,    b  543. 

Paige  (N.  Y.),  38.  *'  Marine  Bank  v.  International  Bank, 

2  Caufman  v.   Sayre,  2  B.  Mon.  (Ky.)     9  Wis.  57. 
202  ;  Adams  v.  Essex,  I  Bibb  (Ky.),  149  ; 

204 


WHEN   RIGHT    TO    ENFORCE   MORTGAGE   ACCRUES.      [§  1183. 

matured  on  any  default,  it  is  not  necessary  that  any  particular 
form  of  expression  should  be  used  for  the  purpose  of  declaring 
such  option.  A  recital  in  a  mortgagee's  deed  under  a  power  of 
sale  in  the  mortgage,  that  "  having  elected  to  declare  said  mort- 
gage due  and  payable,  as  by  said  mortgage  he  was  authorized  to 
do,  according  to  the  terms  and  conditions  thereof,  he  had  proceeded 
to  exercise  the  power,"  is  sufficient.^ 

Generally  no  notice  of  the  mortgagee's  election  to  consider  the 
whole  debt  due  is  necessary.  His  proceeding  to  enforce  the  mort- 
gage sufficiently  shows  his  election.  An  assignee  of  the  mortgagee 
may  also  exercise  this  option  in  the  same  way  as  the  mortgagee 
himself  may.^ 

In  Wisconsin,  however,  it  is  held  that  notice  of  the  mortgagee's 
election  to  consider  the  whole  sum  due  must  be  given  before  the 
bringing  of  a  suit  for  the  whole  sum.^  The  notice  given  by  an 
attorney  of  the  mortgagee  is  sufficient,  though  it  does  not  show 
the  authority  on  its  face.  If  the  mortgagor  at  the  time  of  receiving 
notice  refuse  to  pay  the  mortgage,  he  cannot  object  that  the  mort- 
gagee resides  out  of  the  state,  and  no  person  is  designated  to 
whom  payment  could  be  made.*  Such  a  provision  being  unusual, 
an  attorney  or  officer  of  a  corporation  having  general  authority  to 
execute  a  mortgage,  the  terms  and  conditions  of  which  are  not 
specified,  would  have  no  right  to  insert  it ;  but  a  mortgage  so 
made  would  not  thereby  be  void  except  as  to  such  provision.^ 

1183.  No  one  but  the  person  for  whose  benefit  a  provision 
for  forfeiture  of  credit  is  made  can  take  advantage  of  it.  Thus, 
a  covenant  in  the  mortgage  of  a  railroad  company  to  trustees  to 
secure  bondholders,  "that  the  principal  sum  secured  by  said  mort- 
gage shall  become  due,  in  case  the  interest  on  the  bonds  remains 
unpaid  for  four  months,"  but  not  inserted  in  the  bond,  can  only 
be  taken  advantage  of  by  the  trustees  for  the  foreclosure  of  the 
mortgage  according  to  the  terras  of  the  authority  conferred  upon 
them,  and  not  by  an  individual  bondholder  ;  although  upon  the 
bonds  there  was  a  certificate  signed  by  the  trustees,  that  such  a 
provision  was  contained  in  the  mortgage.     The  mortgage  could 

1  Harper  i;.  Ely,  56  III.  179.  rine  Bank  v.  International  Bank,  9   Wis. 

2  Harper  v.  Ely,  supra ;  Heath  v.  Hall,     57. 

60  111.  344  ;  Princeton  Loan  &  Trust  Co.  *  Rosseel  v.  Jarvis,  15  Wis.  571. 

V.  Munson,  60  111.  371  ;  and  see  English  ^  Jesup  v.  City  Bank  of  Racine,  14  Wis. 

V.  Carney,  25  Mich.  178.  331. 
8  Basse  v.  Galiegger,  7  Wis.  442  ;  Ma- 

205 


§§  1184,  1185.]      WHEN   RIGHT   TO   ENFORCE   MORTGAGE  ACCRUES. 

be  foreclosed  only  upon  the  written  request  of  the  holder  of  a 
majority  in  amount  of  the  bonds ;  and  it  was  construed  to  mean 
that  the  trustees  alone  could  enforce  it,  and  not  that  an  individual 
solely  or  jointly  with  others  should  have  any  right  to  do  so.^ 

This  clause  is  usually  inserted  for  the  benefit  of  the  mortgagee ; 
yet  it  has  been  held  that  it  may  be  taken  advantage  of  by  the 
mortgagor  as  well ;  as  in  a  case  where  after  a  failure  to  pay  a 
part  of  the  debt  when  due,  and  by  the  terms  of  the  mortgage 
the  whole  debt  thereupon  became  due,  a  person  purchasing  the 
notes  and  mortgage  subsequently  took  them  after  maturity,  and 
therefore  subject  to  the  equities  existing  between  the  original 
parties.^ 

1184.  Provisions  against  forfeiture.  —  Where  it  is  stipulated 
as  part  of  the  mortgage  contract,  that  "  the  loan  shall  not  be 
called  in  so  long  as  the  mortgagor  continues  to  punctually  pay  the 
interest  semi-annually,  and  the  value  of  the  estate  pledged  shall 
be  double  the  amount  of  the  debt,  until  the  expiration  of  two 
years  after  the  service  of  a  written  notice,  stating  the  time  when 
payment  will  be  required,"  no  foreclosure  can  be  had  until  this 
provision  is  complied  with,  and  the  notice  given.^  In  like  man- 
ner, if  the  mortgage  contains  the  usual  provision  that  the  sev- 
eral notes  secured  by  it,  though  maturing  at  different  dates,  shall 
not  become  due  and  the  mortgage  shall  not  be  foreclosed  till  the 
maturity  of  the  note  made  payable  latest,  no  judgment  can  be 
recovered  upon  any  of  the  notes  until  the  last  has  matured.  The 
notes  and  deed  are  to  be  read  together  as  one  instrument.* 

1185.  The  court  has  no  po"wer  to  relieve  a  mortgagor  from 
a  forfeiture  of  condition  that  the  whole  principal  shall  become 
due  at  the  election  of  the  mortgagee  upon  a  failure  to  pay  the  in- 
terest, or  to  order  a  stay  of  proceedings  until  a  further  default,^ 
unless  fraud  or  improper  conduct  on  the  plaintiff's  part  is  proved ; 
as  m  case  lie  has  prevented  the  mortgagor  from  ascertaining  the 
owner  of  the  mortgage,  and  making  payment  to  him  within  the 
time  fixed  by  the  condition.^  The  mortgagor  having  negligently 
permitted  the  time  to  pass,  and  the  whole  debt  thereby  to  become 

1  Mallory  v.  West  Shore  Hudson  Riv.  *  Brownlee  v.  Arnold,  60  Mo.  79 ;  and 
R.  R.  Co.  35  N.  Y.  Superior,  174.  see  Noell  v.  Graves,  8  Cent.  L.  J.  353. 

2  First  Nat.  Bank  of  Sturgis  v.  Teck,  8  ^  Bennett  v.  Stevenson,  53  N.  Y.  508. 
Kans.  660.  *>  Noyes  v.  Clark,  7  Paige  (N.  Y.),  179. 

3  See   §  1178.     Belmont    Co.    Branch 
Bk.  t'.  Price,  8  Ohio  St.  299. 

206 


WHEN   RIGHT   TO   ENFORCE   MORTGAGE   ACCRUES.       [§  1186. 

due,  cannot  relieve  the  forfeiture  by  paying  into  court  the  interest 
or  instalment  on  which  the  forfeiture  occurred.^  If  the  only  ques- 
tions be  whether  a  tender  had  been  properly  made  at  any  time, 
and  if  so,  whether  made  within  the  time  prescribed  by  the  con- 
dition, these  must  be  determined  upon  the  trial  of  the  foreclosure 
action.2  But  the  forfeiture  will  not  be  enforced  against  one  who 
in  good  faith  and  upon  reasonable  grounds  denies  his  Habihty  to 
pay  interest,  or  claims  that  he  has  paid  it,  even  if  it  turns  out,  upon 
trial  of  the  matter,  that  he  was  in  error  about  it.^ 

1186.  Waiver  of  default  of  credit.  —  When  a  mortgagee  has 
made  his  election  to  regard  the  principal  sum  due  under  a  stip- 
ulation that  he  shall  have  this  election  upon  the  non-payment  of 
interest  for  thirty  days  after  it  becomes  due,  he  cannot  be  com- 
pelled to  waive  this  provision  and  accept  the  interest.  Undoubt- 
edly an  unconditional  acceptance  of  the  interest  in  default  would 
be  a  waiver  of  the  default ;  *  but  the  acceptance  of  an  instalment 
of  the  principal  already  due  would  not  be  such  a  waiver  ;  nor 
would  the  commencement  of  a  foreclosure  suit  prior  to  the  ex- 
piration of  the  time  after  which  the  mortgagee  may  elect  that  the 
whole  amount  shall  become  due ;  he  may  after  that  time  file  an 
amended  and  supplemental  complaint,  and  proceed  for  the  collec- 
tion of  the  whole  amount.^  An  acceptance  of  an  instalment  by 
an  agent  of  the  mortgagee  without  his  authority  does  not  have  the 
effect  to  restore  the  contract.^    . 

A  payment  of  a  sum  of  money  by  the  mortgagor  for  an  ex- 
tension of  the  time  of  payment  for  a  term  of  years  does  not 
prevent  the  mortgagee  from  taking  advantage  of  a  subsequent 
forfeiture  within  that  term ;  although  such  payment  must  be 
credited  upon  the  mortgage  debt,  it  is  not  appropriated  to  the 
interest  so  as  to  prevent  a  forfeiture.^ 

A  provision  in  a  mortgage  by  a  railroad  company,  that  the  trus- 
tees shall  sell  the  mortgaged  property  upon  the  request  of  the 
holders  of  a  certain  amount  of  the  bonds  secured,  does  not  pre- 
vent a  suit  upon  a  bond  which  has  become  due  by  default  ac- 
cording to  the  terms  of  the  mortgage  and  bond.     The  enforce- 

1  Ferris  v.  Ferris,  28  Barb.  (N.  Y.)  29.  ^  Malcolm  i-.  Allen,  49  N.  Y.  448. 

2  Bennett  v.  Stevenson,  5.3  N.  Y.  508.  «  Sloat   v.   Bean,   47    Iowa,  60 ;  7  Re- 

3  Wilcox  V.  Allen,  36  Mich.  160.  porter,  2.37. 

4  Lanj,'rid<je  u.  Payne,  2  J.  &  H.  423;  ^  Church  v.  Maloy,  9  Hun  (N.  Y.), 
In  re  Taaffe,  14  Ir.  Ch.  R.  347.  148. 

207 


§  1187.]       WIIKN    RIGHT    TO    ENFORCK   MORTGAGE   ACCRUES. 

moiit  of  the  bond  ami  of  the  mortgage  may  depend  upon  different 
circumstances,^ 

It  is  no  excuse  for  the  non-payment  of  tlie  money  that  the 
mortgagee  died  eight  days  before  the  interest  became  due,  and 
the  debtor  urged  feelings  of  delicacy  about  intruding  with  affairs 
of  business  so  soon  afterwards,  it  appearing  that  he  made  no  at- 
tempt to  pay  the  money,  and  paid  no  attention  to  the  matter 
until  it  was  demanded  of  him  some  weeks  afterwards.  He  should 
have  made  inquiry  within  a  reasonable  time  whether  there  was 
any  one  authorized  to  receive  the  money .^ 

A  forfeiture  of  credit  is  waived  by  accepting  interest  after  the 
expiration  of  the  time  at  which  the  holder  of  the  mortgage,  by  its 
terms,  is  entitled  to  a  forfeiture  of  the  principal  sum.  His  receipt 
acknowledging  the  payment  of  interest  as  of  the  day  on  which  it 
fell  due  is  inconsistent  with  any  claim  of  forfeiture.^  But  under 
a  provision  in  a  mortgage  that  in  case  the  interest  be  duly  and 
punctually  paid  the  principal  may  remain  for  two  years,  or  any 
other  definite  period,  if  an  instalment  of  interest  becomes  due  and 
is  not  paid  upon  demand,  and  the  mortgagee  thereupon  demands 
payment  of  principal  and  interest,  the  mortgagee  does  not  by  a 
subsequent  acceptance  of  the  interest  waive  his  right  to  call  in  the 
principal.* 

1187.  When  a  guarantor,  or  surety,  or  indorser,  is  secured 
by  a  mortgage,  he  cannot  foreclose  until  he  has  paid,  the  obli- 
gation he  became  liable  upon  ;  ^  and  a  mortgage  given  to  indem- 
nify one  against  damages  occasioned  by  the  negligence  of  the 
mortgagor  or  other  person  cannot  be  foreclosed  until  judgment 
has  been  recovered  for  the  negligence,  because  it  is  not  certain 
before  this  that  the  mortgagee  has  been  damnified.*^  Where  a 
mortgage  was  given  to  secure  the  performance  of  a  contract  of 
the  mortgagor  to  consign  all  the  goods  he  should  manufacture  for 

1  Phila.  &Balt.  Cent.  11.  K.  Co.  v.  John-  Kramer  v.  Farmers'  &  Mechanics'  Bk.  of 
son,  54  Pa.  St.  127.  Steubenville,    15  Ohio,  253;    McConuell 

2  Mobray  v.  Leckie,  42  Md.  474.  v.  Scott,  lb.  401  ;  Ohio  Life  Ins.  &  Trust 

3  Sire  i;.  Wi{,'himan,  25  N.  J.  Eq.  102.        Co.    v.   Jleeder,    18   Ohio,   35;    Lewis  v. 
*  Kerne  v.  Biscoe,  L.  R.  8  Ch.  D.  201  ;     Kichey,  5  Ind.  152  ;  Francis  v.  Porter,  7 

Langridge  v.  Payne,  2  J.  &  H.  423,  dis-  Lid.  213. 

tinguished,  as  the  mortgagee's  notice  there  *<  Grant  v.  Ludlow,  8  Ohio  St.  1  ;  Til- 

mi"ht  be  regarded  as  conditional.    See  ob-  ford  v.  James,  7  B.  Mon.  (Ky.)  337  ;  Plant- 

servation  in  Taafe  in  re   14  Ir.  Ch.  347,  ers'  Bank  v.  Douglass,   2  Head  (Tenn.), 

that  the  latter  case  should  be  overruled.  699. 
5  Ketchum  y.  Jauncey,  23  Conn.   126; 

208 


WHEN   RIGHT   TO   ENFORCE   MORTGAGE   ACCRUES.       [§  1188. 

three  years  to  the  mortgagee,  who  accepted  drafts  for  the  mort- 
gagor's accommodation,  and  was  obliged  to  pay  them,  it  was  held 
that  upon  the  insolvency  of  the  mortgagor  that  the  mortgagee  was 
entitled  to  an  immediate  foreclosure,  because  the  agreement  con- 
templated a  continuous  performance  of  it,  and  the  assignee  could 
not  carry  on  the  business  as  stipulated.^ 

An  indorser  for  accommodation  who  is  secured  for  his  liability 
by  a  mortgage  need  not  wait  till  the  note  indorsed  by  him  is  pro- 
tested before  paying  it,  in  order  to  have  the  benefit  of  his  mort- 
gage security  ;  but  upon  being  informed  by  the  principal  debtor 
that  he  could  not  and  should  not  pay  the  note,  such  indorser  may 
pay  the  note  in  time  to  save  it  from  going  to  protest,  and  such 
payment  will  be  within  the  condition  of  the  mortgage.^ 

The  condition  of  a  mortgage  given  to  indemnify  a  surety  is 
not  broken  until  the  surety  has  been  obliged  to  pay  the  debt,  and 
therefore  his  right  to  foreclose  does  not  accrue  until  that  time.^ 
It  is  sufficient,  however,  if  he  has  paid  a  part  of  the  debt.* 
Neither  is  it  necessary  that  the  amount  of  the  damages  sustained 
by  the  mortgagee  should  be  determined  by  a  suit  at  law  before 
filing  a  bill  to  foreclose.^ 

1188.  When  the  condition  is  to  pay  or  to  save  harmless, 
the  mortgagee  may  foreclose  on  the  mortgagor's  failure  to  pay  ;  ^ 
although  when  the  condition  is  merely  to  save  harmless  he  cannot 
foreclose  until  he  has  suffered  loss.  If  the  condition  be  to  pay  and 
save  harmless,  it  is  broken  upon  failure  to  pay. 

A  condition  that  the  mortgagor  "  shall  promptly  pay  and  dis- 
charge all  notes  and  papers  of  his  upon  which  the  mortgagees 
shall  become  indorsers  or  acceptors,  together  with  all  the  interest, 
costs,  and  charges  thereon,  so  as  to  save  said  mortgagees  harmless 
by  reason  of  their  connection  with  such  paper,"  is  broken  at  once 

1  Harding  v.  Mill  River  Woollen  Mamif .  *  Beckwith  v.  Windsor  Manuf.  Co.  14 
Co.  34  Conn.  461.  Conn.  594. 

2  National  State  Bank  of  Newark  v.  ^  Rodgers  u.  Jones,  1  McCord  (S.  C), 
Davis,  24  Ohio  St.  190.  Ch.  221. 

^  Colvin   V.   Buckle,  8  M.  &  W.  680  ;  *^  Thurston   v.   Prentiss,   1   Mich.  193  ; 

Rodman   v.   Hcdden,    10  Wend.  (N.  Y.)  Dye  v.  Mann,  10  Mich.  291  ;   Butler  v. 

500  J  Piatt  V.   Smith,  14  Johns.  (N.  Y.)  Ladue,  12  Mich.  173;   Francis  v.  Porter, 

868  ;  Powell  v.  Smith,  8  lb.  249  ;  M'Lean  7  Ind.  213  ;  Ellis  v.   Martin,  7  Ind.  652  ; 

V.  Ragsdale,   31    Miss.    701  ;    Shepard  v.  Lewis  v.  Richey,  5  Ind.  152. 
Shepard,  6  Conn.  37 ;  Pond  v.  Clarke,  14 
Conn.  334. 

VOL.  II.                          14  .                            209 


§  1189.]      WHEN  RIGHT   TO   ENFORCE  MORTGAGE   ACCRUES. 

Oil  a  fiiilure  to  pay  at  maturity,  and  the  mortgagee  may  foreclose 
without  further  action.  Althougli  the  power  of  sale  in  this  mort- 
gage was  Hmited  to  the  case  of  the  mortgagee  being  damnified  by 
paying  the  debts  himself,  the  mortgage  was  foreclosed  in  equity. 
The  power  of  sale  need  not  be  coextensive  with  the  condition  of 
the  mortgage,  and  although  that  remedy  cannot  be  used  for  a 
breach  not  covered  by  the  power,  the  remedy  in  equity  is  open 
upon  every  breach  of  the  condition.^ 

When  a  mortgage  is  given  to  secure  the  payment  of  the  note  of 
a  third  person,  which  the  mortgagor  transfers  to  the  mortgagee 
at  the  time  of  executing  the  mortgage,  the  mortgagee  may  fore- 
close the  mortgage  upon  the  happening  of  a  breach,  without  first 
prosecuting  his  remedy  against  the  maker  of  the  note.^ 

1189.  A  mortgagee  may  be  estopped  from  foreclosing  his 
mortgage  by  an  agreement  with  the  mortgagor,  upon  which 
the  latter  has  acted,  that  the  mortgage  should  never  be  enforced 
against  him  ;  and  even  without  any  positive  agreement  if  the 
mortgagee,  by  giving  the  mortgagor  to  understand  that  he  should 
be  released  of  the  burden  of  the  mortgage,  intentionally  leads  the 
mortgagor  to  act  in  such  a  manner  that  he  will  be  seriously  prej- 
udiced by  the  mortgagee's  not  carrying  out  the  understanding.^ 

A  person  being  desirous  of  purchasing  land  upon  which  there 
was  a  mortgage,  but  being  unable  to  make  the  payments  at  the 
times  specified  in  the  mortgage,  called  upon  the  holder  of  it,  who 
agreed  verbally  that  if  the  proposed  purchaser  would  pay  two 
hundred  dollars  the  ensuing  spring,  and  interest  on  all  sums  re- 
maining unpaid  annually  thereafter,  and  would  make  certain  im- 
provements, he  would  extend  the  time  of  payment  of  the  mort- 
gage for  twenty  years.  The  purchase  was  accordingly  made  and 
all  the  requirements  complied  with,  except  that  the  purchaser 
failed  for  two  years  to  pay  the  interest.  It  was  decided  that  the 
time  of  payment  was  extended  by  the  verbal  contract,  and  that 
there  was  no  default  in  the  payment  of  the  principal,  although 

1  Butler  u.  Ladue,  12  Mich.  173.  ise  that  the  mortgage  should  not  be  en- 

2  Ballenger  v.  Oswalt,  26  Ind.  182;  forced  against  the  family,  was  not  allowed, 
O'Haver  v.  Shidler,  lb.  278.  after  the  son  had  cultivated  the  farm  and 

3  Faxton  v.  Faxton,  28  Mich.  159.  In  supported  the  family  for  several  years,  to 
this  case  the  mortgagee  having  persuaded  foreclose  the  mortgage.  See  Fausel  v. 
a  son  of  the  mortgagor,  after  the  death  of  Schabel,  22  N.  J.  Eq.  126,  for  circum- 
the  latter,  to  remain  upon  the  farm,  and  stances  and  agreement  not  amounting  to 
support  his  father's  family,  upon  a  prom-  an  agreement  to  extend. 

210 


WHEN   RIGHT   TO   ENFORCE   MORTGAGE   ACCRUES.       [§§  1190,  1191. 

there  might  have  been  a  foreclosure  for  the  interest  remaining 
unpaid. 1 

1190.  If  the  time  of  payment  of  a  mortgage  be  extended, 
the  right  to  foreclose  is  of  course  suspended  until  the  expiration 
of  the  extended  term.  A  verbal  agreement  to  extend  the  time  of 
payment  is  binding,  and  suspends  the  right  to  foreclose  if  founded 
on  a  good  consideration  and  otherwise  valid;  ^  but  if  made  with- 
out consideration  it  amounts  to  nothing,  and  the  mortgage  may 
be  foreclosed  at  any  time.^  The  payment  of  interest  in  advance 
is  a  sufl&cient  consideration  to  support  an  extension  of  a  mort- 
gage.* 

Where  the  mortgage  was  payable  in  six  months  after  date,  with 
interest  monthly  in  advance,  and  contained  also  a  stipulation  that 
in  case  the  interest  or  any  portion  of  it  should  become  due  and 
remain  unpaid  after  demand,  then  the  mortgage  should  be  fore- 
closed, the  prompt  payment  of  the  interest  was  held  not  to  pro- 
long the  time  of  payment  beyond  the  six  months,  and  a  cause  of 
action  upon  the  note  and  mortgage  then  accrued.^ 

An  agreement  to  extend  the  payment  of  a  debt  already  due  is 
not  to  be  implied  from  a  provision  in  a  mortgage  of  a  mining 
claim,  that  the  debt  is  to  be  paid  as  fast  as  it  can  be  made  out  of 
the  claim,  after  deducting  certain  expenses ;  nor  does  such  an 
agreement  imply  that  the  claim  is  to  be  paid  only  in  this  way.^ 

When  a  mortgagee  in  assigning  an  overdue  mortgage  guaran- 
tees its  payment  and  provides  for  its  extension  upon  condition 
of  the  prompt  payment  of  the  interest,  this  agreement  does  not 
enure  to  the  benefit  of  the  mortgagor  ;  but  the  mortgagee  may  at 
any  time  after  a  default  require  the  assignee  to  proceed  to  fore- 
close at  his  expense." 

1191.  If  the  time  of  payment  of  such  a  mortgage  be  ex- 
tended by  a  parol  agreement,  though  this  may  be  insufficient  to 
change  the  legal  effect  and  operation  of  the  writing  under  seal, 
it  will  be  a  sufficient  waiver  of  the  default  contemplated  in  the 
mortgage,  and  neither  a  court  of  equity  nor  a  court  of   law  will 

1  Burty.  Saxton,  1  Ilun  (N.  Y.),  551.  *  Maher  v.  Lanfrom,  86  111.  513;  In  re 

2  Tompkins  v.  Tompkins,  21  N.  J.  Eq.  Betts  (U.  S.  C.  C.  E.  D.  Mo.  1879),  7  Re- 
338;  Trayser  v.  Trustees  of  Indiana  Ajj-     porter,  225. 

bury  University,  39  Ind.  556  ;  Loomis  v.  ^  Pendleton  v.  Rowe,  34  Cal.  149. 

Donovan,  17  Ind.  198 ;  Redman  v.  Deputy,  ^  Sharpe  v.  Arnott,  51  Cal.  188. 

26  Ind.  338.  7  Lee  v.  West   Jersey   Land  &  Cran- 

8  Massaker  v.  Mackerley,  1  Stockt.  (N.  berry  Co.  29  N.  J.  Eq.  377. 

J.)  440.  211 


§  1H>1.]     ^YHl:N  right  to  knforck  mortgage  accrues. 


enforce  a  forfeiture  of  credit  which  has  occurred  under  such  agree- 
ment.' 


1  Albert  c.  Grosvenor  Investment  Com- 
pany, L.  R.  3  Q.  B.  127.  Mr.  Chief  Jus- 
tice Cockbiirn  said  :  "  This  is  the  case  of 
a  niortir-»f;<-'  wherchv  the  mortpapor  trans- 
fers tlic  iiroperty  in  certain  goods  to  the 
moriga;:ees,  but  subject  to  the  mortgagor's 
right  of  redemption;  and  there  arc  certain 
clauses  in  the  deed,  the  result  of  whieli  is, 
that  the  mortgagees  cannot  seize  and  sell 
the  goods  unless  the  mortgagor  makes 
default  in  jiaving  the  instalments  of  .£2, 
which  he  is  bound  to  do  on  each  succes- 
sive Monday  till  the  loan  is  repaid.  Now 
the  facts  are,  that  the  plaintiff's  wife  went 
to  Bayne  (who  must  be  taken  to  have  had 
full  authority  to  bind  the  defendants  by 
what  he  did,  for,  on  the  evidence,  I  see  not 
the  slightest  reason  to  believe  any  one  else 
ever  interfered  in  the  management  of  the 
business  of  the  company)  and  told  him 
that  her  husband  had  difficulty  in  meeting 
the  instalment  due  on  the  28th  of  August, 
and  Bayne  extended  the  time  for  the  pay- 
ment of  that  and  the  next  instalment  to 
the  1 1  th  of  September.  Now  the  bill  of  sale 
provides  that  if  the  mortgagor  shall  make 
'  default '  in  payment  of  the  sum  of  £62 
10,s.,  or  any  part  thereof,  the  whole  amount 
shall  be  then  immediately  due  and  paya- 
ble ;  and  it  shall  be  lawful  for  the  mort- 

212 


gagecs  to  take  possession  of  the  goods,  and 
to  sell  and  dispose  of  them.  Now  '  de- 
fault' must  be  taken  to  mean  a  non-pay- 
ment by  the  party  bound  to  pay,  without 
the  consent  of  the  parties  having  a  right 
to  waive  the  payment.  And  I  see  notliing 
which  goes  to  show  that  if,  by  the  consent 
of  the  ])erson  who  is  to  receive  payment, 
the  time  for  payment  is  extended,  the 
omission  to  pay  within  the  time  specified 
must  be  a  *  default '  within  the  meaning 
of  the  word  in  the  bill  of  .sale ;  and  it  would 
be  monstrous  to  hold  that  it  was  a  default, 
for  the  mortgagee  might  always  lead  the 
mortgagor  into  a  snare  by  consenting  that 
the  time  for  payment  should  be  extended, 
and  then  coming  down  upon  him  by  in- 
sisting that  there  had  been  a  default.  And 
even  if  money  were  offered  by  the  mort- 
gagor the  next  day,  and  it  were  accepted 
by  the  mortgagee,  the  result  would  be  the 
same.  '  Default '  must  mean  a  default 
where  something  is  not  done  by  the  mere 
act  of  omission  of  the  one  party,  and  not 
an  omission  with  the  concurrence  of  the 
other  party.  And  in  the  present  case,  the 
voluntary  extension  of  the  time  by  Bayne 
alters  the  character  of  the  act  of  the  plain- 
tiff, which  would  otherwise  have  been  a 
default." 


CHAPTER  XXVI. 

TVHEN    THE   EIGHT   TO   FORECLOSE   IS   BAERED.      1192-1214. 

1192.  Statutes  of  limitation  are  as  a  general  rule  only  ap- 
plicable as  such  to  proceedings  at  law  ;  but  without  having  any- 
binding  force  upon  courts  of  equity  they  have  been  adopted  here 
by  analogy  as  fixing  the  time  within  which  rights  may  be  enforced 
in  equity.^  Following  this  analogy  the  right  of  the  mortgagee  to 
foreclose  and  of  the  mortgagor  to  redeem  is  presumed  to  be  barred 
after  the  lapse  of  such  a  period  as  is  prescribed  by  the  statute  for 
enforcing  a  right  of  entry  upon  lands.  This  period,  by  the  Eng- 
lish Statute  of  Limitation  of  32  Henry  8,  and  21  James  1,  and 
by  the  earlier  statutes  enacted  in  this  country,  which  generally 
followed  the  English  statute,  was  twenty  years  ;  ^  and  following 
the  analogy  of  these  statutes  so  long  as  they  remained  in  force, 
the  lapse  of  this  period  was  in  the  same  way  presumed,  as  between 
a  mortgagor  and  mortgagee,  to  be  a  bar  to  the  rights  of  the  one 
as  against  the  other.  In  the  early  case  of  White  v.  Ewer,^  "  the 
Lord  Keeper  declared  that  he  would  not  relieve  mortgages  after 
twenty  years;  for  that  the  statute  of  21  Jac.  1,  c.  16,  did  adjudge 
it  reasonable  to  limit  the  time  of  one's  entry  to  that  number  of 
years  ;  unless  there  are  such  particular  circumstances  as  may  vary 
the  ordinary  case,  as  infants, /eme«  covert^  &c.  are  provided  for  in 
the  very  statute  ;  though  those  matters  in  equity  are  to  be  gov- 

1  Ayres  v.  Waite,  10  Cush.  (Mass.)  72;  next  after  his  or  their  right  or  title  which 
Morgan  v.  Morgan,  10  Ga.  297  ;  per  contra  shall  hereafter  first  descend  or  accrue  to 
Lord  Redcsdale,  4Bligh,  119,  said  thestat-  the  same;  and  in  default  thereof,  such  per- 
ute  was  meant  to  bind  courts  of  equity,  sons  so  entering,  and  their  heirs,  shall  be 
Pitzer  I'.  Burns,  7  W.  Va.  6.3,  69.  utterly  excluded  and  disabled  from  such 

2  The  words  of  the  statute  21  James  1,  entry  after  to  be  made,  any  former  law  or 
c  16,  §  1  are,  that  "  for  quieting  men's  es-  statute  to  the  contrary  notwithstanding." 
tate,  be  it  enacted,  th.'it  no  person  or  per-  In  case  of  disabilities  entry  may  Iw  made 
sons  shall,  at  any  time  hereafter,  make  within  ten  years  after  the  removal  of  the 
any  entry  into   any  lands,  tenements,  or  same. 

hereditaments,  but  within    twenty   years         '  2  Vent.  340. 

213 


§  11 0:^.]        WHl'N    THK    RIGHT    TO    FORECLOSE   IS   RARRED. 


erned  by  tlio  course  of  the  court,  and  that  't  is  best  to  square  the 
rules  of  equity  as  near  the  rules  of  law  and  reason  as  may  be." 

It  is  the  general  rule,  therefore,  that  no  interest  having  been 
paid,  and  no  entry  made  under  the  mortgage,  or  other  proceedings 
bad  to  enforce  tlie  mortgage,  it  is  presumed  as  a  matter  of  fact 
from  these  circumstances  that  the  mortgage  lias  been  discharged 
by  payment  or  otherwise.  This  presumption  of  fact  is,  however, 
always  liable  to  be  controlled  by  other  evidence.  The  period  of 
twenty  years  is  not  adopted  as  a  fixed  and  positive  limitation  of 
right,  but  as  an  equitable  rule  after  the  analogy  of  the  statute  of 
limitations.^  In  those  states  in  which  the  time  of  limitation  has 
been  made  less  than  twenty  years,  still  following  the  analogy  of 
the  statute  of  limitations,  a  corresponding  period  is  adopted  in 
equity  as  a  bar  to  a  suit  to  foreclose  or  redeem  a  mortgage.^ 

1193.  The  tendency  of  legislation  has  been  to  reduce  the 
period  of  limitation  within  which  suits  relating  to  real  property 
shall  be  brought.^  A  statement  is  appended  of  the  periods  of  lim- 
itation in  the  several  states  applicable  to  actions  for  the  recovery 
of  real  property.*     A  reference  to  the  earlier  statutes  in  several 


1  In  Iowa,  the  statute  of  limitations  is 
held  to  apply  directly  to  suits  in  equity  as 
well  as  suits  at  law,  and  to  bar  a  suit  to 
foreclose  a  mortgage  after  the  lapse  of  ten 
years.  Newman  v.  De  Lorimer,  19  Iowa, 
244 ;  Hendershott  v.  Ping,  24  Iowa,  134. 
The  right  to  foreclose  a  title  bond  is 
barred  in  the  same  time.  Day  v.  Bald- 
win, 34  Iowa,  380. 

'^  As  in  Vermont:  Richmond  v.  Aiken, 
25  Vt.  324;  Martin  v.  Bowker,  19  Vt. 
52G;  Merriam  v.  Barton,  14  Vt.  501. 
Connecticut :  Haskell  v.  Bailey,  22  Conn. 
.569  ;  Crittcndon  v.  Brainard,  2  Koot,  485. 
Alabama:  Gunn  v.  Brantley,  21  Ala. 
633.  Kentucky :  field  v.  Wilson,  6  B. 
Mon.47'J.  Iowa:  Crawford  v.  Taylor,  42 
Iowa,  260. 

*  "  It  might  at  first  sight  be  considered 
that  the  duration  of  wrong  ought  not  to 
give  it  a  sanction,  and  that  the  long  suf- 
fering of  injury  should  be  no  bar  to  the 
obtaining  of  right  when  demanded.  But 
human  affairs  must  be  conducted  on  other 
principles.  It  is  found  to  be  of  the  great- 
est importance  to  promote  peace  by  affix- 

214 


ing  a  period  to  the  right  of  disturbing 
possession.  Experience  teaches  us,  that 
owing  to  the  perishable  nature  of  all  evi- 
dence, the  truth  cannot  be  ascertained  on 
any  contested  ciuestion  of  fact  after  a  con- 
siderable lapse  of  time.  The  temptation 
to  introduce  false  evidence  grows  with 
the  difficulty  of  detecting  it ;  and  at  last, 
long  possession  affords  the  proof  most 
likely  to  be  relied  upon  of  the  right  of 
property.  Independently  of  the  question 
of  right,  the  disturbance  of  property  after 
long  enjoyment  is  mischievous.  It  is  ac- 
cordingly found  both  reasonable  and  use- 
ful that-  enjoyment  for  a  certain  period 
of  time  against  all  claimants  should  be 
considered  conclusive  evidence  of  title." 
First  Ilei)ort  of  the  Real  Property  Com- 
missioners of  England,  1829,  p.  39. 

*  Alabama;  Ten  years.  R.  C.  1876, 
§  3225.  Arkansas:  Five  years.  Dig.  of 
Stat.  1874,  §  4118.  California:  An  action 
upon  any  contract,  obligation,  or  liability, 
founded  upon  an  instrument  in  writing  ex- 
ecuted in  this  state  must  be  brought  within 
four  years.    This  is  held  to  apply  to  mort. 


WHEN   THE   RIGHT    TO    FORECLOSE   IS   BARRED.         [§  1193. 


states  will  show  that  the  period  has  been  materially  shortened  in 
the  present  statutes.     But  the  history  of  the  law  of  limitations  in 


pages,  which  are  not  re<:arded  as  convey- 
ances of  land.     Code  of  Civil  Procedure, 
§337;  Amendments,  1874,  p.  291.    Colora- 
do :  Six  years.    R.  S.  1868,  p.  438.    Connec- 
ticut:   Fifteen  years.     G.  S.  1875,  p.  493. 
Dakota  Territory:  Twenty  years.    R.  C. 
1877,  p.  515.     Delaware:    Twenty  years. 
R.  C.  1874,  p.  727.    Florida  :   Seven  years. 
Laws,   1872,   p.    20.      Georgia:    Twenty 
years ;  or  seven  years  under  written  evi- 
dence of  title.     Code,  1873,  §§  2682,  2683. 
And  see  Parker  y.  Jones,  57  Ga.  204.  Idaho 
Territory:  Five  years.    R.  L.  1875,  p.  588. 
Illinois :    An   action  or   sale  to   foreclose 
any  mortgage  or  deed  of  trust  in  the  nat- 
ure of  a  mortgage  is  limited  to  ten  years 
after  the  right  of  action  or  right  to  make 
such  sale  accrues.     Real  actions    are  lim- 
ited  to  twenty  years.     R.  S.  1877,  c.    83, 
§§  1 ,  11.   Indiana :  Twenty  years.    Gavin  & 
Hord,  vol.  2,  p.  159  ;  Rev.  1876,  vol.  2,  p. 
124.      Iowa:   Ten  years.      Code,  1873.  p. 
432.    Kansas  :  Fifteen  years.     G.  S.  1868, 
C.  80,  §  16;   Dassler's  Stat,  of  Kans.  1876, 
p.  644.    Kentucky:  Fifteen  years.     G.  S. 
1873,  c.  71,  §  1.      Maine:  Twenty  years. 
R.  S.  1871,  c.   105,  §  1.      Massachusetts: 
Twenty  years.     G.  S.  1860,  c.  154,  §  I. 
Michigan:  Fifteen  years.       C.   L.   1871, 
§  7137.  Minnesota:  An  action  to  foreclose 
a  mortgage  upon  real  estate  must  be  com- 
menced within  ten  years  after  the  cause  of 
action  accrues.      Laws,  1870,  c.  60.     This 
act  did  not  apply  to  power  of  sale  mort- 
gages.    Golcher  v.  Bri.shin,  20  Minn.  453. 
By  Laws  1871,  c.  52,  mortgages  containing 
powers  of  sale  must  be  foreclosed  within 
the  same  time.      Sec,  also,  Archambau  v. 
Green,  21   Minn.  .'ii.'O  ;  Parsons  v.  Nogglc, 
23  Minn.  328.     Mississippi:  No  action  or 
other  proceeding  can  lie  had  upon  a  mort- 
gage or  (Ir-ed  to  recover  the  money  secured, 
except  within  the  time  that  may  be  allowed 
for  the  commencement  of  an  action  at  law 
upon  such  writing  ;  and  in  all  cases  where 
the  remedy  at  law   to  recover  the  debt  is 
barred,  the  remedy  in  equity  on  the  mort- 
gage is  barred.      Actions  on  contracts  not 


under  seal  are  limited  to  six  years ;  and 
actions  on  open  account  to  three  years. 
R.  C.  1871,  §§  2150,  2151.  An  equitable 
mortgage  by  absolute  conveyance  is  sub- 
ject to  same  rule  when  mortgagor  remains 
in  possession.  Green  v.  Mizelle,  54  Miss. 
220.  Missouri:  Ten  years.  2  Wag- 
ner's Stat.  1S70,  p.  915.  Montana  Terri- 
tory: Three  years.  Laws,  1872,  p.  516. 
Nebraska:  Actions  to  foreclose  mort- 
gages must  be  commenced  within  ten  years 
after  the  cause  of  action  accrues.  G.  S. 
1873,  p.  525.  Nevada:  Four  years,  as  in 
Cal.  C.  L.  1873,  §§  1020,  1031  ;  Henry 
V.  Confidence,  &c.  Co.  1  Nev.  619.  New 
Hampshire:  Actions  for  the  recovery  of 
real  estate  are  limited  to  twenty  years. 
Actions  upon  notes  secured  by  mortgage 
may  be  brought  so  long  as  the  plaintiff  is 
entitled  to  bring  an  action  upon  the  mort- 
gage. G.  S.  1867,  c.  202,  §§  1  &  5 ;  G.  L. 
1878,  c.  221,  §§  1  &  5.  New  Jersey: 
Twenty  years.  Nixon's  Dig.  1868,  p.  512  ; 
Rev.  1877,  p.  597.  New  York:  Twenty 
years.  3  Fay's  Dig.  of  Laws,  1876,  p.  518. 
This  applies  to  foreclosure  suits ;  but  suits 
for  redemption  must  be  brought  within 
ten  years.  North  Carolina  :  Action  must 
be  commenced  within  ten  years  after  the 
forfeiture  of  the  mortgage,  or  after  the 
power  of  sale  became  absolute,  or  within 
ten  years  after  the  last  payment  on  it. 
Battle's  Rev.  1873,  p.  149.  Oregon:  Ac- 
tions for  the  recovery  of  real  property  and 
suits  in  equity  to  determine  any  right  or 
claim  to  real  property  may  be  brought 
within  twenty  years.  An  action  upon  a 
sealed  instrument  within  ten  years.  G.  L. 
1872,  p.  106.  A  foreclosure  suit  is  not  re- 
garded as  a  suit  upon  a  real  estate  interest, 
and  therefore  is  barred  in  ten  years  as  a 
suit  u])on  a  scaled  instrument.  Eubanks  ?). 
Levcridgo,  4  Sawyer,  274.  Pennsylva- 
nia: Twenty -one  years.  Brightly 's  Pur- 
don's  Dig.  vol.  2,  p.  927.  Rhode  Island: 
Twenty  years.  G-  S.  1872,  c.  194,  §  4. 
South  Carolina :  Twenty  years.  R.  S.  1 873, 
p.  588.     Tennessee:  Seven  years.     Code, 

215 


§   Hi':'..]  WHIN    THE    HICIIT    TO    FOUKCLOSK    IS    BARRKD. 

England  illustniti's  this  f;n't  nio.st  forcihly.  At  common  law  there 
was  no  period  of  limitation  within  which  any  action  now  in  use 
should  bo  brought.  An  uncertain  doctrine  of  presumption  was 
api)lied  against  stale  demands  and  claims. 

Previous  to  tlie  reign  of  Henry  VII.  there  was  no  statute  pre- 
scribing a  period  of  a  certain  number  of  years  within  which  the 
assertion  of  a  claim  to  real  estate  was  limited  ;  though  dilYerent 
events  had  been  selected  by  successive  enactments,  from  the 
Anglo-Norman  times  down  to  the  time  of  Henry  VII.,  as  periods 
of  limitation  beyond  which  clainuints  should  not  go  for  the  foun- 
dation of  titles  as  against  persons  who  had  been  in  possession  since 
the  specifieil  time.  The  lapse  of  time  rendered  fresh  starting 
points  necessary  to  the  security  of  titles.  The  beginning  of  the 
reign  of  Henry  I.,  of  Richard  I.,  the  last  i-eturn  of  King  John  out 
of  Ireland  into  England,  the  coronation  of  King  Henry  III.,  and 
the  first  voyage  of  King  Henry  III.  into  Gascony,  were  periods  of 
limitation  successively  selected.^ 

"  A  profitable  and  necessary  statute,"  passed  near  the  close  of 
the  reign  of  Henry  VIII.,^  for  the  first  time  provided  a  fixed 
period  of  limitation  within  which  actions  should  be  brought.  The 
general  period  for  actions  for  the  recovery  of  real  estate  was  three- 
score years.  By  the  statute  of  James  I.  this  period  was  reduced 
to  twenty  years.  By  the  recent  act,  which  went  into  operation 
on  the  first  day  of  January  1879,  the  period  is  reduced  to  twelve 
years. ^ 


1871,  §§  27G3-2765.  Texas:  Ten  years. 
Paschal's  Dig.  1873,  p.  765.  Vermont :  Fif- 
teen years.  G.  S.  1862,  p.  442,  §  1.  Vir- 
ginia: Fifteen  years.  Code,  1873,  p.  997. 
West  Virginia :  Ten  years.  Code,  1870, 
J).  540.  Wisconsin :  Twenty  years.  R.  S. 
1878,0.  177,  §  4209.  The  twenty  years' 
limitation  applies  to  suits  for  tlie  fore- 
closure of  mortgages  on  the  ground  that 
they  are  instruments  under  seal.  Whipple 
V.  Barnes,  21  Wis.  327.  A  suit  to  re- 
deem, however,  must  be  brought  within 
ten  years,  as  this  is  an  equitable  action 
coming  within  a  clause  of  the  statute  lim- 
iting actions  not  otherwise  specified  for. 
Knowlton  i;.  Walker,  13  Wis.  204.  R.  S. 
1878.  §4227.  Wyoming  Territory  :  Twen- 
ty-one years.     C.  L.  1876,  p.  34. 

216 


1  See  Stat,  of  Merton  (20  Henry  3),  c. 
8;  Stat,  of  West.  1  (3  Edw.  1),  c.  39; 
see  Edson  v.  Munsell,  10  Allen  (Mass.), 
557,  for  a  sketch  of  the  history  of  the  Flng- 
lish  Statute  of  Limitations  and  of  that  of 
Massachusetts.  And  see  Fellows  v.  Clay, 
4  Q.  B.  354,  per  Lord  Denman,  C.  J. 

2  Co.  Litt.  §  115  a;  32  Henry  8,  c.  2. 

8  By  the  Real  Property  Limitation  Act, 
1874,  which  went  into  operation  on  the 
first  day  of  .January,  1879,  "No  action  or 
suit  or  other  proceeding  shall  be  brought 
to  recover  any  sum  of  money  secured  by 
any  mortgage,  judgment,  or  lien,  or  other- 
wise charged  upon  or  payable  out  of  any 
land  or  rent,  in  law  or  in  equity,  or  any 
legacy,  but  within  twelve  years  next  after 
a  present  right  to  receive  the  same  shall 


WHEN   THE   RIGHT    TO    FORECLOSE   IS   BARRED.         [§  1194. 

1194.  In  some  early  cases  it  was  declared  that  the  presump- 
tion of  payment  arising  from  the  lapse  of  time,  though  appli- 
cable to  a  bond  secured  by  the  mortgage,  whs  not  applicable  to 
the  mortgage  itself,  inasmuch  as  the  legal  estate  was  in  the  mort- 
gagee, and  the  mortgagor  was  regarded  as  a  mere  tenant  at  will, 
whose  possession  was  therefore  the  possession  of  the  mortgagee. ^ 
This  doctrine  was,  however,  repudiated  by  Lord  Thurlow  in 
1791,2  and  it  has  not  in  any  case  since  been  asserted.     The  fact 


have  accrued  to  some  person  capable  of 
giving  a  discharge  for  or  release  of  the 
same,  unless  in  the  mean  time  some  part  of 
the  principal  money,  or  some  interest  there- 
on, shall  have  been  paid,  or  some  acknowl- 
edgment of  the  right  thereto  shall  have 
been  given  in  writing,  signed  by  the  per- 
son by  whom  the  same  shall  be  payable,  or 
his  agent,  to  the  person  entitled  thereto,  or 
his  agent ;  and  in  such  case  no  such  action 
or  suit  or  proceeding  shall  be  brought  but 
within  twelve  years  after  such  payment  or 
acknowledgment,  or  the  last  of  such  pay- 
ments or  acknowledgments,  if  more  than 
one,  was  given."     37  &  38  Vict.  c.  57,  §  8. 

1  Toplis  W.Baker,  2  Cox,  118;  Lcman 
V.  Newnham,  1  Ves.  Sen.  .51  ;  Dictum  in 
Cholmondcley  v.  Clinton,  2  Meriv.  360. 

2  Trash  v.  White,  3  Bro.  Ch.  289.  The 
Lord  Chancellor  said  :  "  That  if  the  case 
was  clear  that  no  interest  had  been  paid 
for  twenty  year.s,  he  had  always  under- 
stood that  it  did  raise  the  presumption, 
that  the  principal  had  been  paid ;  but 
there  must  not  only  be  non-payment  of 
interest,  but  no  demand ;  and,  in  that  case, 
he  thought  the  presumption  on  a  mort- 
gage as  strong  as  that  at  law."  In  Chris- 
tophers V.  Sparke,  2  Jac.  &  W.  223,  though 
the  decision  turned  upon  another  ])oint. 
Sir  Thomas  I'lumer,  Master  of  the  Rolls, 
»aid,  in  relation  to  tiiis  (iiiestion  of  j)re- 
Bi'.mption  :  "  I  cannot  accede  to  the  doc- 
trine, that  no  length  of  lime  will  operate 
against  a  mortgagee  who  has  been  out  of 
posscHsion  without  claim  or  acknowledg- 
ment. The  argument  of  there  iKjing  ii 
tenancy  at  will  ariseH  from  a  mere  fiction  ; 
for  there  is  no  actual  tenancy,  no  deniisc, 
cither  expresH  or  implied.      A  mortgagor 


has  not  even  the  rights  of  a  tenant  at 
will;  he  may  be  turned  out  of  possession 
without  notice,  and  is  not  entitled  to  the 
emblements.  It  is  only  qnodam  inodo  a 
tenancy  at  will,  as  Lord  Mansfield  says, 
in  one  of  the  cases.  Moss  v.  Gallimore,  1 
Doug.  279.  We  cannot  push  it  to  that  ex- 
tent, reasoning  on  the  supposed  relation  of 
landlord  and  tenant,  which  is  not  founded 
in  fact.  The  relation  of  mortgagor  and 
mortgagee  is  peculiar  :  in  a  court  of  equity 
the  former  is  considered  as  owner;  and 
that  is  the  nature  of  the  contract  between 
them  ;  the  tacit  agreement  is,  that  he  is  to 
be  the  owner  if  he  pays.  Then  what  is  to 
be  the  effect  of  one  person's  continuing  for 
twenty  years  in  possession  of  the  estate  of 
another,  who  does  nothing  to  make  good 
his  title,  and  to  keep  alive  the  relation  of 
mortgagor  and  mortgagee'?  The  difficulty 
I  feel  is,  that  if  twenty  years'  possession, 
without  claim  on  the  part  of  the  mort- 
gagee, will  not  operate  as  a  defence  against 
him,  I  do  not  see  how  any  period  of  time, 
however  long,  can  bar  him.  If  the  fic- 
tion of  a  tenancy  at  will  is  an  answer  to 
the  objection  after  twenty  years,  why  will 
it  not  be  an  answer  after  any  other  time'? 
There  would  be  no  ))Ossibility  of  stopping. 
With  respect  to  the  mortgagor,  it  is  dear 
that  his  equity  is  shut  out  by  the  mort- 
gagee being  in  possession  for  twenty  years 
without  acknowledgment;  then  why  should 
this  not  be  recijjrocal  ?  Why  should  it  be 
necessary  for  the  relation  to  be  kept  alive 
in  the  one  case,  and  not  in  the  otiicr  ? 
For  these  reasons,  though  I  do  not  give 
a  i>ositive  opinion,  I  cannot  agree  to  the 
doctrine  intimated  in  tlie  cases  alluded 
to." 

217 


§  no.").]      wiir.N  TiiK  iJicnr  to  foreclose  is  barred. 

that  the  debt  is  securt'd  by  ;i  iiiortga^o  doos  not  place  it  on  any 
dilTeivnt  footini;  fn)in  a  dt'bt  duo  upon  a  bond  without  a  mort- 
ijago,  but  is  liable  to  be  defeated  by  the  same  presumption,  aris- 
ing from  lapse  of  time  and  laches  of  the  mortgagee. 

Although  the  mortgagor  is  not  a  tenant  at  will  to  the  mort- 
gagee in  any  such  sense  that  his  possessicm  cannot  become  ad- 
verse, yet  tlie  resemblance  holds  to  this  extent,  that  so  long  as  the 
mortgagor  acknowledges  his  relation  to  the  mortgagee,  by  pay- 
ment of  interest  or  the  like,  his  jiossession  is  the  possession  of  the 
mortgagee.^  The  mortgagor  may  convey,  mortgage,  or  lease  the 
premises,  or  deal  with  them  in  other  ways  as  the  owner  of  them, 
without  rendering  his  possession  hostile  to  the  mortgagee.  The 
constructive  possession  of  the  mortgagee  continues  nntil  the  mort- 
gagor's holding  is  either  in  opposition  to  the  will  of  the  mortgagee 
or  is  without  anv  recognition  of  his  right.^ 

1195.  This  doctrine  of  presumption  has  been  one  of  fre- 
quent application  against  the  mortgage  debt,  and  is  fully  estab- 
lished everywhere.^  It  arises  from  the  policy  of  the  law.  It  does 
not  proceed  necessarily  on  a  belief  that  payment  has  actually 
taken  place.*  The  lapse  of  time  and  the  neglect  of  the  mortgagee 
to  enforce  his  demand  against  the  mortgagor,  when  he  continues 

1  In  Harris  v.  Mills,  28  111.  44,  Mr.  Jus-  Vt.  750 ;  Martin  v.  Jackson,  27  Pa.  St. 
tice  Walker  says :  "It  has  been  said  that  504;  Benson  v.  Stewart,  30  Miss.  49; 
no  length  of  time  will  bar  a  foreclosure  by  Boyd  v.  Beck,  29  Ala.  70.3  ;  Drayton  v. 
a  mortgajjee  out  of  possession.  This  is  Marshall,  Kice  (S.  C.)  Eq.  373;  I'itzer  v. 
placed  upon  the  ground  that  the  relation  Burns,  7  W.  Va.  63. 

of  landlord  and  tenant  is  supposed  to  ex-  *  Howland  v.  Shurtleff,  2  Met.  (Mass.) 
ist  between  the  parties.  But  such  is  not  26;  Inches  v.  Leonard,  12  Mass.  379; 
the  true  relation  of  the  parties.  For  Bacon  v.  Mclntire,  8  Met.  (Mass.)  87  ; 
some  purposes,  and  to  a  limited  extent  Hughes  v.  Edwards,  9  Wheat.  498 ;  Col- 
only,  a  portion  of  the  incidents  are  the  lins  v.  Torry,  7  Johns.  (N.  Y.)  278;  Jack- 
same.  To  a  limited  extent,  and  for  some  son  v.  Wood,  12  lb.  242;  Jackson  v.  Pratt, 
purposes,  the  relation  of  vendor  and  ven-  10  lb.  381  ;  Giles  v.  Baremore,  5  Johns, 
dee,  and  trustee  and  cestui  que  trust,  also  (N.  Y.)  Ch.  552;  Newcomb  v.  St.  Peter's 
exists."  Ch.  2  Sandf.  (N.  Y.)  Ch.  636  ;  Martin  v. 

2  Doe  V.  Williams,  5  A.  &  E.  291  ;  6  Bowker,  19  Vt.  526;  Field  v.  Wilson,  6 
Nev.  &  M.  816;  Doe  v.  Surtees,  5  B.  &  B.  Mon.  (Ky.)  479;  McNair  v.  Lot,  34 
Aid.  687  ;  Iligginson  v.  Mein,  4  Cranch,  Mo.  285;  Nevitt  v.  Bacon,  32  Miss.  212  ; 
415;  Howland  v.  Shurtleff,  2  Met.  (Mass.)  Wilkinson  v.  Flowers,  37  Miss.  579;  Mc- 
26;  Inches  v.  Leonard,  12  Mass.  379  ;  Donald  v.  Sims.  3  Kelly  (Ga.),  383  ;  Hoff- 
Sheafe  v.  Gerry,  18  N.  H.  245;  Howard  man  v.  Harrington,  33  Mich.  302;  Key- 
V.  Hildreth,  18  N.  H.  105;  Roberts  v.  nolds  i'.  Green,  10  Mich.  355. 
Littlefield,  48  Me.  61  ;  Chick  v.  Rollins,  *  Hillary  v.  Waller,  12  Ves.  239,  252, 
44   Me.  104  ;  Bates  v.  Conrow,  3  Stockt.  per  Sir  William  Grant. 

(N.  J.)  137;   Atkinson   v.  Patterson,  46 
218 


WHEN   THE   RIGHT   TO    FORECLOSE   IS   BARBED.         [§  1196. 

in  adverse  possession  without  recognizing  the  debt  in  any  way, 
are  grounds  for  a  presumption  in  fact,  which  unexplained  author- 
izes a  jury  to  infer  that  the  mortgage  is  satisfied,  and  is  a  suffi- 
cient answer  to  a  bill  by  the  mortgagee  to  foreclose.  A  bill  to 
foreclose  does  not  lie  after  the  mortgagor  has  held  adverse  posses- 
sion for  a  period  equal  to  the  statute  period  of  limitations  for  real 
actions.^  But  the  fact  that  there  has  been  no  recognition  of  the 
mortgage  debt  for  a  period  less  than  the  statute  period  of  limita- 
tion, as,  for  instance,  nineteen  years,  affords  no  presumption  of 
payment.^ 

If  the  mortgagor  remains  in  possession  for  twenty  years  with- 
out paying  interest  or  rent,  or  otherwise  admitting  that  the  mort- 
gage debt  is  unpaid,  this  is  good  presumptive  proof  of  payment, 
and  a  defence  to  an  action  for  foreclosure.^  This  rule  applies 
equally  to  estates  held  in  trust ;  the  equitable  rule,  that  the  stat- 
ute of  limitations  does  not  bar  a  trust  estate,  holds  only  as  be- 
tween cestui  que  trust  and  trustee,  and  not  between  a  cestui  que 
trust  and  trustee  on  the  one  side  and  a  stranger  on  the  other.* 
Neither  does  it  matter  that  the  cestui  que  trust  is  under  disability, 
if  there  be  a  trustee  to  represent  him.^ 

The  mortgagor  may  avail  himself  of  the  benefit  of  this  pre- 
sumption of  payment  not  only  in  defence  to  a  foreclosure  suit  but 
in  a  bill  for  reconveyance  of  the  property,  which  he  is  constrained 
to  bring  for  his  protection  against  a  judgment  creditor  of  the 
mortgagee,  who  with  full  knowledge  of  the  fact,  that  the  deed  to 
the  latter  is  merely  a  mortgage,  is  about  to  proceed  to  sell  the 
mortgaged  premises  as  the  property  of  the  mortgagee.^ 

1196.  The  presumption  of  payment  is  not  conclusive  in 
favor  of  a  mortgagor  who  has  been  in  uninterrupted  possession  for 
twenty  years,  Init  may  be  controlled  by  evidence  of  part  payment 
of  principal  or  interest,  or  other  admissions  or  circumstances  from 
which  it  may  be  found  that  the  debt  is  still  unpaid  ;  but  parol 
evidence  to  control  this    presumption  should    clearly  show  some 

1  Clevclnnd  Ins.  Co.  v.  Reed,  24   How.  Trait,  10  lb.  381  ;  Collins  v.  Torry,  7  lb. 

284  ;  Downs  v.  Sooy,  28  N.  J.  Eq.  55.  278  ;  Jiickson  v.  Hudson,  3  lb.  375. 

*  Boon  V.  Picrpont,  28  N.  J.  Eq.  7.  ■•  Lord  Hardwick,  in  Lk-wtllin  d.  Mack- 

*  Bacon  V.  Mclntirc.  8  Met.  (Mass.)  87;  worth,  15  Vin.  Alir.  125,  pi.  1  ;  Hond  v. 
Chick  V.   Rollins,  44   Mc.  104;  Crook  v.  Hopkins,  1  Sch.  &  Lefr.  429. 

Glenn,  34  Md.  55  ;  Dcmarcst  v.  Wynkoop,         ^  Crook  v.  Glenn,  :w  Md.  55  ;  Wych  v. 
3  Johns.    (N.  Y.)    Ch.    135;   Jackson    i;.     East  India  Co.  3  P.  Wms.  .W.». 
Wood,  12  Johns.  (N.  Y.)  242  ;  Jackson  v.         «  Downs  i;.  Sooy,  28  N.  J.  Eij.  55. 

219 


§§  1197,  1198.]       WIIKN    THF,    RICHT    TO   FORECLOSK   IS    HAHRICI). 

positive  iU't  o[  unoipiivcH-al  rooojj^iiitioii  of  tlio  ilcbt  within  that 
tiiiu'.^  JMero  siK'iit  aciiuii'scence  in  the  niortgiigee's  demands  of 
payment,  without  a  well  defined  verbal  promise  to  pay  on  the 
part  of  the  mortgagor,  or  admission  on  his  })art  of  the  debt,  is  not 
suffieient  to  repel  the  presumption.^ 

A  new  promise  will  take  the  mortgage  out  of  the  statute  of 
limitations  ;  as,  for  instance,  where  a  note  and  mortgage  were 
presented  for  payment  or  renewal  to  the  makers,  who  wrote  and 
signed  at  the  foot  of  the  mortgage  a  promise  under  seal  to  renew 
the  note,  and  to  give  a  new  mortgage,  whenever  the  exact  amount 
of  the  debt  should  be  ascertained;  a  plea  of  the  statute  of  lim- 
itations to  a  bill  to  foreclose  the  mortgage  was  disallowed.^ 

But  an  extension  of  a  mortgage  which  covers  a  homestead  not 
executed  by  the  wife  of  the  mortgagor  does  not  have  the  effect  to 
keep  the  nn>rtgage  on  foot  as  against  the  homestead  right."* 

1197.  Presumption  of  payment  is  repelled  by  circumstances 
which  evince  an  improbability  of  any  discharge,^  as  well  as  by 
an  express  acknowledgment  of  the  debt,  or  by  acts  recognizing 
it.  Thus,  this  presumption  has  been  considered  as  answered  by 
showing  that  the  mortgage  debt  belonged  to  the  mother  of  the 
owner  of  the  estate  mortgaged,  and  tiiat  she  had  not  permitted 
the  title  deeds  to  be  delivered  to  him.^ 

It  has  even  been  held  in  a  case  where  it  was  shown  that  the 
parties  to  a  bond  resided  in  a  country  which  was  occupied  by  con- 
tending armies  and  was  in  such  a  disturbed  condition  as  to  ren- 
der it  highly  improbable  that  debts  could  or  would  be  collected, 
the  time  during  which  the  war  continued  should  not  be  computed 
as  forming  any  part  of  the  time  whose  lapse  gives  rise  to  a  pre- 
sumptifju  of  payment.'  But  ordinarily  the  absence  of  the  mort- 
gagor from  the  state  when  the  cause  of  action  accrues  or  after- 
■wards  does  not  suspend  or  prevent  the  statute  of  limitations  from 
running  against  a  suit  to  foreclose  the  same,  for  the  reason  that 
the  remedy  may  be  as  well  pursued  during  his  absence  as  in  his 
presence.^ 

1198.  A  payment  of  interest  or  of  part  of  the  principal  re- 

1  Jarvis  ».  AUiro,  67  Me.  .'ilO.  &  Brobst   v.   Brock,    10   Wallace    519; 

2  Cheever  v.  Perley,  11  Alltii  (Mass.),     Snavely  v.  Pickle,  29  Gratt.  (Va.)  27. 
5&4.  8  Iceman  v.  Newnham,  1  Ves.  51. 

3  Hart  V.  Boyt,  54  Miss.  547.  ^  Uiile  v.  Pack,  10  W.  Va.  145. 

*  Wells  V.  IIar{X;r,  51  Cal.  — ;  7  Re-  ^  Eubanks  y.  Leveridr,'e,  4  Sawyer,  274; 
porter,  266.  Anderson  v.  Baxter,  4  Oregon,  107. 

220 


WHEN   THE   RIGHT   TO   FORECLOSE   IS    BARRED.       [§  1198. 

news  the  mortgage,  so  that  an  action  may  be  brought  to  enforce 
it  within  twenty  years  alter  such  last  payment.  This  is  a  rule 
universally  recognized.  Where  there  are  several  persons  inter- 
ested in  the  equity  of  redemption,  such  payment  by  one  of  them 
keeps  alive  the  right  of  entry  not  only  against  him,  but  also 
against  all  other  owners  of  the  equity.^  Payment  by  an  agent  of 
the  mortgagor,  as,  for  instance,  by  his  solicitor,  has,  of  course,  the 
same  effect  as  a  payment  by  the  mortgagor  himself  ;  ^  but  pay- 
ment by  a  stranger  does  not  affect  the  mortgagor's  rights.^  Ac- 
knowledgment of  the  debt  made  to  a  stranger  does  not  avoid 
the  running  of  the  statute  of  limitations.^  Payments  of  interest 
by  a  tenant  for  life  are  binding  upon  those  entitled  to  the  remain- 
der;^ and  payments  by  the  widow  of  the  mortgagor,  while  in 
possession  under  her  right  of  dower,  prevent  the  statute  running 
against  the  mortgagee  in  favor  of  the  heirs  at  law.^ 

But  a  payment  made  by  a  mortgagor  after  he  has  sold  or  mort- 
gaged the  premises  to  another  will  not  repel  the  presumption  of 
payment  arising  from  the  lapse  of  twenty  years  from  the  time 
when  the  mortgage  became  due,  so  far  as  the  subsequent  pur- 
chaser or  mortgagee  is  concerned.  Neither  does  a  lease  from  a 
mortgagee "  to  his  mortgagor  more  than  twenty  years  after  the 
maturity  of  the  mortgage  debt  affect  the  rights  of  a  subsequent 
purchaser  or  mortgagee  of  the  property.^ 

If  the  mortgagee  be  a  tenant  for  life  of  the  mortgaged  estate, 
and  as  such  receives  the  rents,  the  statute  does  not  run  against  the 

1  See  Pears  v.  Laing.  L.  R.  12  Eq.  51,  any   right  of  action,  that  right   will   he 
54;  Roddam  v.  Morley,  1  De  G.  &  Jo.  1.  saved  not  only  against  tlie  party  making 
In  this  case,  it  was  held  that  a  payment  of  the  payment,  but  also  against  all  other 
interest  by  the  tenant  for  life  of  a  devised  parties  liable  on  the  specialty."     He  fur- 
estate  keeps  a  specialty  alive  against  the  thcr  says,  that  as  the  statute  docs  not  so 
persons  entitled   to  the  remainder.     Lord  restrict  the  effect  of  the  payment  the  court 
Cranworth,  in  the  Court  of  Appeals,  said  :  cannot  restrict  it. 
"  Who  is  affected  by  the  payment?     Does  2  Ward  v.  Carttar,  L.  R.  1  Eq.  29. 
it  operate  against  the  party  only  by  whom  '  Chinnery  v.  Evans,  11  H.  L.  Ca.  115. 
the  payment  ia  made  1  or  docs  it  affect  all  *  Schmucker  v.  Sibcrt,  18  Kans.  104. 
the  other  parties  liable  1     Does  it  merely  ''  Roddam    i'.   Morley,  supra  ;    Toft  v. 
enable   the  creditor  to  sue   the  party  by  Stephenson,!  De  G.,Mac.  &  G.  40;  Pears 
whom  the  payment  was   made,  or  does  it  v.  Eaing,  supra. 

•etfrce  the  action  generally  1   I  have  come  ^  Ames  v.  Manncring,  20  Heav.  583. 

to  the  conclusion   that  when  a  part  pay-  »  New  York  Life  Ins.  &  Trust  Co.  v. 

ment  or   payment   of  interest  has   lieen  Covert,  29  Barb.  (N.  Y.)  4.'{5. 

m«de,  which  has  the  effect  of  preserving  »  Jarvis  v.  Aibro,  G7  Me.  310. 

221 


§§  1109,  1200.]      WIIKN    TIIIC   RIGHT   TO    FORECLOSE   IS   BARRED. 

inortgagoil  title. ^  The  concurreiu'o  of  the  tenancy  for  life,  and 
the  right  to  receive  the  interest  on  the  mortgage  in  the  same  in- 
dividual, renders  it  impossible  for  him  to  make  any  acknowledg- 
ment of  that  title  to  himself;  but  it  being  his  duty  as  such  ten- 
ant to  keep  down  the  interest,  the  law  will  presume  that  he  does 
so  out  of  the  rents  received  by  him.  This  rule  being  in  favor 
of  the  remainder-men,  they  cannot  afterwards  be  permitted  to  con- 
tend that  the  interest  thus  deemed  to  have  been  kept  down  for 
their  benefit  was  not,  in  fact,  paid,  and  that  the  right  to  enforce 
the  mortgage  is  barred  by  the  statute  ;  under  such  circumstances 
the  statute  of  limitations  cannot  be  applied  against  the  mortgage. 
The  presumption  of  payment  or  release  of  the  mortgage  arising 
from  twenty  years'  possession  by  the  mortgagor  may  be  repelled 
by  evidence  of  the  payment  of  interest,  of  a  promise  to  pay,  or  of 
an  acknowledgment  that  the  mortgage  is  still  existing.^ 

The  receipt  of  rents  and  profits  by  one  holding  only  an  equita- 
ble mortgage  has  been  held  to  be  equivalent  to  a  part  payment.^ 

1199.  If  land  subject  to  a  mortgage  be  sold  to  different  pur- 
chasers, one  of  whom  pays  the  entire  interest  for  more  than 
twenty  years  without  calling  on  the  purchaser  of  another  portion 
for  contribution,  the  former  cannot,  upon  purchasing  the  mort- 
gage, enforce  it  against  the  latter  or  his  grantee.*  After  such  a 
lapse  of  time,  by  analogy  to  the  statute  of  limitations,  it  would 
seem  that  a  court  of  equity  should  conclusively  presume  that  the 
parties  had  agreed  the  latter's  portion  should  not  be  regarded  as 
subject  to  the  mortgage.  Of  course  the  holder  of  the  mortgage, 
having  received  the  payments  exclusively  from  one  part-owner, 
would  not  by  that  fact  alone  be  precluded  from  subjecting  to'  a 
foreclosure  the  whole  property  which  his  mortgage  covered.  He 
would  have  no  reason  to  know  or  inquire  from  whom  the  interest 
came,  or  to  whom  the  mortgagor  had  sold  the  land.  But  the  con- 
duct of  the  grantees  of  the  equity  of  redemption  in  respect  to 
the  interest  has  a  direct  bearing  upon  the  question,  which  of  them 
is  liable  for  the  payment  of  the  principal. 

1200.  The  payment  of  taxes  by  the  owner  of  the  equity  of 

1  Wynne  v.  Styan,  2  Ph.  303;  Lord  land  y.  Shurtleff,  2  lb.  26  ;  Ayres  ?;.  Waite, 
Carbery  v.  Preston,  13  Ir.  Eq.  455  ;  Bur-     10  Cush.  (Mass.)  72. 

rell  V.  Earl  of  Egremont,  7  Bcav.  205.  '  Brocklehurst  v.  Jessop,  7  Sim.  438. 

2  Hough  I'.  Bailey,  32  Conn.  288  ;  Ba-  <  Pike  v.  Goodnow,  12  Allen  (Mass.), 
con  V.  Mclntire,  8  Met  (Mass.)  87  ;  How-     472. 

222 


WHEN   THE   RIGHT    TO   FORECLOSE    IS   BARRED.       [§§  1201,  1202. 

redemption  does  not  in  any  way  contribute  to  make  bis  possession 
bostile  to  tbe  mortgagee  ;  nor  does  it  give  him  any  rights  against 
the  mortgagee  under  a  statute  making  seven  years'  payment  of 
taxes  with  a  record  title,  or  a  colorable  one  and  possession,  a  bar 
to  any  adverse  rights  or  proceedings  ;  for  it  is  his  duty  while  in 
possession  to  pay  the  taxes,  and  the  mortgagee  may  well  regard 
the  payment  as  made  in  his  interest  and  not  in  subversion  of  it.^ 

1201.  A  purchaser  assuming  the  payment  of  a  mortgage 
recognizes  it  as  a  subsisting  incumbrance,  and  cannot  set  up  the 
statute  of  limitations  against  it  until  twenty  years  from  that  time 
has  elapsed.  His  grantee  is  also  bound  by  such  admission  to  the 
same  extent  that  he  was  himself  bound.^  A  recital  in  a  deed  or 
mortgage  that  the  premises  are  subject  to  a  prior  mortgage  has 
the  same  effect.^  It  constitutes  an  admission  that  removes  the  bar 
of  the  statute  as  to  parties  to  the  deed. 

1202.  The  mortgagor's  grantee  has  no  greater  rights 
against  the  mortgagee  than  the  mortgagor  himself.  A  pur- 
chaser with  actual  notice  of  the  mortgage,  or  constructive  notice 
by  means  of  a  registry,  can  avail  himself  of  the  presumption  of 
payment  from  lapse  of  time  only  when  the  mortgagor  could  avail 
himself  of  it  under  the  same  circumstances.  The  grantee  succeeds 
to  the  estate  and  occupies  the  position  of  his  grantor.  He  takes 
subject  to  the  incumbrance ;  and  his  title  and  possession  are  no 
more  adverse  to  the  mortgagee  than  was  the  title  and  possession 
of  the  mortgagor.*  The  purchaser  is  bound  by  the  acts  and  dec- 
larations of  the  mortgagor  in  respect  to  the  mortgage  while  he 
retains  the  equity  of  redemption  or  any  part  of  it;  as,  for  in- 
stance, the  purchaser  of  a  part  of  the  mortgaged  premises  cannot 
claim  a  presumption  of  payment  of  the  mortgage  from  lapse  of 
time  when  this  presumption  is  repelled  by  payments  of  interest 
made  by  the  mortgagor  within  twenty  years,  or  by  his  admis- 
sion within  this  time  that  the  mortgage  was  then  subsisting.^     A 

1  See  §§  679,  680  ;  Medley  v.  Elliott,  C2  ^  Hcyer  v.  Priiyn,  7  Paige  (N.  Y.),465  ; 

111.  5.32;   Wrightt;   Lantjley,  30  ill.  .381  ;  IIu;;lies  v.  Edwards,  9  Wheat.  489.     Mr. 

Hayan  v.  I'arsoiia,  07  111.  170.  Justice  Washington  upon  this  point  said  : 

«  See  §  744;  llarricigton  v.  Slade,  22  "It  is  insisted  that,  although  these  ac- 
Barb.  (N.  Y.)  161  ;  Schmucker  v.  iSibert,  knowledgrnenta  may  be  sufliciciit  to  de- 
lb  Kans.  104.  prive   the  mortgagor  of  a   right  to  set  up 

•  Palmer  v.  Butler,  36  Iowa,  576.  the  presumption  of   payment  or  release, 

*  Medley  V.  Elliott,  62  HI.  532  ;  Water-  they  cannot  alFect  the  other  defendants, 
son  V.  Kirk  wood,  17  Kans.  9.  who  purchased  from  him  parts  of  the  mort- 

223 


§  r20;>.]       wiiKN  TiiK  lucnv  lo  kohkclosk  is  barred. 

puii'liascr  from  the  mortgiigor  staiuls  in  no  better  position  than 
the  niortpij^or  himself  as  to  gaining  title  by  possession  and  lapse 
of  time,  if  the  mortgage  be  recordeil.  Tlie  record  is  notice  of 
the  mortgage  to  a  snlvsequeiit  purchaser;  and  the  mere  fact  that 
he  has  had  actual  possession  under  his  purchase  for  the  statute 
period  of  limitation  is  no  bar  to  a  foreclosure  of  the  mortgage.^ 

But  when  a  note  and  mortgage  are  once  barred,  although  the 
mortgagor  may  by  a  subsequent  part  payment,  promise,  or  ac- 
knowledgment revive  the  mortgage,  so  far  as  it  affects  his  own 
interest  in  the  premises,  he  cannot  revive  it  as  against  his  grantee, 
or  any  other  parties  who  have  acquired  interests  in  the  premises 
prior  to  such  revivor. ^ 

In  California,  however,  it  is  the  settled  doctrine  that  the 
mortgagor  has  no  power  by  stipulation  to  prolong  the  time  of 
payment  of  his  mortgage  as  against  others  who  have  acquired  in- 
terests in  the  equity  of  redemption,  either  as  subsequent  incum- 
brancers or  purchasers  of  the  equity  of  redemption  ;  ^  as  against 
them  he  can  neither  suspend  the  running  of  the  statute  of  limi- 
tations by  an  express  waiver  nor  by  his  voluntary  act  in  absenting 
himself  from  the  state.* 

1203.  The  statute  of  limitations  does  not  discharge  the 
debt  or  extinguish  the  right,  but  only  takes  away  the  remedy. 
This  is  the  rule  even  in  California  and  other  states  where  it  is 
held,  as  already  noticed,  that  when  the  debt  is  barred  the  mort- 
gage is  also  rendered  unavailable.  The  debt  and  the  mortgage 
are  distinct  causes  of  action,  and  distinct  remedies  may  be  pur- 
sued upon  them.5  The  recent  English  Statutes  of  Limitations, 
beginning  with  that  of  William  IV.,  operate  by  their  direct  terms 
as  a  bar  to  the  right,  and  not  like  the  statute  of  James  I.,  upon 
which  the  statutes  in  this  country  are  generally  founded,  as  a  bar 
to  the  remedy    only.^     The  effect,  therefore,  of  the    new  enact- 

gaf,'ed  premises  for  a  valuable  considera-  ber  t;.  Babel,  36  Cal.  11  ;  Lent  v.  Shear, 

tion.     The  conclusive  answer  to  thisargu-  20  Cal.  361. 

ment  is,  that  they  were  purchasers  with  *  Wood  y.  Goodfellow,  43Cal.  185.   The 

notice  of  this  incumbrance."  authority  and  correctness  of  this  decision 

1  Thayer  v.  ramer,  1  McCord  (S.  C.)  is  denied  in  Watcrson  v.  Kirkwood,  17 
Ch.  395  ;  Mitchell  v.  Bogan,  11  Rich.  (S.  Kans.  9  ;  Schmucker  v.  Sibert,  18  Kans. 
C.)  686,  706;  Wright  v.  Eaves,  5  Rich.  104  ;  Clinton  County  u.  Cox,  37  Iowa,  570. 
Eq.  (S.  C.)  81.  *  Sichel  v.  Carrillo,  42  Cal.  493;  Low 

2  Schmuckeri;.  Sibert,  18  Kans.  104.  v.  Allen,  26  Cal.  141  ;  Lent  v.  Shear,  26 
»  Sichel  V.  Carrillo,  42  Cal.  493  ;  Bar-     Cal.  361. 

«  Beckford  v.  Wade,  17  Ves.  87;   In- 

224 


WHEN   THE   RIGHT    TO   FORECLOSE  IS   BARRED.       [§  1204. 

ments  in  England  is  not  simply  to  exclude  the  recovery,  but  to 
transfer  the  estate. ^  "  This,"  says  Lord  St.  Leonards,  "  is  a  great 
improvement."  ^  This  change  in  the  statute  does  not  affect  the 
questions  under  consideration,  inasmuch  as  the  recent  acts  have 
contained  special  provisions  relating  to  mortgages.  In  America 
the  statutes  of  limitations  being  generally  founded  upon  the  ear- 
lier English  statutes,  the  same  doctrine,  that  the  effect  of  the  stat- 
utes is  merely  to  take  away  the  remedy  and  not  to  extinguish  the 
debt,  which  prevailed  in  England  under  those  statutes,  prevails 
here  as  well.^ 

1204.  Though  the  debt  be  barred  the  lien  may  be  enforced. 
The  fact  that  a  debt  secured  by  a  mortgage  is  barred  by  a  stat- 
ute of  limitations  does  not  necessarily,  or  as  a  general  rule,  extin- 
guish the  mortgage  security,  or  prevent  the  maintaining  of  an 
action  to  enforce  it.^     The  statute  of  limitations  does  not  in  any 


corporated  Society  v.  Richards,  1  Dru.  & 
War.  258,  289  ;  2  B.  &  Ad.  413 ;  1  B.  & 
Aid.  93. 

1  3  &  4  Will.  4,  c.  27,  §  34;  37  &  38 
Vict.  c.  57.  See  per  Lord  St.  Leonards, 
in  Dundee  Harbor  v.  Dougall,  1  Macq. 
H.  L.  C.  321. 

2  Charley's  Real  Prop.  Acts,  3d.  ed.  p. 
26. 

*  Waltcrmire  v.  Westover,  UN.  Y.  16  ; 
Pratt  V.  Hugf^ins,  29  Barb.  277.  In  this 
case  Mr.  Justice  Ilogeboom  said:  "  It  is 
said  tliat  the  note,  from  the  lajjse  of  time, 
is  presumed  to  be  paid.  Not  altogetiier 
8o ;  for  the  law  allows  a  suit  ufjon  it,  and 
a  recovery,  unless  the  statute  of  limitations 
is  pleaded.  It  is  therefore,  at  most,  but  a 
presumption  ;  suffered  to  be  overthrown, 
it  is  true,  only  in  one  way,  and  that  is  by 
proof  of  payment  thereon,  or  recognition 
thereof,  in  the  way  pointed  out  in  the 
statute.  This,  however,  as  before  stated, 
only  acts  upon  the  remedy." 

♦  Higgins  V.  Scott,  2  B.  &.  Ad.  413; 
Spears  v.  Hartly,  3  Ksp.  81  ;  Thayer  v. 
Mann,  19  Pick.  (Mass.)  .53G  ;  Eastman  v. 
Foster,  8  Met.  (Mass.)  19  ;  Crain  v.  Paine, 
4  Cush.  (Mass.)  483  ;  Sturges  i;.  Crownin- 
shicld,  4  Wheat.  122;  Hughes  »;.  Kd wards, 
9  Wheat.  489  ;  Union  Bk.  of  Louisiana  v. 
Stafford,  12  How.  340  ;  Towusend  y.  Jumi- 

vou  II.  15 


son,  9  How.  413  ;  McElmoyle  i'.  Cohen,  13 
Pet.  312  ;  Elkiiis  v.  Edwards,  9  Ga.  326  ; 
Myer  v.  Beal,  5  Oregon,  130;  Henry  v. 
Confidence  Gold  &  Silver  M.  Co.  1  Nev. 
619;  Read  v.  Edwards,  2  Nev.  262; 
Mackie  v.  Lansing,  2  Nev.  302  ;  Cookes 
V.  Cult)ertson,  9  Nev.  199  ;  Wood  v.  Au- 
gustine, 61  Mo.  46  ;  Kellar  v.  Sinton,  14 
B.  Mon.  (Ky.)  307;  Sparks  v.  Pico,  1 
McAll.  497  ;  Birnie  v.  Main,  29  Ark.  591  ; 
Richmond  v.  Aiken,  25  Vt.  324  ;  Baldwin 
V.  Norton,  2  Conn.  163  ;  Hough  i;.  Bailey, 
32  Conn.  288;  Belknap  v.  Gleason,  11 
Conn.  160  ;  Cleveland  v.  Harrison,  15  Wis. 
670 ;  Wiswell  v.  Ba.xter,  20  Wis.  680  ; 
Whi|)ple  i;.  Barnes,  21  Wis.  327;  Knox 
V.  Galiigan,  21  Wis.  470;  Kennedy  j,-. 
Knight,  21  Wis.  340;  Ohio  Life  Ins.  & 
Trust  Co.  V.  Winn,  4  Md.  Ch.  Dec.  253  ; 
Fisher  v.  Mossman,  11  Ohio  St.  42;  Gary 
V.  May,  16  Ohio,  66;  Longworth  v.  Tay- 
lor, 2  Cin.  Supt.  Ct.  Rep.  (Ohio)  39 ;  Wil- 
kinson V.  Flowers,  37  Miss.  579  ;  Nevitt  v. 
Baciin,  32  Miss.  212;  Trotter  v.  Erwin, 
27  Miss.  772  ;  Harris  v.  Vaughn,  2  Tenn. 
Ch.  483  ;  Waltcrmire  i-.  We.stovcr,  14  N. 
Y.  20;  Pratt  v.  Huggins,  29  Barb.  277; 
Htyer  v.  Pruyn,  7  Paige  (N.  Y.),  465.  in 
which  Chancellor  Walworth  denies  the 
authority  to  the  contrary  of  Jackson  v. 
Sackett,   7   Wend.  (N.  Y.)  94;  Crookir  v. 

225 


§§  1205-1207.]       WHEN    THE   RIGHT   TO    FORECLOSE   IS   BARRED. 

way  apply  to  the  mortgage  security.  It  remains  in  force  until 
the  debt  which  it  secures  is  paid.  Payment  may  be  established 
not  only  by  direct  evidence,  but  also  by  the  presumption  of  law 
arising  from  the  lapse  of  twenty  years  from  the  time  when  the 
cause  of  action  accrued  ;  a  presumption  which  may  be  counter- 
vailed by  evidence  tending  to  show  a  contrary  presumption. ^ 

1205.  The  mortgagee  may  retain  possession  till  the  debt  is 
paid.  Although  the  right  to  proceed  by  action  on  the  mortgage 
is  barred,  still  if  the  mortgagee  can  obtain  rightful  possession  of 
the  pi-emises,  he  may  retain  them  until  the  debt  is  paid.- 

1206.  There  may  be  a  decree  for  the  deficiency  although 
the  debt  be  barred.  A  court  of  equity  is  not  precluded,  in  a 
suit  for  the  foreclosure  of  the  mortgage  given  to  secure  the  debt, 
from  rendering  a  decree  against  the  mortgagor  for  any  remainder 
of  the  debt  not  satisfied  by  the  sale.  This  is  on  the  ground  that 
such  a  decree  is  an  incident  to  the  decree  of  foreclosure,  and  that 
when  a  court  of  equity  once  takes  jurisdiction  of  a  case  it  will  re- 
tain it  for  the  purpose  of  complete  relief.^  • 

1207.  In  a  few  states  the  mortgage  lien  is  discharged 
■when  the  debt  is  barred.  The  statutes  in  these  states  limit  suits 
in  equity  in  the  same  manner  as  suits  at  law,  and  the  debt  being 
barred  by  the  statute,  the  mortgage  is  in  effect  extinguished. 
This  is  the  rule  established  in  California.  Chief  Justice  Field, 
giving  the  opinion  of  the  court,  in  addition  to  the  special  ground 
of  the  decision  founded  upon  the  peculiarity  of  the  statute  of  lim- 
itations of  that  state,  intimates  that  by  the  doctrine  of  mortgages 
established  there,  when  the  debt  is  barred  by  the  statute  of  lim- 
itation, the  mortgage  being  considered  a  mere  incident  to  it  is 
also  barred,  or  at  least  rendered  unavailable  for  any  purpose.^    In 

Holmes,  65  Me.   195;  Ball   v.  Wyeth,  8  ^  Birnie  v.  Main,  29  Ark.  591. 

Allen  (Mass.),  275.   An  agreement  by  the  *  Lord   v.   Morris,    18   Cal.  482.     Mr. 

mortgagee  to  extend  the  right  to  redeem.  Chief  Justice  Field  said  :  "  The  statute  of 

and  not  to  foreclose  for  a  specified  time,  limitations  of  this  state  differs  essentially 

does  not  extend  the  personal  liability  of  from  the  statute  of  James  I.,  and  from  the 

the  mortgagor  beyond  the  time  when  it  statutes  of  limitation  in  force  in  most  of 

would  otherwise  be  barred  by  the  statute  the  other  states.     Those  statutes  apply  in 

of  limitations.  their  terms  only  to  particular  legal  reme- 

1  Joy  V.  Adams,  26  Me.  3.33.  dies,  and  hence  courts  of  equity  are  said 

2  See  §§  715,  716 ;  Henry  v.  Confidence  not  to  be  bound  by  them  except  in  cases 
Gold  &  Silver  M.  Co.  iNev.  619;  Van  of  concurrent  jurisdiction.  In  other  eases 
Duyne  v.  Thayre,  14  Wend.  (N.  Y.)  233;  courts  of  equity  are  said  to  act  merely  by 
Phyfe  V.  Riley,  15  lb.  248.  analogy  to  the  statutes,  and  not  in  obedi- 

226 


WHEN    THE    RIGHT    TO    FORECLOSE   IS    BARRED.         [§  1207. 

fact  the  mortgage  not  being  regarded  as  a  conveyance  in  fee,  but 
only  a  contract  creating  a  lien  or  charge  upon  the  property,  comes 
within  the  same  general  limitation  as  the  note  or  other  obliga- 
tion secured  by  it.  Just  as  much  as  the  note  it  is  a  "  contract, 
obligation,  or  liability,  founded  upon  an  instrument  in  writing," 
within  the  terms  of  the  statute.  The  same  rule  has  been  estab- 
lished in  Nevada,  Texas,  and  Nebraska,  upon  the  ground  that  the 
mortgage  is  a  mere  security  for  a  debt,  and  the  mortgagor  the 
owner  of  the  land.^  In  Iowa  also  the  mortgage  is  regarded  as  a 
mere  incident  following  the  debt,  which  is  the  principal  thing,  for 
which  it  stands  security,  and  that  therefore  the  remedy  upon  the 
mortgage  is  barred  when  that  upon  the  debt  is  lost.^ 

The  statute  of  limitations  of  some  of  these  states  is  wholly  un- 
like that  of  England  and  of  those  states  which  have  adhered  to  the 
common  law  forms  of  action.  The  latter  statutes  apply  in  terms 
only  to  actions  at  law ;  and  courts  of  equity  in  general  act  merely 
in  analogy  to  the  statutes,  and  not  in  obedience  to  them.  But  in 
states  where  the  distinction  between  actions  at  law  and  suits  in 


ence  to  them.  Those  statutes  as  a  general 
thing  also  apply,  so  far  as  actions  upon 
written  contracts  not  of  record  are  con- 
cerned, only  to  actions  upon  simple  con- 
tracts, —  that  is,  contracts  not  under  seal, 
fixing  the  limitation  at  six  years,  and 
leaving  actions  upon  specialties  to  be  met 
by  the  presumption  established  by  the 
rale  of  the  common  law,  that  after  a  lapse 
of  twenty  years  the  claim  has  been  satis- 
fied. In  those  statutes  where  specialties 
are  mentioned,  as  in  the  statutes  of  Ohio 
and  Georgia,  the  limitation  is  generally 
fixed  at  either  fifteen  or  twenty  years. 
The  case  is  entirely  different  in  this  state. 
Here  the  statute  applies  equally  to  actions 
at  law  and  to  suits  in  equity.  It  is  di- 
rected to  the  subject  matter  and  not  to  the 
form  of  the  action,  or  the  forum  in  which 
the  action  is  prosecuted.  Nor  is  there  any 
distinction  in  the  limitation  prescribed  be- 
tween simple  contracts  in  writing  and 
specialties.  Thus  the  statute  requires  an 
action  'upon  any  contract,  obligation,  or 
liability,  founded  upon  an  instrument  of 
writing,'  except  a  judgment  or  decree  of 


a  court  of  a  state  or  territory,  or  of  the 
United  States,  to  be  commenced  within 
four  years  after  the  cause  of  action  has 

accrued We  do  not  question  the 

correctness  of  the  general  doctrine  pre- 
vailing in  the  courts  of  several  of  the 
states,  that  a  mortgage  remains  in  force 
until  the  debt,  for  the  security  of  which  it 
is  given,  is  paid.  We  only  hold  that  the 
doctrine  has  no  application  under  the  stat- 
ute of  limitations  of  this  state."  See,  also, 
Low  V.  Allen,  26  Cal.  141 ;  Lent  v.  Mor- 
rill, 25  Cal.  492. 

1  Duty  V.  Graham,  12  Tex.  427  ;  Ross 
i;.  Mitchell,  28  Tex.  150;  Kyger  y.  Ryley, 
2  Neb.  20 ;  Peters  v.  Dunnells,  5  Neb.  460 ; 
Hurley  v.  Estes,  6  Neb.  386 ;  Henry  v. 
Confidence,  &c.  Co.  1  Nev.  619. 

2  Gower  v.  Winchester,  33  Iowa,  303 ; 
Burton  v.  Hintrager,  18  Iowa,  348  ;  Sang- 
ster  V.  Love,  1 1  Iowa,  580 ;  Crow  v. 
Vance,  4  Iowa,  434  ;  Green  v.  Turner,  38 
Iowa,  112;  Newman  v.  De  Lorimer,  19 
Iowa,  244 ;  Clinton  County  v.  Cox,  37 
Iowa,  570. 

227 


§  1:107. ]      wiiKN  Tin:  right  to  forkclose  is  harrkd. 

equity  is  done  away  with,  tlio  statutes  of  limitation  apply  equally 
to  both  classes  of  eases  ;  and  therefore  a  suit  to  foreclose  a  mort- 
gage must  he  brought  witiiiu  the  time  limited  for  an  action  upon 
the  note  secureil  by  it.^  A  purchaser  of  the  equity  of  redemp- 
tion may  interpose  this  defence  to  the  foreclosure  of  a  mortgage, 
•whether  the  mortgagor  does  or  not.^ 

In  equity  a  mortgage  is  always  regarded  merely  as  a  security 
for  the  debt.  The  dt'bt  is  the  principal  thing,  and  the  mortgage 
an  incident  only.  But  the  note  or  bond  which  accompanies  the 
mortgage  may  also  be  regarded  as  an  incident  or  evidence  of  the 
debt,  especially  if  the  mortgage  itself  contains  a  covenant  for  the 
payment  of  it."^  The  doctrine  that  there  can  be  no  remedy  upon 
the  mortgage  after  the  remedy  upon  the  note  is  baired  cannot 
properly  rest  upon  this  foundation.  If  not  based  upon  the  express 
terms  of  the  statute  of  limitations,  it  must  rest  upon  the  statu- 
tory declaration  made  in  a  few  states,  that  a  mortgage  is  not  to 
be  deemed  a  conveyance  of  the  land,  but  only  a  contract  lien  upon 
it.*  Yet  in  Illinois  when  the  debt  is  barred  the  remedy  on  the 
mortgage  is  barred  also  ;  and  the  decisions  are  placed  upon  the 
ground  that  the  debt  is  the  principal  thing  ;  that  an  assignment 
of  this  carries  with  it  the  mortgage ;  that  the  release  of  it  releases 
the  mortgage  ;  and  that  by  analogy  there  is  no  reason  why  a  bar 
to  a  recovery  on  the  note  should  not  produce  the  same  effect  on 
the  mortgage.  It  is  conceded,  however,  that  when  the  mortgage 
itself  contains  a  covenant  for  the  payment  of  the  debt,  this  being 
an  instrument  under  seal,  although  a  mortgage  note  not  under 
seal  might  be  barred  under  a  shorter  period  of  limitation  than 
that  required  to  bar  a  sealed  instrument,  the  remedy  upon  the 

1  Chick    V.    Willetts,    2    Kans.    384  ;     Here  it  confers  no  right  to  the  possession 
Schmucker  v.  Sibert,  18  Kans.  104.  of  the  premises  either  l)efore  or  after  de- 

2  Schmucker  i;.  Sibert,  supra.  fault,  and,  of  course,  furnishes  no  support 
8  Pratt  V.  Iluggins,  29  Barb.  (N.  Y.)  277.  to  an  action  of  ejectment,  or  to  a  writ  of 
*  Lord  V.  Morris,  18  Cai.  482.       Chief     entry  for  their  recovery.      The  language 

Justice  Field,  said  :  "  Here  a  mortgage  is  of  the  statute  is  express  that  it  shall  not 

regarded  as  between  the  parties,  as  well  as  be   deemed    a  conveyance,   whatever   its 

with  reference  to  the  rights  of  the  mort-  terms,  so  as  to  enable  the  owner  of  the 

gagor  in  his  dealings  with  third  persons,  mortgage  to  recover  possession  without  a 

as  a  mere    security,  creating    a   lien   or  foreclosure  and  sale."     And  see  Jackson 

charge  upon  the   profierty,  and  not  as  a  v.  Lodge,  36  Cal.  28;  Carpentier  v.  Bren- 

conveyance  vesting  any  estate  in  the  prem-  ham,  40  Cal.  221 ;  Harp  v.   Calahan,  46 

ises,  either  before  or  after  condition  broken.  Cal.  222. 

228 


WHEN   THE   RIGHT    TO   FORECLOSE   IS    BARRED.       [§§  1208,  1209. 

mortgage  would  be  barred  only  by  the  lapse  of  tbe  longer  period 
required  to  bar  a  recovery  on  sealed  instruments.^ 

On  the  other  hand,  so  long  as  the  statute  does  not  bar  a  recov- 
ery on  the  note,  it  does  not  bar  a  foreclosure  of  the  mortgage.^ 
If  by  the  non-residence  of  the  mortgagor  time  be  deducted  from 
the  period  of  limitation,  so  that  an  action  on  the  debt  be  not 
barred,  neither  is  an  action  to  foreclose  the  mortgage  barred.^ 

1208.  It  is  immaterial  whether  the  adverse  possession  be 
that  of  one  person  for  the  whole  period,  or  that  of  several 
persons  holding  in  succession  each  for  a  part  of  the  period,  pro- 
vided the  possession  be  uninterrupted  and  adverse  ;  but  if  a  period 
of  time  intervenes  when  the  possession  is  not  adverse,  the  statute 
only  runs  from  the  commencement  of  the  last  adverse  possession.* 

Moreover,  as  against  the  mortgagee  under  the  English  statute,^ 
the  adverse  possession  must  have  commenced  under  the  mortgage, 
so  that  an  occupation  previous  to  the  making  of  the  mortgage  can- 
not be  added  to  an  occupation  afterwards  to  make  up  the  period 
of  twenty  years  ;  therefore  it  may  happen  that  while  the  mort- 
gagor is  barred  from  recovery  the  mortgagee  is  not.^  The  pay- 
ment of  interest  by  the  mortgagor  may  prevent  the  running  of 
the  statute  against  the  mortgagee,  while  the  person  in  possession 
under  the  mortgagor  holding  for  more  than  twenty  years  without 
paying  rent  or  acknowledgment  of  any  kind  has  acquired  title 
against  him. 

1209.  An  action  to  enforce  an  equitable  lien  for  purchase 
money  is  on  the  contrary  barred  when  the  debt  itself  is  barred.' 

1  Harris  v.  Mills,  28  111.44;  Hagan  v.  equitable  lien  for  the  purchase  price  of 
Parsons,  67  111.  170;  Brown  v.  Dcvine,  61  land  given  by  law,  and  also  between  an 
111.  260  ;  Pollock  v.  Matson.  41  111.  517.         action  to  foreclose  a  mortgage  and  one  to 

2  Schmuckcr  v.  Sibert,  18  Kans.  104.         enforce  a  lien.     The  action  to  foreclose  a 
'  Clinton  County  v.  Cox,  .17  Iowa,  570;     mortgage  is  brought  upon  an  instrument 

Brown  r.  Rackliold  (Iowa,  Oct.  1878),  7  under  seal,  which  acknowledges  the  cx- 

Ccut.  L.  J.  416.  istcnce  of  the   debt   to  secure  which  the 

*  Emory  y.  Kcigham  (111.  1878),  11  Chi-  mortgage  i.s  given  ;  and,  by  reason  of  the 

cago   L.  N.  .32;    Benson  v.   Stewart,  30  seal,  the  debt  is  not  presumed  to  have  been 

Miss.  49.  paid  until  the  expiration  of  twenty  years 

6  7  Wm.  4  &  I  Vict.  c.  2R.  after  it  becomes  due  and  payable.     The 

«  Palmer  v.  Eyre,   17   Q.  B.  .166  ;  Bad-  six  years'  limitation  has  no  ai)])lication  to 

delcy   V.   Massey,   17  Q.  B.  37.1;    Ford  v.  a  mortgage.     In  fact,  all  in.strumcnts  tin- 

Agcr,  2  Hurl.  &  C.  279  ;  8  L.  T.  N.  S.  546.  der  seal  are  expressly  excepted  therefrom." 

'  Bor.st   V.  Corey,  15  N.  Y.  505.     Mr.  To  the  same  effect  see  Trotter  v.   Krwin, 

.hmtirc   Bowen  said:    "There  is  a  mate-  27  Miss.  772;    Liltlejohn  v.  Gordon,  32 

rial  distinction  between  a  mortgage  and  the  Miss.  235. 

229 


§§  1-210,  V211.]       NVllKN    TIIF,    inC.IIT   TO    FORECLOSK    IS    BARRED. 

Such  a  lieu  iirisos  by  operation  of  law  ami  is  not  created  or  evi- 
denced by  deed.  It  must  coexist  with  the  debt  and  cannot  survive 
that. 

1210.  The  statute  runs  in  favor  of  the  mortgagor  from 
the  time  the  mortgagee's  right  of  action  accrues.  Generally 
the  statute  as  applied  to  a  mortgage  begins  to  run  against  the 
holder  of  it  in  favor  of  the  mortgagor  in  possession  from  the  time 
the  condition  of  the  mortgage  is  broken,  so  that  a  right  of  action 
upon  it  accrues.^  Unless  the  time  commences  to  run  from  the 
time  when  the  right  to  foreclose  accrues,  it  could  have  no  com- 
mencement except  in  rare  instances,  and  the  right  to  foreclose 
might  be  asserted  against  the  continued  possession  of  the  mort- 
gagor at  the  most  remote  period.  From  that  time  the  mortgagor 
holds  subject  to  the  right  of  the  mortgagee  to  foreclose,  and  if  the 
mortgagee  sleeps  upon  that  right,  if  any  lapse  of  time  is  to  bar 
his  claim  upon  the  presumption  that  it  has  been  paid,  the  period 
must  commence  from  the  accruing  of  his  right  of  action. 

A  suit  of  foreclosure  being  a  proceeding  in  rem,  the  absence  of 
the  mortgagor  from  the  state  does  not  prevent  the  running  of  the 
statute  on  the  mortgagee's  right  to  foreclose.  His  absence  does 
not  interfere  with  the  prosecution  of  his  remedy,  or  render  it  less 
effectual.^ 

1211.  The  possession  of  the  mortgagor  or  his  grantees  is 
presumed  to  be  subordinate  to  the  mortgage,  until  it  is  shown 
by  some  act  that  such  possession  is  inconsistent  with  the  rights  of 
the  mortgagee.  A  mortgage  is  not  barred  until  the  statutory  bar 
of  the  debt  is  complete.  The  possession  must  be  hostile  in  its 
inception,  and  must  continue  hostile,  actual,  visible,  and  distinct.^ 
So  long  as  the  relation  of  mortgagor  and  mortgagee  continues, 
the  statute  cannot  commence  to  run  in  favor  of  the  mortgagor  or 
his  heirs.  The  recovery  of  a  judgment  on  a cire  facias  to  foreclose 
a  mortgage  does  not  extinguish  the  relation  ;  until  the  time  of  re- 
demption allowed  by  law  after  a  foreclosure  sale  has  expired,  so 
that  the  purchaser  is  entitled  to  a  deed  of  the  premises,  the  stat- 
ute does  not  begin  to  run.* 

1  Nevitt  V.  Bacon,  32  Miss.  212;  Ben-  v.  Jackson,  27  Pa.  St.  504;  Parker  v. 
son  V.  Stewart,  .30  Miss.  49  ;  Wilkinson  v.     Banks,  79  N.  C.  480. 

Flowers,  37  Mi^s.  579.  *  Rockwell    v.    Servant,    63    111.    424  ; 

2  Anderson  v.  Baxter,  4  Oreg.  105.  Jamison  v.  Perry,  38  Iowa,  14. 
2  Medley  v.  Elliott,  62  111.  532  ;  Martin 

230 


WHEN   THE   RIGHT    TO    FORECLOSE   IS   BARRED.       [§§  1212,  1213. 

The  possession  of  the  mortgagor  being  in  the  beginning  con- 
sistent with  the  right  of  the  mortgagee,  it  becomes  important  to 
determine  when  it  becomes  adverse,  and  such  that  the  limitation 
begins  to  run  in  the  mortgagor's  favor.  Is  it  adverse  from  the 
time  tliat  he  ceases  to  pay  interest  upon  the  mortgage  debt  ?  ''  It 
seems  to  me,"  says  Lord  Denman,  Chief  Justice,  '-'  that  it  is  not 
so.  The  possession  of  the  mortgagor  is  consistent  with  the  right 
of  the  mortgagee ;  and,  therefore,  the  possession  is  not  adverse  at 
any  assignable  period,  unless  the  jury,  from  renunciation  by  the 
mortgagor,  or  some  other  circumstances,  are  induced  to  find  the 
fact  of  adverse  possession."  ^ 

It  is  not  material  to  make  out  that  the  mortgagor's  possession 
from  that  time  is  actually  adverse  to  the  right  of  the  mortgagee, 
if  it  is  from  that  time  without  recognition  of  it.  It  is  deemed  ad- 
verse in  law  after  breach  of  the  condition.^ 

The  period  of  limitation  runs  of  course  from  the  time  when 
the  mortgagee's  right  of  action  accrues,  and  not  from  the  date  or 
delivery  of  the  mortgage.^  When  a  mortgage  is  payable  in  in- 
stalments falling  due  at  different  times,  the  mortgagor's  posses- 
sion is  not  adverse  until  the  maturity  of  the  last  instalment.  The 
condition  of  the  mortgage  in  such  case  is  a  continuing  one,  and 
the  mortgagee  may  await  the  maturity  of  the  last  note  before  an 
entry  and  sale,  or  before  treating  the  non-payment  of  the  earlier 
instalments  as  a  forfeiture  of  the  mortgage.* 

1212.  If,  however,  the  mortgagor  has  not  been  in  posses- 
sion of  the  mortgaged  land,  the  debt  being  unpaid,  the  right  to 
foreclose  is  not  barred  by  the  lapse  of  the  statutory  period  of  lim- 
itation. This  condition  of  things  frequently  happens  when  the 
mortgaged  lands  are  wild  and  unimproved.  Tlie  lapse  of  thirty 
years  has  V)e('n  held  to  bo  no  bar  to  a  foreclosure  in  such  a  case.'^ 

1213.  If  the  mortgage  be  one  of  indemnity  to  a  surety,  his 
right  of  action  docs  not  accrue  until  he  has  paid  the  debt  which 

»  Jones  V.  Willinms,  5  Ail.  &  El.  291.  case  Lord  Tcnteidcn  said  that  liis  sitnntion 
Mr.  JiiKtice  Patterson  in  this  case  said:  -was  of  a  peculiar  character.  But  it  is 
"  One  iH  much  at  a  loss  as  to  the  j»roper  clear  that  his  possession  is,  at  all  events, 
terms  in  which  to  describe  the  relation  of  not  adverse  to  the  title  of  the  niorf^'ii^ce." 
mort^BKor  in  possession  and  mortj,'Hf,"e-  '^  Wilkinson  y.  Flowers,  ;i7  Miss.  .-iTO.^ 
In  Partridge  v.  Bere,  5  B.  &  Aid.  604,  »  Prouty  v.  Eaton,  41  Barl..  (N.  Y.) 
such   mortgagor  is  held  to  Iw  tenant  to     409. 

the  mortgagee  ;  sometimes  he  is  saiil  to  he         *  Parker  v.  Banks,  70  N.  C  480. 
the  bailiff  of  the  mortgagee  ;  and  in  a  late        *  Chouteau  v.  Burlando,  20  Me.  482. 

231 


§  1214.]         WIIKN    THK    KIGlir   TO    FORECLOSE   IS   BARRKU. 

tlio  nuiit!4:i«;o  was  given  to  sceuro  liim  against,  and  therefore  the 
tinio  of  liinitation  for  his  bringing  an  action  to  foreclose  the  mort- 
<Mni>  t'dmincnci's  to  run  only  from  that  time.^ 

1214.  The  same  rule  applies  in  case  of  a  debt  barred  by  a 
special  statute  of  limitations.  Thus,  the  rule  applies  to  a  par- 
ticular statute  limiting  the  time  within  which  claims  against  the 
estate  of  a  deceased  person  must  be  presented  or  sued.  The  debt 
is  not  paid  or  satisfied  by  failure  to  present  or  sue  it  within  the 
time  limitt'd  ;  and  the  remedy  on  the  mortgage  may  still  be  pur- 
sued.- 


1  M'Lcan  r.  Kagsdale,  31  Miss.  701. 

2  Sichel  V.  Ciirrillo,  42  Cal.  493.  In 
this  case  the  mortgage  was  given  to  se- 
cure the  note  of  another  person,  so  that 
there  was  no  personal  liability  of  the  mort- 
gagor. When  the  maker  of  the  note  and 
mortgage  are  the  same  person,  the  court 
sav  it  may  be  that  it  would  be  necessary 
to  present  the  claim  to  prevent  a  bar,  and 
keep  the  remedy  alive  as  to  the  debt,  in 
order  to  uphold  the  remedy  on  tlie  mort- 
gage.     This,  however,  would   be  on  ac- 

232 


count  of  the  exceptional  character  of  the 
statutes  of  limitation  in  that  state,  and  of 
the  exceptional  views  taken  there  of  the 
force  and  effect  of  a  mortgage.  The  rule 
stated  in  the  text  is  of  general  ajjplication, 
and  without  any  such  qualification  else- 
where. In  Texas,  under  special  require- 
ment of  statute,  the  debt  must  be  pre- 
sented against  the  estate  of  the  deceased 
before  any  action  can  be  had  on  the  mort- 
gage. Graham  v.  Vining,  1  Tex.  639  ; 
Duty  j;.  Graham,  12  Tex.  427. 


CHAPTER   XXVII. 


REMEDIES  FOR  ENFORCING  A  MORTGAGE. 


T.   Are  concurrent,  1215-1219. 
II.   Personal   remedy  before  foreclosure, 

1220-1226. 
III.   Personal    remedy  after   foreclosure, 

1227,  1228. 


IV.    Sale  of  mortgaged  premises  on  ex- 
ecution for  mortgage   debt,  1229, 
1230. 
V.   Remedy  as  affected  by  bankruptcy, 
1231-1236. 


1.  Are   Concurrent. 

1215.  The  mortgagee  may  pTirsue  all  his  remedies  conctir- 
rently  or  successively.^  He  may  at  the  same  time  sue  the  mort- 
gagor in  an  action  at  law  upon  the  note,  or  other  personal  debt ; 
may  maintain  a  writ  of  entry  or  ejectment  to  recover  possession 
of  the  land  ;  and  a  bill  in  equity  to  foreclose  the  mortgage.  Re- 
covery of  judgment  upon  the  note  does  not,  without  payment, 
take  it  out  of  the  mortgage,  or  bar  proceedings  to  foreclose.  The 
cause  of  action  on  the  debt  is  personal  against  the  person  and 
property  of  the  debtor  ;  and  the  proceedings  to  foreclose  are  to 
enforce  the  lien  upon  the  debtor's  real  estate  which  he  has  charged 
with  the  payment  of  the  debt. 

The  mortgage  and  the  evidence  of  debt  are  usually  separate 
instruments  and  afford  independent  remedies.  The  mortgage  may 
be  wholly  discharged  or  released  without  affecting  the  personal 


Garforth  v.  Bradley,  2  Ves.  Sen.  678 ; 
Torrey  v.  Cook,  116  Mass.  163;  Ely  v. 
Ely,  6  Gray  (Mass.),  439  ;  Draper  d.  .Mann, 
117  Mass.  439;  Huglics  v.  Eilwards,  9 
Wheat.  489  ;  Brown  v.  Stewart,  1  Md.  Ch. 
87  ;  Wilhclm  v.  Lee,  2  Md.  Ch.  322  ;  Pratt 
V.  lIiiKuins,  29  Barb.  (N.  Y.)  277  ;  Jack- 
son I'.  Hull,  10  Johns.  N.  Y.  481  ;  Cross 
V.  Burns,  17  Ind.  441  ;  Jones  v.  Conde,  6 
Johns.  (N.  Y.)  Ch.  77  ;  Very  v.  Watkins, 
18  Ark.  .546;  Knetzcr  v.  Bradstrcet,  1 
Greene  (Iowa),  382;  Smith  v.  Shuler,  12 
S.  &  K.  (Pa.)  240;  Coit  v.  Fitch,  Kirby 
(Conn.),   2.'>4 ;  Wilkinson  i.   Flowers,  37 


Miss.  579  ;  Wiswcll  v.  Baxter,  20  Wis. 
680;  Whipple?;.  Barnes,  21  Wis.  327; 
Knox  V.  Galligan,  lb.  470  ;  Banta  v.  Wood, 
32  Iowa,  469 ;  Brown  v.  Cascaden,  43 
Iowa,  103  ;  Micou  v.  Ashurst,  55  Ala.  607; 
Stephens  i'.  Greene  County  Iron  Co.  11 
Iluisk.  (Tenn.)  71.  In  the  present  state  of 
the  law,  when  there  is  no  prohibition  by 
statute,  it  is  competent  for  the  mortgagee 
to  pursue  three  remedies  at  the  same  time. 
Mr.  Justice  Swayne,  in  Gilman  v.  111.  & 
Miss.  Tel.  Co.  91  U.  S.  603  ;  Morrison  v. 
Buckncr,  1  Hemp.  442. 

233 


§  l^lf).]  RKMKDIES    KOK    KNTOUCINC.    A    MORTGAGK. 

li;il)ilitv  of  the  mortgagor  ;  :iiul  on  tlu>  othrr  hand,  (Ik^  personal 
liability  may  bo  li'rminatoil  by  the  statnte  of  limitations,  or  by  a 
ilisohargo  in  bankruptcy  or  insolvency,  without  extinguishing  the 
mortgage.'  So  long  ago  as  the  case  of  Bnrnell  v.  Martin^^  Lord 
Mansfield  declared  "  that  it  had  been  settled  over  and  over  again 
that  a  person  in  such  case  is  at  liberty  to  pursue  all  his  remedies 
at  once."  He  may  pursue  his  legal  and  equitable  remedies  at  the 
same  time  ;  he  may  foreclose,  take  possession  of  the  estate,  or  bring 
ejectment  for  it,  and  sue  the  mortgagor  on  his  covenant  or  other 
obligati(Mi  for  the  debt.^  When  not  restrained  from  entering  he 
may  maintain  ejectment  without  previous  demand  of  payment,  or 
entry,  or  notice  to  quit.*  After  a  mortgage  is  due  the  mortgagee 
may  at  any  time  without  notice  or  demand  of  payment  take  pro- 
ceedings to  collect  the  debt  or  to  realize  his  security.^ 

When  a  mortgage  is  given  by  a  corporation  to  secure  a  large 
loan  it  is  usual  to  divide  the  mortgage  debt  into  numerous  bonds 
or  notes  which  are  payable  to  bearer  and  are  transferred  by  de- 
livery; and  are  widely  distributed  while  the  mortgaged  property 
is  held  by  trustees  for  the  protection  of  all  the  numerous  holders. 
In  such  case,  while  the  individual  bondholders  may  obtain  judg- 
ments for  their  several  bonds,  tliey  cannot  levy  execution  upon 
the  mortgaged  property  and  acquire  a  preference  over  other  bond- 
holders secured  by  the  same  mortgage.^  The  mortgage  security 
must  usually  be  enforced  by  the  trustees  of  the  mortgage  title  ; 
though  in  certain  contingencies,  as  when  the  trustees  neglect  or 
refuse  to  perform  the  trust,  individual  bondholders  may  institute 
proceedings  to  foreclose  the  mortgage.  But  they  must  do  this  in 
behalf  of  all  the  bondholders. 

1216.  This  rule  is  an  exception  to  the  general  principle 
that  a  debtor  shall  not  be  harassed  by  a  multiplicity  of  suits  for  the 
same  debt  at  the  same  time.  Lord  Redesdale  "^  states  the  general 
rule  to  be,  tiiat  where  a  party  is  suing  in  equity  he  shall  not  be 
allowed  to  sue  at  law  for  the  same  debt.  "  But  the  case  of  a 
•  mortgagee  is  an  exception  to  this  rule  ;  he  has  a  right  to  proceed 
on  his  mortgage  in  equity  and  on  his  bond  at  law  at  the  same 

1  Topli3  V.  Baker,  2  Cox,  123  ;  Thayer  ^  Letts  v.  Ilutchins,  L.  R.  13  Eq.  176; 
V.Mann,  19  rick.  (Mass.)  535.  Harris  v.  Mulock,   9  How.    (N.  Y.)   Pr. 

2  2  Douf,'.  401.  402. 

*  Cockfll  V.  Bacon,  16  Beav.  158.  "  Jones  on  Railroad  Securities,  §§  434, 

*  New  Haven  Sav.  Bank  v.  McPartlan,     477. 

40  Conn.  91.  ^  j,,  Sclioole  v.  Sail,  1  Sch.  &  Lef.  176. 

234 


ARE   CONCURRENT.  [§§  1217,  1218. 

time."  There  may  be  some  special  equity  in  favor  of  the  mort- 
gagor which  will  make  an  exception  to  this  rule  ;  ^  and  in  some 
states  this  right  of  concurrent  action  has  been  restricted  by  stat- 
ute.2 

1217.  A  mortgagee  may  maintain  a  creditor's  bill  in  equity 
to  reach  and  apply  in  payment  of  his  debt  property  of  the  debtor 
which  cannot  be  come  at  to  be  attached  or  taken  on  execution. 
This  remedy  is  in  the  nature  of  an  attachment  by  an  equitable 
trustee  process  ;  and  there  is  no  reason  why  it  should  not  be  pur- 
sued just  as  the  mortgagee  might  make  direct  attachment  of  any 
property  other  than  the  mortgaged  estate.^ 

1218.  The  right  to  foreclose  is  not  waived  or  impaired  by 
the  recovery  of  a  judgment  at  law  upon  the  mortgage  debt.* 
The  causes  of  action  are  not  legally  the  same  ;  one  is  a  personal, 
the  other  a  real  action.  Obtaining  a  judgment  on  the  note  does 
not  take  it  out  of  the  mortgage ;  ^  and  while  it  remains  unsatis- 
fied the  conditional  judgment  in  the  suit  to  foreclose  must  be  en- 
tered the  same  as  if  the  note  had  not  been  the  subject  of  a  suit. 
Nor  does  a  provision  in  the  mortgage,  that  in  case  of  a  breach  of 
the  condition  the  mortgagee  may  enter  and  receive  the  rents  and 
profits  for  his  indemnity,  prevent  a  foreclosure  and  sale  as  in  other 
cases.^ 

The  fact  that  the  mortgagee  has  proved  his  claim  against  the 
estate  of  his  deceased  mortgagor  and  obtained  an  order  for  its 
payment  does  not  constitute  a  bar  to  a  proceeding  to  foreclose 
the  mortgage." 

On  the  other  hand,  it  is  sometimes  provided  tliat  the  mortgage 
shall  not  be  foreclosed  until  the  personal  remedy  is  first  had.  A 
stipulation  in  such  a  mortgage,  that  the  property  of  the  makers 
of  the  note  should  be  exhausted  before  foreclosure,  is  complied 
with  when  a  judgment  has  been  obtained  on  the  note  and  the  ex- 
ecution has  been  returned  unsatisfied  for  want  of  property.  The 
creditor  is  not  bound   to  try  to  collect  the  judgment  out  of  the 

1  Booth  V.  Booth,  2  Atk.  .'U3  ;  Newbold  Mo.  249;  Karnes  v.  Lloyd,  52  111.  113; 
V.  Newbold,  1  Del.  Ch.  310.  Vunsunt  v.  Allinon,  23  111.  33  ;    Bantu  v. 

2  Sec  §  1223.  Wood,  32  Iowa,  409. 
»  Tucker  v.  McDonuM,  105  Mass.  423;         ''  See  §  936. 

Palmer  v.  Foote,  7  I'liiKC  (.V.  Y.),  437.  «  llurkius  i;.  Forsyth,   11    Lci;;h   (Vu.), 

♦  Duck  V.  Wilson,  19  Ind.  190;  O'Leary  294. 

V.  Snediker,   16  Ind.  404  ;  Wahl  v.  Phil-  ^  Simms  v.  llichnrdson,  32  Ark.  297. 
lip«,  12  Iowa,  81  ;    Thornton  v.  Pigg,  24 

235 


§§  I'JIO,  I'J-JO.]       RKMKDIES    FOU    KNFORCING    A    MORTGAGK. 

equities  o[  tlie   jiul<;iiuMit  debtors  in  the  mortgaged  premises,  or 
out  of  t)tlier  jM'operty,  when  these  are  wholly  insufficient.^ 

1219.  Subsequent  payment  will  discharge  both  the  judgment 
against  the  piMson  and  that  against  the  property.'^  Satisfaction 
of  the  dtbt  in  whatever  way  it  be  made,  whether  it  be  upon  a 
judgment  at  law,  or  upon  a  decree  in  equity  made  in  respect  of 
the  same  mortgage,  satisfies  and  discharges  all  the  proceedings 
taken  to  enforce  the  debt  either  against  the  person  or  the  prop- 
erty.^ 

Although  as  a  general  rule  a  mortgagor  upon  payment  of  the 
mortgage  is  entitled  to  have  the  property  restored  or  released  to 
him,  yet  this  right  cannot  be  claimed  after  a  sale  under  a  power 
when  suit  is  brought  upon  the  mortgage  debt  for  a  balance  re- 
maining unsatisfied  by  the  sale.* 

2.  Personal  Remedy  before  Foreclosure. 

1220.  The  holder  of  the  note  and  mortgage  is  not  required 
first  to  foreclose  the  mortgage,  but  may  bring  his  action  on  the 
note  alone.  The  fact  that  the  mortgagor  has  sold  the  mortgaged 
premises  to  a  third  person  subject  to  the  mortgage  debt  does  not 
change  the  right  of  the  holder  to  pursue  the  personal  remedy. 
The  debt  is  the  primary  obligation  between  the  parties,  and  the 
note  is  the  primary  evidence  of  that  debt.^  The  giving  of  a 
mortgage  or  other  security  for  a  subsisting  debt  does  not  extin- 
guish or  merge  the  personal  liability.  But  of  course  it  is  compe- 
tent for  the  parties  to  agree  that  the  mortgagee  shall  look  only  to 
the  security  for  his  reimbursement,  and  that  the  debtor  shall  be 
absolved  from  all  personal  obligation.^  Where  a  mortgage  is 
made  to  secure  a  note,  but  contains  a  stipulation  that  "  general 
execution  shall  not  issue  herein,"  the  remedy  is  limited  to  the 
property  alone.^ 

Even  a  surety  of  a  note  of  his  principal  secured  by  a  mort- 
gage of  land  of  the  principal  has  no  right  to  demand  that  the 
holder  of  the  note  shall  first  exhaust  the  security  before  maintain- 
ing an  action  on  the  note  against  the  surety.^ 

1  Riblet  V.  Davis,  24  Ohio  St.  114.  A  plea  to  this  effect  was  struck  out  as  bad 

2  Ely  V.  Ely,  6  Gray  (Mass.),  439.     See     and  dishonest. 

§904.  ''  Lichty  v.  McMartin,  11    Kans.  565  ; 

*  Fairman  v.  Farmer,  4  Ind.  436.  Vansant  v.  Allrnon,  23  111.  30. 

*  Kudge  V.  Kichens,  L.  R.  8  C.  P.  358.         «  Ball  v.  Wyuth,  99  Mass.  338. 

■^  Kennion  v.  Kelsey,  10  Iowa,  443. 
236  8  Allen  V.  Woodward,  125  Mass.  400. 


PERSONAL   REMEDY   BEFORE   FORECLOSURE.       [§§  1221-1223. 

That  the  equity  of  redemption  has  been  sold  on  execution  for 
other  indebtedness  does  not  deprive  the  mortgagee  of  his  right 
to  sue  the  mortgagor  on  the  mortgage  note.  The  purchaser  at 
such  execution  sale  does  not  become  liable  to  the  mortgagor  for 
the  mortgage  debt,  and  the  mortgagor  is  not  by  such  purchase  re- 
leased from  it  either  at  law  or  in  equity.^ 

The  general  rule  is  also  in  some  states  changed  by  statute. 
Thus,  in  Minnesota  and  Nevada,  an  action  cannot  be  maintained 
on  a  promissory  note  secured  by  a  mortgage  on  real  estate,  until 
the  mortgaged  security  is  exhausted.^  If,  in  consequence  of  the 
illegality  of  the  sale,  the  property  brings  less  than  its  value,  this 
is  a  defence  to  an  action  for  the  balance  due  on  the  note.^ 

1221.  The  holder  of  the  mortgage  need  not  wait  to  ascer- 
tain the  amount  of  the  deficiency  by  a  sale  under  the  power, 
or  even  that  there  will  be  a  deticiency,  before  proceeding  to  en- 
force the  personal  liability  of  the  mortgagor  on  the  note  or  other 
debt.  He  may  in  the  first  place  sue  on  the  note,  or  any  instal- 
ment of  it,  if  due,  and  attach  other  property  of  the  mortgagor,  and 
afterwards  proceed  to  sell  under  the  power  contained  in  the  mort- 
gage, if  the  debt  be  not  satisfied.  Of  course  this  right  must  yield 
to  a  special  agreement  of  the  parties  that  the  personal  liability 
shall  not  be  enforced  until  the  remedy  upon  the  property  is  first 
exhausted. 

1222.  Neither  is  the  pendency  of  a  suit  to  foreclose  the 
mortgage  any  bar  to  an  action  at  law  to  recover  the  debt  se- 
cured by  it.*  If  a  bill  of  foreclosure  be  dismissed  on  the  merits, 
this  is  no  bar  to  a  suit  on  the  note,  for  the  debt  may  be  due,  al- 
though the  land  is  not  bound.^  Neither  is  a  judgment  against  the 
validity  of  the  mortgage  necessarily  a  bar  to  a  suit  upon  the  note.*^ 
The  mortgage  debt  may  be  valid,  although  the  mortgage  itself  be 
illegal  and  void.^  Tiie  suit  at  law  may  be  before,  at  the  time  of, 
or  after  the  suit  in  equity.^ 

1223.  By  statute  in  some  states  no  proceedings  at  law  can 
be  had  for  the  recovery  of   the  debt  after  the  filing  of  a  bill  for 

1  Uouers  V.  Meyers,  GR  111.  92.  ^  Longworth  v.  Flntrfr,  10  Oliio,  300. 

*  Johnson    v.    Lewi.s,    13    Minn.    304  ;         •*  Liuuler  v.  Arno,  6.5  Mo.  26. 

Weil  i;.  Howard,  4  Ncv.  384;    Ilyinnn  v.  ">  Slmvcr  v.  Ikiir  Hivcr,  &c.  Co.  10  Cnl. 

Kelly,  1  Nev.  179.     And  sec  §  1223.  390. 

»  I^iwcll  )).  North,  4   Minn.  32.  '  Downing  v.  ralmatcer,  1    Mon.   (Ky.) 

*  CopjHjrthwnit   v.    Duinmcr,    18   N.  J.  68. 


L.  (3  Hiirr.)  258. 


237 


§  1223.]  HI  MKOIKS    KOK    KNFOHCING    A    MORTGACJK. 

foivi'losuiv  iinU'ss  autlioii/.'.Hl  hv  the  court  ;  iv\u\  if  proceedings  at 
l;i\v  arc  aln'iuly  pcmling  when  the  bill  is  filed,  although  they  need 
not  bo  actually  discontinued  they  must  be  suspended,  unless  the 
authority  of  the  court  be  obtained  to  prosecute  the  suit.^  This 
provision  liuiits  the  prosecution  of  a  suit  at  law  not  only  against 
the  mortgagor,  but  against  one  wlio  has  assumed  the  mortgage 
debt.-  Under  the  statutes  of  these  states,  an  equitable  suit  for 
foreclosure  alTords  couiiilcte  remedy  against  all  persons  liable  for 
the  debt,  and  at  the  same  time  for  the  recovery  of  a  judgment  for 
any  deficiency  there  may  be  after  the  sale,  and  therefore  there  is 
no  occasion  for  a  suit  at  law  ;  and  to  prevent  a  multiplicity  of 
suits,  the  court  in  which  the  foreclosure  suit  is  pending  is  given 
complete  control  over  all  the  remedies  for  the  collection  of  the 
debt,  even  after  all  the  relief  asked  for  in  that  suit  is  exhausted. 
An  application  to  prosecute  a  suit  at  law  is  addressed  to  the  sound 
discretion  of  the  court.^  If  persons  against  whom  a  judgment 
for  deficiency  might  have  been  had  in  the  foreclosure  suit  have 
not  been  made  parties  to  it,  a  subsequent  action  at  law  might 
properly  be  refused.*  If  no  judgment  for  a  deficiency  is  asked 
for,  a  satisfactory  reason  for  a  separate  suit  must  be  shown.^  The 
fact  that  a  person  liable  for  the  debt  was  not  within  the  juris- 
diction of  the  court  when  the  foreclosure  suit  was  commenced 
would  doubtless  be  sufficient  reason  for  allowing  a  separate  suit 
against  him  for  a  deficiency.^ 

When  a  suit  at  law  is  pending  at  the  time  of  commencing  the 
foreclosure  suit,  and  there  are  advantages  in  testing  in  that  action 

1  It  is  provided    by   statute    that    the  '^  I'attison  v.  Towers,  4  Paige  (N.  Y.) 

mortgagee  shall  not  at  the  same  time  pur-  549;    Scoficld   v.  Doscher,  72  N.  Y,  491. 

sue  his  remedy  against  the  ])roperty  aud  See  in  connection,  Comstock  v.  Drohan, 

against  the  person  — in  Dakota  Territory:  71  N.    Y.     26;    Campbell    v.    Smith,  71 

R.  C.  1877,  p.  616.      Indiana:  Ui.vision,  N.  Y.  26;  and  comments  in  19  Alb.  L.  J. 

1876,  vol.  2,  p.   259.      Michigan:   Unless  383. 

authorized    by  court.      Comjiiled    Laws,  »  Equitable  Life  Ins.  Co.  v.  Stevens  (N. 

1871,  p.  1549.     Nebraska:  Unless  author-  Y.  Ct.  of  Appeals),  1  N.  Y.  Weekly  Dig. 

ized.     G.  S.  1873,   p.   656.      New  York:  465;  63  N.  Y.  341  ;  Scofield  v.  Doscher, 

Unless  authorized.      3  U.  S.  1875,  p.  198.  72  N.  Y.491. 

Washington  Territory  :  Laws,  1850,  p.  405.  *  Suydam  v.  Bartle,  9  Paige  (N.   Y,), 

In  Iowa,  if  a  »uit  at  law  on  the  debt  and  a  294 ;  Comstock  v.  Drohan,  8  Hun  (N.  Y.), 

suit  in  equity  on  the  mortgage  be  brought  373  ;  71  N.  Y.  26. 

at  the  same  time  in  the  same  county,  the  ''  Equitable   Life  Ins.    Co.   v.    Stevens, 

plaintiff  must  elect  upon   which   he    will  supra. 

proceed,  and  the  other  will  be  continued  at  ">  Bartlett  v.  McNeil,  60  N.  Y.  53. 
his  cost.     Code,  1873,  §  3320. 
238 


PERSONAL  REMEDY  BEFORE  FORECLOSURE.     [§  1224. 

the  validity  of  a  defence,  the  court  will  permit  its  prosecution, ^ 
and  it  will  be  allowed  to  proceed  when  it  is  necessary  in  this  way 
to  protect  the  plaintiff's  rights.^  A  new  suit  after  the  commence- 
ment of  the  foreclosure  suit  would  not  generally  be  permitted 
until  the  remedy  upon  the  decree  obtained  has  been  exhausted.^ 

In  the  same  states  if  a  judgment  at  law  has  already  been  ob- 
tained before  the  filing  of  the  bill  to  foreclose,  no  proceedings  can 
be  had  upon  this  until  the  remedy  upon  the  judgment  has  been 
exhausted.'*  A  bill  which  shows  that  judgment  has  been  obtained 
on  one  of  the  mortgage  notes  and  nearly  paid,  but  does  not  show 
that  an  execution  had  been  issued  and  returned  unsatisfied,  can- 
not be  maintained  unless  a  decree  as  to  that  note  be  waived.^ 
The  court  would  not  make  a  decree  against  a  defendant  when  it 
appears  that  the  execution  has  not  been  returned  unsatisfied,  al- 
though he  has  allowed  it  to  be  taken  as  confessed  against  hira.*^ 
On  the  other  hand  after  a  decree  has  been  entered  in  a  foreclosure 
suit,  proceedings  at  law  to  recover  the  debt  are  prohibited  unless 
leave  of  court  be  obtained.^ 

1224.  Decree  of  foreclosure  before  sale  no  bar  to  suit.  — 
Although  there  has  been  a  decree  of  foreclosure  and  sale  of  the 
mortgaged  property,  the  holder  of  the  mortgage  debt  is  not  pre- 
cluded from  instituting  a  suit  at  law  upon  it  before  the  sale,  and 
while  the  decree  is  under  the  control  of  the  court  rendering  it, 
for  the  decree  or  the  sale  under  it  may  be  set  aside.  Of  course 
an  action  so  commenced  may  be  defeated  by  the  subsequent  sale 
of  the  property  and  satisfaction  of  the  debt  from  the  proceeds. 
Until  that  happens  the  debt  remains  precisely  the  same  ;  and  if 
there  be  no  sale,  or  the  sale  be  set  aside,  the  action  may  be  pros- 
ecuted to  judgment.^  Until  the  sale  is  consummated  there  is  no 
absolute  satisfaction.  When  tlie  sale  is  complete  it  relates  back 
to  the  day  of  sale,  and  any  proceedings  then  pending  upon  the 
note  or  other  debt  are  then  defeated.^ 


1  Suydam  v.  Bartle,  9  Paige  (N.  Y.) 
294  ;  Comstock  v.  Drohan,  8  Ilun  (N.  Y.) 
373;  71  N.  Y.  9. 

2  Thomas  v.  Brown,  9  Paige  (N.  Y.) 
380;  and  see  Englc  v.  Underhill,  .'i  Edw 
(N.  Y.)  Ch.  249. 

•  Nichols  V.  Smith,  42  Barb.  (N.  Y.)  381 


137  ;  North  River  Bunk  v.  Rogers,  8  lb. 
648. 

^  Dennis  y.  Hemingway,  Walker  (Mich.) 
Ch.  387. 

«  Groavenor  v.  Day,  Clarke  (N.  Y.),  109  ; 
Shufelt  V.  Sliufelt,  supra. 

■  In  New  York:  2  R.  S.  191,  §  1.55. 


Bcofield  V.  Doschcr,  72  N.  Y.  491,  "  Morgan  v.  Sherwood,  53  111.  171.    See 

*  Sec  Shufelt  V.  Shufelt,  9  Paige  (N.  Y.),      §  660. 

•  Morgan  v.  Siierwood,  53  111.  171. 

2;]y 


§  l'2-2").]  KKMr.nir.s  von  enforcing  a  mortgage. 

1225.  Express  covenant  in  mortgage  to  pay.  —  The  fonu  of 
niort{j;ago  used  in  Enghiml  almost  always  contains  an  express 
covenant  to  repay  the  money,  and  frequently  no  note  or  bond  is 
used  in  connection  with  the  mortgage.  The  loan  is  then  a  spe- 
cialty debt,  and  the  mortgagee  has  a  personal  remedy  by  action 
upon  the  covenant.^  This  covenant  is  extended  also  to  the  pay- 
ment of  interest.  When  the  mortgage  is  executed  by  a  trustee, 
it  is  usual  for  the  equitable  owner  to  execute  the  personal  cove- 
nants, so  that  the  trustee  may  incur  no  personal  liability .^  'J'his 
personal  renKnly  upon  the  covenant  the  mortgagee  may  enforce 
at  the  same  time  that  he  proceeds  with  his  remedy  against  the 
land  by  a  foreclosure  suit,  or  by  sale  under  the  power  ;  or  he  may 
use  the  personal  covenant,  after  he  has  realized  what  he  can  from 
the  land,  for  the  deficiency .^ 

Although  there  be  no  note  or  bond  or  other  distinct  obligation 
which  the  mortgage  secures,  yet  if  the  mortgage  itself  contain  an 
express  covenant  for  the  payment  of  a  sum  of  money,  the  mort- 
gagor thereby  becomes  liable  to  a  personal  action  for  the  debt ;  * 
unless  the  covenant  implies  that  there  is  no  personal  liability,  as 
in  the  case  of  a  trustee  covenanting  for  the  repayment  out  of  the 
money  that  may  come  into  his  hands  from  the  mortgaged  prop- 
erty, or  from  money  that  he  may  otherwise  receive  in  such  official 
capacity.^ 

If  there  be  no  personal  obligation  and  no  personal  covenant  in 
the  mortgage,  then  the  only  remedy  is  against  the  property  mort- 
gaged.*"  The  proviso  or  condition  in  a  mortgage  that  the  deed 
shall  be  void  if  the  mortgagor  pay  a  sum  of  money,  or  perform 
some  other  act,  is  no  ground  for  a  personal  action  ; "  and  it  would 
seem  that  a  mere  acknowledgment  of  the  debt  would  not  be.*^ 

A  covenant  for  the  payment  of  the  debt  may  be  implied  from  a 
stipulation  for  payment  on  a  certain  day  ;  or  from  an  admission 
of  liability  for  the  payment  of  it.^     When  the  debt  was  not  evi- 

1  See  §§  72,  678;  Mathew  v.  Blackmore,  6  Culver  v.  Sisson,  3  N.  Y.  264;  Weed 
1  H.&  N.  762  ;  26  L.  J.  Ex.  150;  Browne  v.  CoviU,  14  Barb.  (N.  Y.)  242 ;  Coleman 
i;.  Price,  4  C.  B.  N.  S.  598;  L.  J.  C.  P.  v.  Van  Rensselaer,  44  How.  (N.  Y.)  Pr. 
290.  368  ;  Gaylord  v.  Knapp,  15  Hun  (N.  Y.), 

2  1  Prideaux  Conv.  570,  7th  ed.  187. 

8  Brown  I-.  Cascaden,  43  Iowa,  103.  7  gmith    v.    Stewart,   6   Blackf.    (Ind.) 

*  Elder  v.   House,    15    Wend.    (N.  Y.)  162;   Drummond   r.    Richards,    2   Munf. 

218.  (Va.)  .337. 

s  Mathew    v.    Blackmore,   1    H.   &   N.  »  Scott  i-.  Fields,  7  Watts  (Pa.),  360. 

762.  '  Hart  v.  Eastern  Union  Railway  Co.  7 

240 


PERSONAL  REMEDY  BEFORE  FORECLOSURE.     [§  1226. 

denced  by  a  note,  but  the  mortgage  contained  a  recital  that  the 
mortgagor  was  "  justly  indebted  "  in  a  certain  sum,  it  was  held 
that  the  mortgagee  might  maintain  an  action  upon  the  debt  with- 
out first  foreclosing  the  mortgage,  although  the  mortgage  con- 
tained the  further  covenant  that  if,  from  any  cause,  said  property 
should  fail  to  satisfy  said  debt  the  mortgagor  would  pay  the  de- 
ficiency.i 

1226.  Circumstances  that  exclude  personal  remedy.  —  The 
holder  of  a  mortgage  may  be  debarred  from  resorting  to  the  per- 
sonal liabiUty  of  the  mortgagor  by  reason  of  equities  or  agree- 
ments between  the  parties  of  which  the  holder  has  knowledge  ;  as 
when  the  owner  of  land  having  mortgaged  it  subsequently  sold 
the  equity  of  redemption  by  a  deed  which  stipulated  that  the 
grantee  should  assume  and  pay  the  mortgage,  and  took  back  a 
second  mortgage  to  himself  reciting  this  stipulation.  The  assignee 
of  the  second  mortgage,  who  also  took  an  assignment  of  the  first 
mortgage,  was  not  allowed  to  sue  the  first  mortgage  note.^ 

A  mortgagee  may  lose  his  right  to  sue  the  mortgagor  for  the 
debt  by  releasing  the  security  to  a  subsequent  purchaser  of  the 
property.  Such  was  the  case  when  a  mortgagee  concurred  with  a 
purchaser  of  the  equity  of  redemption  in  a  sale  of  the  property, 
and  allowed  the  purchaser  to  receive  the  purchase  money  ;  he  was 
not  allowed  afterwards  to  sue  the  original  mortgagor  for  the  debt.^ 
When  the  mortgagor,  with  the  knowledge  of  the  mortgagee,  sells 
the  mortgaged  estate  to  one  who  assumes  the  payment  of  the 
mortgage  debt,  his  relation  to  the  mortgagee  is  thenceforth  that 
of  a  surety  of  the  mortgage  debt.  The  property  is  moreover  the 
primary  fund  for  the  payment  of  the  debt,  and  a  release  to  the 
purchaser,  or  an  extension  of  the  time  of  payment,  may  discharge 
the   mortgagor.* 

When  a  mortgage  is  made  to  secure  the  debt  of  another,  and  it 
does  not  by  its  terms  or  otherwise  impose  any  personal  liability 
upon  the  mortgagor,  he  is  not  personally  bound  for  the  debt,  and 
there  can  be  no  general  execution  against  hira.^ 

Exch.  246  ;  8  lb.  1 1 6  ;  Mnrryat  v.  Mnrryat,  "  Palmer  t;.  Hcndric,  28  Beav.  341  ;  S. 

28  Beav.  224  ;  SaundiTS  v.  Mil.somc,  L.  It.  C.  27  Beav.  249. 

2  Eq.  573.      But  it  in  provided  liy  statute  *  §§  740-742. 

in  several  states  that  no  covenant  for  jiay-  ''  Chittenden  v.  Gossage,  18  Iowa,  157  ; 

ment  shall  he  iniplieii,  §  678.  Deland  v.  Morsiion,  7  Iowa,  70,  was  a  case 

'  Newhury  v.  Butter,  .38  Iowa,  179.  in  which  one  of  the  mortgagors  was  per- 

2  Swett  V.  Sherman,  109  Ma.ss.  231. 

VOL.  II.                                          16  241 


§§  l-'JT,  1228.]       RF.MKDIES    FOR   KNFOKCING   A   MORTGAGE. 

No  personal  jiulc:nuMit  can  be  rondcM-ed  against  the  wife  of  the 
mortgagor,  when  it  is  not  alleged  that  the  debt  is  one  for  whicli 
her  separate  estate  is  liable.^ 

3.  Personal  Remedy  after  Foreclosure. 

1227.  Suit  for  deficiency  after  a  sale  under  power.  —  If  an 
action  at  law  on  the  debt  be  pending  at  the  time  of  a  sale  under 
the  mortgage,  there  can  be  no  judgment  if  the  proceeds  of  the 
sale  equal  or  exceed  the  whole  mortgage  debt ;  but  if  the  pro- 
ceeds be  insufficient  to  pay  the  debt,  there  may  be  judgment  for 
the  balance  after  deducting  the  proceeds  of  sale.^  Where  suit  is 
brought  upon  certain  instalments  of  a  note,  and  subsequently  the 
mortgaged  property  is  sold  for  a  less  sum  than  the  whole  mort- 
gage debt,  the  mortgagee  is  not  obliged  to  apply  the  proceeds  of 
the  sale  to  the  payment  of  the  instalments  first  due,  and  sought 
to  be  recovered  in  the  action  at  law.  He  has  the  right  to  ap- 
propriate the  amount  so  received  to  the  payment  of  either  instal- 
ment.3  The  holder  of  the  mortgage  being  entitled  to  recover  the 
full  amount  of  the  mortgage  debt,  if  there  be  a  deficiency  after 
foreclosure  of  the  mortgage,  either  by  suit  or  under  a  power  of 
sale,  he  may  maintain  an  action  on  the  debt  for  what  remains 
due;*  and  a  judgment  for  the  deficiency  does  not  open  the  sale 
and  authorize  the  debtor  to  redeem.^  A  sale  under  a  power  bars 
the  equity  of  redemption  as  effectually  as  does  a  foreclosure  and 
sale  by  decree  of  court. 

1228.  Suit  at  law  for  deficiency  after  sale  under  decree  in 
equity.  —  If  the  plaintiti"  has  not  taken  a  judgment  in  the  fore- 
closure suit  for  any  deficiency  there  may  be  after  the  sale  of  the 
property,  he  may  afterwards  recover  the  balance  of  the  debt  re- 
maining unsatisfied  in  a  suit  at  law  upon  the  bond  or  note.^  The 
foreclosure  operates  as  a  payment  of  the  debt  to  the  amount  re- 
ceived from  the  sale,  or  to  the  value  of  the  property  in  case  of  a 
foreclosure  without  sale.'^ 

sonally  liable.     New   Orleans  Canal    Co.  '  Weld  v.  Rees,  48  HI.  429. 

V.  Hiif^an,  1  La.  Ann.  62.  «  See  chapter  xxxviii ;    Globe  Ins.  Co. 

»  McGlaughlin  v.  O'Uourke,  12  Iowa,  f.  Lansing,  5  Cow.  (N.  Y.)  .380;   Lansing 

459.  V.  Goelet,  9  lb.  346  ;    Torter  v.  Pillsbury, 

2  See  §  953,  and  chapter  xl ;  Wing  v.  36  Me.  278 ;  Stevens  v.  Dufour,  I  Blackf. 

Hayford,  124  Ma.ss.  249.  Ind.  387  ;  Watson  v.  Hawkins,  60  Mo.  .530. 

«  Draper  v.  Mann,  117  Mass.  439.  "  §  953  ;    Johnson  v.  Candage,  31   Me. 

*  Marston  v.  Marston,  45  Me.  412.  28;  Hunt  v.  Stiles,  10  N.  H.  466;  Bassett 
242 


SALE   OF   PREMISES   ON   EXECUTION    FOR    MORTGAGE   DEBT.       [§  1229. 

Where  a  sale  of  the  whole  of  the  mortgaged  premises  was  made 
in  satisfaction  of  the  first  instalment  of  the  mortgage,  the  usual 
clause  of  the  decree,  allowing  the  plaintiff  to  apply  for  a  further 
order  of  sale  upon  the  falling  due  of  the  subsequent  instalment, 
and  for  an  execution  for  any  deficiency,  became  inoperative  and 
was  no  bar  to  a  personal  action  against  the  mortgagor  for  the 
subsequent  instalment.  After  the  sale  of  all  the  property,  the 
only  remedy  remaining  is  the  enforcing  of  the  personal  liability 
of  the  mortgagor  upon  a  note  or  instalment  of  debt  subsequently 
falling  due,  and  there  could  be  no  further  order  of  sale,  and 
therefore  nothing  on  which  there  could  properly  be  a  further  de- 
cree. The  only  remedy  is  by  suit  at  common  law.^  This  cannot 
be  maintained  until  the  debt  is  due  and  payable  by  its  terms.^ 

4.  Sale  of  Mortgaged  Premises  on  Execution  for  Mortgage  Debt. 

1229.  Generally  a  mortgagee  cannot,  upon  a  judgment  re- 
covered for  the  debt  secured  by  a  mortgage,  levy  the  execution 
upon  the  mortgaged  property,  though,it  may  be  levied  upon  any 
other  property  of  the  debtor.^  Such  a  proceeding  would  amount 
to  a  foreclosure  in  a  way  not  contemplated  by  the  parties  or  pro- 
vided for  b}-  law.  The  levy  would  therefore  be  ineffectual,  and 
would  leave  the  mortgage  as  it  stood  before,*  subject  to  redemp- 
tion.^    The  mortgagee  is  just  where  he  begun.^ 

A  first  mortgagee  may  sue  his  mortgage  debt  and  levy  execu- 
tion upon  the  mortgagor's  right  to  redeem  a  second  mortgage  of 
the  same  land  ;  for  in  such  case  he  does  not  violate  the  contract 
contained  in,  .and  the  relations  created  by,  the  mortgage  deed.^ 

V.  Mason,  18  Coun.  131  ;  Doe  v.  M'Loskey,  55  Mo.  515  ;  Barker  v.  Bell,  37  Ala.  354. 

1  Ala.  708.  Now  so  provick-d  by  statute  in  North  Caro- 

1  Bliss  p.  Weil,  14  Wis.  35.  Una.      Code  of    Kumedial   Justice,  1876, 

2  Danfortii  v.  Coleman,  23  Wis.  528.  §  1432.     By  statute  uo  part  of  the  mort- 

3  Atkins  r.  .Sawyer,  1  Pick.  (Ma>B.)  gn^ed  premises  can  be  sold  by  virtue  of  an 
351  ;  Wa.shburn  v.  Goodwin,  17  Pick,  execution  for  the  mortgafje  dcl>t  in  New 
(.Mass.)  137;  Tice  i-.  Annin,  2  Johns.  York.  Code  Civil  Procedure,  1877,  §  1432  ; 
(N.  Y.)  (;h.  130,  |>er  Kent,  C. ;  Deiaplainc  in  Indiana  Revision,  1870,  vol.  2,  p.  205, 
V.  Hitchcock,  0  Hill,  14  ;  Trinim  v.  .Marsh,  §  G40  of  Code. 

t  Lans.  (N.  Y.)  509  ;  CHrpenteru.  Bowen,  *  Young  v.  Ruth,  55  Mo.  515  ;  Lumley 

\2  .Miss.  28  ;  Davis  i;.  Hamilton,  50  Miss.  v.  Robinson,  20  Mo.  364. 

2J3;  Linville  v.  Bell,  47  Ind.  547  ;  Camp  ^  Powell  v.  Williams,  14  Ala.  476  ;  Bos- 

V.  Coxe,  1  Dcv.  &  Bat.  (.\.  C.  L.)  52  ;  Gor-  well  v.  Carlisle,  55  Ala.  554. 

ing  V.  Shrcvc,  7  Dana   (N.  Y.),  64  ;  Wal-  "  Thornton  v.  Pigg,  24  Mo.  249. 

ItT  I'.  Tale,  4  B.  Mon.  (Ky.)  529  ;  Powell  ^  Johnson  v.   Steven.s,  7  Cush.  (Mass.) 

V.  Williams,  14  Ala.  476;  Young  v.  Ruth,  431. 

243 


§  1229.]  KKMF.DIF.S    FOR   ENFORCING   A   MORTGAGF. 

And  fur  tlio  s:um>  n-iisoii  the  iiulorsoe  of  one  of  two  notes  secured 
by  mortgage,  to  wlioiu  no  assignment  of  the  mortgage  has  been 
made,  may  levy  upon  tlio  equity  of  redemption,  to  satisfy  a  judg- 
ment recovered  by  him  on  the  note.^ 

Doubts  luive  even  been  ex})ressed  whether  a  mortgagee  coukl 
sell  under  execution  for  any  other  debt  due  him.'^  But  these 
doubts  were  not  well  founded  ;  for,  upon  such  a  sale  the  sum  bid 
is  the  value  of  the  land  above  the  mortgage  debt,  just  as  it  is  in 
case  of  a  sale  nu\de  upon  an  execution  obtained  by  a  third  person. 
If  a  stranger  purchases  at  such  sale,  the  relations  of  the  mortgagor 
and  mortgagee  are  not  disturbed  any  more  than  they  are  when 
the  sale  is  upon  an  execution  obtained  by  a  stranger.  And  if 
the  mortgagee  purchases,  the  effect  is  equally  in  the  one  case  as 
in  the  other  to  extinguish  the  mortgage  debt.^ 

In  some  courts,  however,  it  is  held  that  the  mortgaged  prop- 
erty may  be  sold  under  an  execution  issued  upon  a  judgment  for 
the  mortgage  debt.  In  such  case  not  merely  the  equity  of  re- 
demption is  sold  but  the  entire  mortgaged  estate,  so  that  the 
purchaser  tkkes  the  premises  free  of  the  mortgage.*  Such  sale  is 
of  course  a  waiver  of  the  mortgage,  which  cannot  afterwards  be 
foreclosed.  If,  instead  of  a  sale  the  mortgagee  levy  his  execution 
on  the  land  mortgaged  for  the  same  debt,  and  if  the  debtor  neg- 
lect to  redeem,  the  estate  becomes  absolute  in  the  mortgagee  not- 
withstanding the  mortgage.^  A  mortgagee  may  waive  his  lien 
on  the  real  estate  and  levy  an  execution  issued  upon  a  judgment 
recovered  on  his  mortgage  debt  upon  the  same  property,  just  as 
he  might  upon  any  other  property  of  his  debtor.  In  those  states 
in  which  it  is  provided  by  statute  that  executions  shall  be  levied 
upon  real  estate  by  sale  only  when  the  property  is  subject  to  mort- 
gage, it  may  well  be  that  a  mortgagee  cannot  levy  his  execution 
by  sale  of  the  equity  raised  by  his  own  mortgage  given  to  secure 
payment  of  the  same  debt ;  for  he  cannot  waive  his  security  and 
at  the  same  time  treat  it  as  still  subsisting  and  constituting  the 
foundation  of  an  equity.     But  the  holder  of  a  junior  mortgage 

1  Crane  v.  March,  4  Pick.  (Mass.)  131  ;  ^  Youse  v.  M'Creary,  2  Blackf.  Ind. 
Andrews  i'.  Fiske,  101  Mass.  422.  24-3;    Freeby  v.  Tupper,    1.5   Ohio,  467; 

2  Camp  V.  Coxe,  1  Dev.  &  Bat.  (N.  C.)     IloUister  v.  Dillon,  4  Ohio  St.  197. 

L.  52 ;  Tiiompson  v.  Parker,  2  Jones  Eq.  "  Crooker  v.  Frazicr,  52  Me.  405 ;  Por- 
(N.  C.)  475.  tery.  King,  1  Grcenlf,  (Me.)  297. 

'  Per  Rodman,  J.,  in  Barnes  i-.  Brown, 
71  N.  C.  507,510. 

214 


REMEDY    AS   AFFECTED   BY   BANKRUPTCY.       [§§  1230,  1231. 

may  in  such  case  sell  his  debtor's  equity  growing  out  of  a  prior 
mortgage. 1 

1230.  But  an  execution  for  the  mortgage  debt  may  be  levied 
upon  any  other  land  of  the  debtor,  or  upon  his  personal  prop- 
erty in  the  same  manner  as  any  other  debt.^ 

After  a  redemption  from  a  mortgage  sale,  a  judgment  for  the 
deficiency  may  be  levied  upon  the  same  property,  although  the 
debtor  has  other  property  subject  to  execution.^ 

5.  Remedy  as  affected  hy  Bankruptcy. 

1231.  Although  a  discharge  in  bankruptcy  will  prevent  a 
judgment  for  a  deficiency  on  the  note  or  debt,  it  will  not  prevent 
a  judgment  of  foreclosure.*  The  lien  of  the  mortgage  is  not  af- 
fected by  the  proceedings.  The  assignee  takes  the  propert}''  sub- 
ject to  all  the  legal  and  equitable  rights  of  the  mortgagee  and  of 
others.^  The  assignee  takes  only  the  rights  that  the  debtor  him- 
self had,  and  must  recognize  all  the  equities  of  other  parties  which 
the  debtor  would  be  held  to  recognize  in  a  court  of  equity.  Thus 
an  agreement  by  the  debtor  to  give  a  mortgage  may  be  treated  as 
a  specific  lien  upon  the  land,  and  a  mortgage  made  in  pursuance 
of  tlie  agreement,  although  made  just  previous  to  the  debtor's 
bankruptcy,  so  that  by  itself  it  would  be  open  to  objection  as  a 
fraudulent  preference,  by  reference  to  the  agreement  may  be  sus- 
tained as  a  valid  security.^  And  so  a  mortgage  given  a  short 
time  prior  to  the  mortgagor's  bankruptcy,  but  in  I'enewal  of  a  se- 
curity which  was  not  a  preference  under  the  bankrupt  act,  is  not 
opeu  to  that  objection."  Adjudication  alone  does  not  divest  the 
bankrupt's  title,  but  this  remains  in  him  until  the  appointment  of 
an  assignee.  Therefore,  where  one  was  adjudged  a  bankrupt,  but 
no  assignee  was  appointed,  and  no  further  proceedings  had,  for 
the  re;i3on  that  the  debtor  compromised  with  his  creditors,  giving 
notes  secured  by  a  mortgage,  it  was  held  that  when  a  year  after- 
wards be  again  Ijccarne  involved  and  an  assignee  was  appointed, 
the  mortgage  wa.s  valid  and  tniglit  be  foreclosed.'* 

1  Forsyth  f.  Rowell,  59  Mc.  131.  *  See   §    1438;    Roberts   v.   Wood,  .38 

2  Kosevclt  r.   Carpenter,  28  Barb.  (N.  Wis.  60  ;  Brown  u.  Hoover,  77  N.  C.  40. 
Y.)  426  ;  Simmons'  Hanlwarc  Co.  i'.  Bro-         ^  Gibson  v.  Warden,  14  Wall.  244. 
kaw,  7  Neb.  40.').  "  Hewitt  v.   Northup,   9    Hini   (N.  Y.), 

'  Canthom  v.  Indiana|)o1i8  &  Vincennea     54.3  ;  Burdick  v.  .Jackson,  15  N.  B.  U.  318. 
r..  U.  Co.  58  hid.  14.  ''  Burnhisel  v.  Firman,  22  Wall.  170. 

8  Robinson  v.  Hall,  7  Benedict,  6' 

245 


§  1231.]  ni-MKDII-S    FOR    ENFORCING   A   MORTGAGE. 

InasmiK'li  as  a  mortgage  taken  by  a  surety  enures  to  the  ben- 
efit of  the  j)rinei[)al  creditor,  the  surety  may  assign  the  mortgage 
to  sueh  creditor,  and  the  subseq\ient  discharge  of  both  the  surety 
and  llic  primipal  cU'btor  does  not  destroy  the  lien  of  the  mort- 
gage, or  atleot  the  mortgagee's  right  to  foreclose  it.^  But  even 
"without  sueh  an  assignment  a  court  of  bankruptcy  will  enforce 
the  mortgage  for  the  benefit  of  the  creditor  to  whom  the  surety 
has  become  bound.^ 

If  proceedings  to  foreclose  are  commenced  after  the  mortgagor 
has  filed  his  petition  in  bankruptcy,  although  no  judgment  can  be 
had  against  him  personally,  a  decree  may  be  rendered  against  the 
property.^ 

After  the  assignee  has  taken  actual  possession  of  the  mortgaged 
estate,  the  mortgagee  cannot  by  an  action  of  ejectment  disturb  his 
possession.  The  possession  of  the  assignee  is  the  possession  of 
the  court  in  bankruptcy,  and  if  the  mortgagee  would  enter  he 
must  first  obtain  permission  of  that  court.  If  the  mortgagee  be 
already  in  possession  he  cannot  be  disturbed  by  the  assignee,  ex- 
cept upon  redemption  of  the  mortgage.  If  the  assignee,  for  the 
reason  that  the  incumbrance  is  greater  than  the  value  of  the  prop- 
erty, does  not  assume  possession  of  it,  then  the  bankruptcy  pro- 
ceedings do  not  prevent  the  mortgagee  from  recovering  possession 
of  the  property  from  a  third  person  not  connected  with  the  as- 
signee. No  permission  from  the  bankruptcy  court  is  necessary  to 
authorize  the  mortgagee  in  such  case  to  maintain  an  action  of 
ejectment.*  Although  all  the  property  and  rights  of  the  bank- 
rupt pass  to  the  assignee  by  operation  of  law,  and  become  vested 
in  him  as  soon  as  he  is  appointed,  he  is  not  bound  to  take  posses- 
sion of  all  the  property.  If  the  property  be  so  incumbered  as  to 
be  of  an  onerous  or  unprofitable  character,  or  if  it  is  liable  to  be- 
come a  burden,  rather  than  a  profit  to  the  estate,  the  assignee  is 
not  bound  to  take  the  property  into  possession,  or  to  take  meas- 
ures to  sell  it;*  but  rather  it  is  his  duty  not  to  do  so.  If  he 
elects  not  to  take  the  property,  it  remains  in  the  bankrupt.  If 
he  does  not  elect  to  take  possession  of  the  property  within  a  rea- 
sonable time,  he  is  deemed  to  have  elected  to  abandon  it.  The 
title  of  the  bankrupt  to  the  equity  of  redemption  is  good  against 

1  Carlisle  v.  Wilkins,  51  Ala.  371.  »  Cockrill  v.  Johnson,  28  Ark.  193. 

2  Pierce,  in  re,  2  Lowell,  343 ;  Jaycox,         *  Eyster  v.  Gaff,  2  Colo.  228. 

in  re,  8  N.  B.  R.  241.  6  McHenry  v.  La  Socidtd  Fran(;aise,  95 

246  ^-  ^'  ^®- 


REMEDY   AS   AFFECTED   BY   BANKRUPTCY.  [§  1232. 

all  the  world  except  the  assignee,  as  the  presumption  is  that  the 
property  was  regarded  as  onerous,  and  that  the  assignee  elected 
not  to  take  it  into  possession. ^ 

1232.  In  what  court  the  mortgage  lien  may  be  enforced.  — 
Although  it  is  now  generally  held  that  the  state  courts  may,  with 
the  assent  of  the  assignee,  be  employed  not  only  to  ascertain  the 
amount  of  a  mortgage  lien,  but  to  enforce  it  as  well,  it  was  for- 
merly held  that  the  only  proper  tribunal  for  these  purposes  was 
the  district  court  in  bankruptcy  ;  and  that  if  the  creditor  remained 
outside  this  court  he  did  so  at  the  risk  of  being  refused  the  right 
to  enforce  his  lien  in  the  state  court.^  The  commencement  of  pro- 
ceedings in  bankruptcy  at  once  gives  to  the  court  of  bankruptcy 
full  and  exclusive  jurisdiction  over  all  the  bankrupt's  property, 
and  it  retains  this  jurisdiction  so  long  as  the  proceedings  in  bank- 
ruptcy are  pending.  It  matters  not  that  these  proceedings  are  in 
a  district  and  state  other  than  that  where  the  property  is  situated  ; 
the  courts  of  the  state  where  the  property  is  do  not  thereby  ac- 
quire any  rights  over  it.^ 

Therefore  if  proceedings  to  foreclose  a  mortgage  are  instituted 
in  a  state  court  after  an  adjudication  of  bankruptcy,  they  will, 
upon  motion,  be  stayed  until  these  proceedings  are  closed.  The 
bankruptcy  court  may  order  the  assignee  to  sell  the  property  sub- 
ject to  the  mortgage,  and  thus  leave  the  mortgage  to  be  enforced 
against  the  property  in  the  hands  of  the  purchaser.  After  such 
sale  it  would  seem  that  proceedings  to  foreclose  would  be  no 
longer  stayed.  But  on  the  other  hand,  the  court  sitting  in  bank- 
ruptcy may  authorize  the  assignee  to  redeem  the  mortgage  ;  or 
may  order  the  entire  property  to  be  sold  free  from  the  mortgage 
lien,  and  that  the  proceeds  be  paid  into  court,  in  which  case  the 
validity  of  the  mortgage  is  there  investigated  in  determining  the 
distribution  of  the  proceeds,  and  the  purchaser  takes  the  estate 
discharged  of  the  mortgage.* 

'  Amory  i-.  I^wrence,  3  Cliff,  523.  »  Markson  v.  Hancy,  47  Ind.  31. 

2  Hliim  V.  Elli.s,  73  N.  C.  293.  Judgo  *  Markson  v.  Iliiney,  47  Ind.  31  ;  Ncw- 
Litilc.in  this  case,  said:  "When  we  behold  man  v.  Fisher,  37  Md.  2.59;  Bripham  v. 
the  ol.scurity  in  which  this  suhject  has  Claflin,  31  Wis.  607  ;  Voorhies  v.  Frishic, 
been  involved  by  the  conflicting  decisions  25  Mich.  470.  In  like  manner  bankruptcy 
of  different  courts,  wc  arc  inclined  to  think  stays  proceedin^^.s  in  a  state  court  to  enforce 
that  it  would  have  been  better  had  Con-  a  mechanic's  lien;  Clifton  v.  Foster,  103 
grcfig  witheld  entirely  from  state  tribu-  Ma.ss.  233  ;  or  to  set  aside  a  fr.auiliiliiit 
nals  all  questions  touching  the  bankrupt,  conveyance.  Gilbert  v.  Priest,  65  Barb, 
hia  cre<litor8,  and  his  assets."  444,  overruling  S.  C.  63  Barb.  339. 

247 


§  l-23o.]  KKMEDIES   FOR   ENFORCING   A   MORTGAGE. 

The  state  courts,  however,  have  primd  facie  jurisdiction  to  fore- 
close mortgages,  although  the  suits  for  the  purpose  are  commenced 
after  the  adjudication  in  bankruptcy.  The  provisions  of  the 
bankrupt  law  that  the  property  covered  by  a  mortgage  shall  be 
sold  in  suoli  manner  as  the  bankruptcy  court  shall  direct,  are  for 
the  benefit  and  protection  of  the  unsecured  creditors  represented 
by  the  assignee,  and  he  may,  for  himself  and  tliem,  waive  such 
benefit  and  permit  the  property  to  be  sold  in  a  suit  in  a  state 
court.^  If  the  assignee  submits  himself  to  the  jurisdiction  of  a 
state  court  he  is  bound  by  its  judgment.^  The  jurisdiction  of  the 
state  courts  of  suits  for  the  settlement  of  conflicting  claims  to 
property  belonging  to  the  estate  of  the  bankrupt  is  not  divested.^ 
The  mortgagee  may,  with  leave  of  the  bankruptcy  court,  institute 
foreclosure  proceedings  in  the  state  court;*  or  the  assignee  may 
sue  in  a  state  court  to  collect  the  assets.^  Objection  that  leave 
was  not  given  by  the  bankruptcy  court  to  file  a  bill  of  foreclosui-e 
will  not  be  sustained,  if  made  a  j'ear  and  a  half  after  the  bill  was 
filed,  and  when  the  party  objecting  had  in  the  mean  time  ap- 
peared and  answered,  especially  when  the  premises  were  at  the 
time  in  the  possession  of  a  receiver  appointed  in  a  former  suit  in 
the  same  court.^  The  homestead  of  a  bankrupt  never  comes 
within  the  jurisdiction  of  the  bankruptcy  court,  and  therefore  a 
creditor  having  a  lien  upon  that  alone  may  enforce  it  by  suit 
while  the  bankruptcy  proceedings  are  pending,  without  obtaining 
leave  of  that  court. ^ 

1233.  Proceedings  in  bankruptcy  against  the  owner  of  the 
equity  do  not  suspend  a  suit  already  commenced  in  a  state 
court  fur  the  foreclosure  of  the  mortgage,  and  unless  restrained 
by  injunction  from  the  United  States  court  in  bankruptcy,  the 
plaintiff  may  pi'oceed  to  judgment  and  sale  of  the  premises,  and 
the  purchaser  acquires  a  good  title  against  the  parties,  including 
any  assignee  who  may  afterwards  be  appointed.^ 

If  the  assignee  in  bankruptcy  does  not  assume  possession  of  an 
estate   mortgaged  by  the  bankrupt,  proceedings  to  foreclose  the 

1  Mays  V.  Fritton,  20  Wall.  414.     In  re         ""  Claflin  v.  Houseman,  93  U.  S.  130. 
Moller,  7  Benedict,  726.  6  Jerome  v.  McCarter,  94  U.  S.  734. 

2  Mays  V.  Fritton,  supra.  '  In  re  Sinnett,  4  Sawyer,  2.50. 

8  Eysterv.  Gaff,  91  U.  S.  525;  Jerome  «  Lenihan  v.   Ilamann,  55  N.  Y.  652; 

w.  McCarter,  94  U.  S.  734.  14  Abb.  (N.  S.)  274;  McGready  v.  Har- 

*  McHenry  v.  La  Society  Fran9ai8e,  95  ria,  54  Mo.  137.    In  the  latter  case  there 

U.  S.  58.  had  been  no  adjudication  prior  to  the  sale 

248 


REMEDY   AS   AFFECTED   BY   BANKRUPTCY.  [§  1234. 

mortgage  whenever  commenced  may,  by  bis  tacit  consent,  go  on 
in  the  state  court. ^ 

Upon  the  institution  of  proceedings  in  bankruptcy,  and  the  ap- 
pointment of  an  assignee,  the  bankrupt's  property  comes  under 
the  jurisdiction  of  the  national  courts,  and  the  state  courts  can 
act  no  further  in  relation  to  it  while  such  proceedings  are  pending, 
except  with  the  consent  of  the  bankruptcy  court  or  of  its  officer, 
the  assignee,  in  whom  the  property  is  vested  by  the  assignment. 
A  suit  to  foreclose  a  mortgage  upon  the  bankrupt's  property,  if 
brought  subsequently,  should  be  brought  in  a  court  of  the  United 
States,  sitting  in  bankruptcy,  and  the  assignee  should  be  made  a 
party  to  it.  This  court  may  take  the  entire  administration  of 
the  bankrupt's  estate,  and  may  ascertain  and  liquidate  all  liens 
thereon,  and  for  this  purpose  may  restrain  the  holder  of  a  mort- 
gage or  other  lien  from  proceeding  in  any  suit  to  enforce  such 
lien ;  and  it  is  generally  proper  for  the  court  to  do  so  when  the 
value  of  the  property  exceeds  the  amount  secured  by  the  lien,  or 
when  the  amount  or  validity  of  the  lien  is  in  doubt.^  A  mort- 
gagee or  trustee  under  a  deed  of  trust  will,  upon  the  application 
of  the  assignee,  be  enjoined  from  selling  under  a  power  of  sale.^ 
If  the  foreclosure  suit  is  already  pending  in  a  state  court  at  the 
time  the  bankruptcy  proceedings  are  commenced,  it  may  be  al- 
lowed to  proceed  upon  making  the  assignee  a  party  to  it.  In  the 
case  of  a  voluntary  assignment  of  the  mortgaged  property  after 
the  commencement  of  a  suit  to  foreclose,  it  is  not  necessary  to 
bring  in  the  assignee  as  a  party  to  the  suit ;  but  if  the  assignment 
is  by  operation  of  law,  as  in  cases  of  bankruptcy  or  under  the  in- 
solvent acts,  the  assignee  should  be  made  a  party  before  further 
proceedings  are  had.  If  he  is  not  made  a  party,  the  foreclosure 
is  of  no  effect  as  to  him,  and  his  equity  of  redemption  remains 
unimpaired.* 

1234.  If  the  bankruptcy  proceedings  are  pending  in  a  state 
other  than  that  in  which  the  mortgaged  property  is  located, 

1  JIatclier  »;.  Jones,  53  Ga.  208.  Morrison,  11  lb.  327  ;    Dcas  v.  Tliornc,  3 

*  In  re  Iron  Mountain  (,'o.  of  Lake  Johns.  (N.  Y.)  544;  Rprmffcr  v.  Vnnder- 
Champlain,  9  Blatchf.  320;  In  re  Sacchi,  jkjoI,  4  Hdw.  (N.  Y.)  Cli.  3G2  ;  IJurnliam 
10  II).  2'.).  V.  De  Bevorsc,  8   How.  (N.  Y.)  Pr.  159; 

»  Dooley  v.  Va.  F.  Ins.  Co.  2   Hughes,  Winslow  v.  Clark,  47  N.  Y.  203 ;  Ilnssell 

482.  V.  Clark,  7  Cranch,  09  ;    In  re  Winne,  4 

*  Sedgwick  V.  Cleveland,  7  Paige  (N.  Nat.  Bank  Reg.  5  ;  Eystcr  f.  Gaff,  2  Colo. 
Y.),  287,  290  ;  Anon.  10  lb.  20  ;  Lowry  v.  228,  239. 

249 


§  1235.]  RKMKDIF.S    FOR    KNFORCING   A   MORTGAGB. 

altlidii^li  llit>  bankruptcy  court  may  exercise  extra-territorial  ju- 
risiiiction,  in  col  loot  iuj^  tlu^  estate  and  adjustiiif;  the  claims  of 
creditors,  yet  mattt'rs  alVectiug  the  real  estate  of  the  bankrupt  are 
of  a  local  character,  and  the  rights  of  parties  must  be  determined 
by  the  local  courts.  Therefore  it  is  held  that  a  suit  to  foreclose  a 
mortgage  on  the  bankrupt's  property,  situate  in  another  state, 
mav  be  commenced  after  he  is  adjudicated  a  bankrupt,  and  pros- 
ecuted in  the  state  where  the  land  is  situated.  The  mortgagee  is 
entitled  to  have  a  foreclosure  of  his  mortgage,  and  as  he  cannot 
have  any  remedy  in  the  District  Court  of  the  United  States  in 
which  the  bankruptcy  proceedings  are  pending,  he  is  allowed  to 
proceed  in  the  couits  of  the  state  where  the  lands  are.  The  as- 
signee is  protected  in  his  rights  by  being  made  a  party. ^ 

1235.  Bankruptcy  court  may  order  sale  subject  to  the 
mortgage.  —  As  already  observed  the  bankruptcy  court  may  al- 
low the  mortgagee  to  foreclose  his  mortgage  in  the  usual  way  in 
a  state  court,  or  may  take  upon  itself  the  duty  of  ascertaining  and 
enforcing  the  lien  by  a  sale  of  the  mortgaged  property.  It  may 
also  have  the  mortgaged  premises  sold  subject  to  the  lien,  and 
leave  the  mortgagee  to  proceed  to  a  foreclosure  against  the  pur- 
chaser ;  or  it  may  direct  a  release  of  the  mortgaged  premises  to 
the  mortgagee  in  satisfaction  of  the  debt.^ 

If  the  mortgagee  goes  into  the  bankruptcy  court,  that  court 
must  take  possession  of  the  mortgaged  property  and  sell  it;  and 
in  that  case  this  court  must  determine  the  order  of  priority  of  dif- 
ferent liens  upon  the  property,  and  the  rights  of  the  mortgagor 
under  any  claims  he  may  set  up,  as,  for  instance,  his  right  to  a 
homestead  exemption.  When  the  homestead  of  the  debtor  has 
been  sold  as  a  part  of  the  mortgaged  property,  the  court  has 
jurisdiction  to  order  the  bankrupt  to  deliver  possession  to  the 
purchaser  upon  the  bankrupt's  refusal  to  surrender  the  property 
to  the  purchaser.^ 

The  District  Court  in  bankruptcy  has  no  jurisdiction  of  a  sum- 
mary petition  by  a  mortgagee  against  the  assignee  to  order  a  sale 
of  the  property  when  it  appears  that  the  title  of  the  applicant  ^  is 

1  Whitridge  v.  Taylor,  66  N.  C.  273.  »  In  re  Belts  (U.  S.  C.  C.  E.  D.  Mo. 
In  this  case  the  assignee  accepted  service     1879),  7  Reporter,  522. 

and  was  willing  the  case  should  proceed.  *  In  re  Casey,  10  Blatchf.  316. 

2  In  re  EUerhorst,  2  Sawyer,  219.    And 
see  Clifton  v.  Foster,  103  Mass.  233. 

250 


REMEDY    AS    AFFECTED    BY    BANKRUPTCY.  [§  1236. 

in  dispute  or  that  the  estate  is  in  the  actual  possession  of  a  third 
person  claiming  title  ;  as,  for  instance,  when  it  is  in  the  possession 
of  receivers  appointed  by  a  state  court.^ 

1236.  If  a  mortgagee  desires  to  prove  his  claim  against  the 
mortgagor's  estate  in  bankruptcy  he  may  release  his  security  to 
the  assignee  and  prove  for  the  whole  of  his  claim  ;  or  he  may 
have  the  property  sold  under  direction  of  the  Bankruptcy  Court, 
and  prove  for  any  balance  of  his  claim  remaining  unsatisfied  ;  or 
he  may  instead  have  his  security  valued  and  prove  for  the  balance 
after  deducting  the  value  of  the  property.^  But  the  mortgagee 
need  not  take  either  of  these  courses.  He  may  rest  upon  his  se- 
curity, in  which  case  the  discharge  of  the  bankrupt  mortgagor 
constitutes  no  defence  to  a  subsequent  action  to  foreclose  the 
mortgage  ^  so  far  as  the  mortgaged  property  is  concerned,  but 
would  be  a  bar  to  any  personal  judgment  against  the  bankrupt. 

The  fact  that  the  mortgagee  has  proved  his  claim  in  bank- 
ruptcy does  not  prevent  his  foreclosing  his  mortgage  in  a  state 
court  upon  leave  granted  by  the  bankruptcy  court.* 

In  Illinois,  where  foreclosure  may  be  had  by  scire  facias,  the 
recovery  of  a  judgment  in  such  suit  is  no  defence  to  a  bill  in 
equity  to  foreclose  the  same  mortgage.^  The  mortgagee  may  use 
both  these  remedies  and  all  others  as  well,  but  of  course  can  have 
but  one  satisfaction. 

1  Bradley  i'.  Ilealey,  1  Holmes,  451,  and  apply  to  unfinished  proceedings  nnder  this 

cases  cited  ;  Knight  v.  Cheney,  5  N.  B.  R.  act:  and  because,  moreover,  much  of  what 

305 ;  and  see  Hayes  v.  Dickinson,  9  Hun  has  been  said  about  remedies  as  affected 

(N.  v.),  277;  Smith  v.  Mason,  14  Wall,  by  the  Bankrupt  Act  is  e<iually  applicable 

^jg  to  remedies  as   affected  by  the  insolvent 

«  Bankrupt  Act,  sec.  1075.  acts  of   the  several   states,    under   which 

Although  the  United  States  Bankrupt  there  arc  very  few  reported  decisions. 

Act  has  been  reiwaled,  the  sections  of  this  ^  Pierce  v.  Wilcox,  40  Ind.  70  ;    Wicks 

work  relating  to  remedies  upon  mortgages  v.  Perkins,  1  Woods,  383  ;  Price  v.  Amis, 

as  affected  by  that  act  have  been  retained  58  Ga.  604. 

in  the   present  edition,  not  only  because  *  Societe  D'Epargncs  v.  McHenry,  49 

they  are  of  use  in  determining  rights  un-  Cal.  351. 

der  past  proceedings,  but  because  they  still  ''  -Erickson  v.  Kafferty,  79  111.  209. 

251 


CHAPTER  XXVIir. 


rORECLOSUEB   BY  ENTRY  AND   POSSESSION. 


I.  Nature  of  the  remedy,  1237,  1238. 
II.  Statutory  provisions,  1239-1245. 

III.  The  entry,  124G-1257. 

IV.  The  possession,  12.'J8. 

V.  The    certiticate   of   witnesses,    1259, 
1260. 
VI.  The    certificate    of    the    mortgagor, 
12G1. 


VII.  Wlicn    the   limitation    commences, 

1262. 
VIII.  Record  of  tlic  certificate,  1203. 
IX.  Effect  of  the  foreclosure  upon  the 
mortgage  debt,  12G4. 
X.  Waiver  of  entry   and  foreclosure, 
1265. 


1.    Nature  of  the  Remedy.    ^ 

1237.  Foreclosure  by  means  of  the  mortgagee's  entering 
upon  the  premises  and  holding  them  for  a  limited  time  seems  to 
follow  naturally  from  the  principle  established  in  equity,  that 
after  forfeiture  of  the  condition  although  the  mortgagee  may  en- 
ter, yet  the  mortgagor  shall  be  allowed  within  a  reasonable  time  to 
redeem.^  The  entry  serves  to  give  notice  to  the  mortgagor  that 
his  right  of  redemption  will  be  lost,  unless  he  discharges  the  obli- 
gations of  his  deed.  The  mortgagee  immediately  receives  the 
rents  and  profits,  which,  as  part  of  his  security,  should  go  to  him, 
after  the  mortgagor's  default.  This  default  continuing,  the  prop- 
erty is  applied  to  the  discharge  of  the  debt  by  becoming  the  abso- 
lute estate  of  the  mortgagee.  The  length  of  possession  generally 
required  to  perfect  the  mortgagee's  title  to  the  property  makes 
the  remedy  a  slow  one  for  obtaining  money  in  discharge  of  a 
mortgage  debt.  But  the  remedy  is  inexpensive,  and  is  ready  at 
hand  to  be  applied  by  the  mortgagee  himself,  while  the  mortgagor 
cannot  complain  that  it  is  an  oppressive  one. 

1238.  Where  used.  —  This  mode  of  foreclosure  is  in  use  in 
Maine,  New  Hampsliire,  Massachusetts,  and  Rhode  Island,  and  is 
the  usual  remedy  in  these  states  to  secure  the  discharge  of  the 
mortgage  out  of  the  property,  except  in  case  of  power  of  sale 
mortgages,  which,  by  reason  of    the  promptness  of    the  remedy 

^  For  the  mode  of  obtaining  possession  by  process  of  law,  see  §§  1276-1318. 

252 


STATUTORY   PROVISIONS.  [§§  1239,  1240. 

afforded  by  them,  have  of  late  come  into  very  general  use.  The 
statutory  provisions  of  these  states  in  respect  to  the  entry  and  the 
evidence  of  possession,  though  similar,  are  in  important  details 
unlike,  and  therefore  a  brief  statement  will  be  made  of  these 
provisions ;  but  the  general  rules  governing  the  subject  being  of 
universal  application  will  be  stated  under  the  general  divisions  of 
the  following  sections. 

2.    Statutory  Provisions. 

1239.  In  Maine  ^  the  mortgagee  may  obtain  possession  for  the 
purpose  of  foreclosure,  either  by  process  of  law  or  by  entering 
peaceably  and  openly,  if  not  opposed,  in  the  presence  of  two  wit- 
nesses, whose  certificate  of  the  fact  and  time  of  such  entry,  signed 
and  sworn  to  by  them  before  a  justice  of  the  peace,  must  be  re- 
corded in  the  registry  of  deeds  where  the  mortgage  should  be 
recorded,  within  thirty  days  after  the  entry  is  made  ;  entry  may 
also  be  made  with  the  consent  in  writing  of  the  mortgagor  or 
other  owner,  in  which  case  such  consent  must  be  recorded  in  the 
same  manner  as  the  certificate  of  witnesses.  Possession  obtained 
in  either  of  these  modes  and  continued  for  the  three  following 
years  forecloses  the  right  of  redemption. ^  The  mortgagor  and 
mortgagee  may,  however,  in  the  mortgage  agree  upon  a  less  time, 
but  not  less  than  one  year,  in  which  the  mortgage  shall  be  fore- 
closed.^ 

1240.  Foreclosure  by  advertisement.  —  Another  mode  of  fore- 
closure witliout  entry,  but  based  on  the  same  principle  of  notice 
to  the  mortgagor,  is  provided  for  in  Maine.  The  mortgagee  gives 
public  notice  in  a  newspaper  printed  in  the  county  where  the 
premises  are  situated,  if  any,  or  if  not  in  the  state  paper,  three 
weeks  successively,  of  his  claim  by  mortgage,  describing  the  prem- 
ises intelligently,*  naming  the  date  of  the   mortgage,  and  stating 

1  There  can  be  no  foreclosure  in  equity  tently   used.      Chase   v.   Piilincr,  25   Me. 

in    this    state.      Although    the     llevised  341. 

Statutes,  c.  'M\,    in    terms    authorized  the  '■^  Rev.  Stat.  1871,  c.  90,  §§  3,  4. 

Supreme  Court  to  take  co(,'ni/,ancc,  us  a  ^  Acts,  1872,  c.  37. 

court  of  cfiuity,  of  "  suits  for  the  rcdemp-  *  Tlic  description  should  be  suflicient  to 

tion  and  foreclosure  of  mort(;age(l  estates,"  enable  those  interested  in  tiie  j)reniises  to 

it  was  held  that  the  apccilie  j)rovisions  of  identify    tiieni    with   reasonalile  certainty. 

the  statute    for    the  forcclo.Hure  of    inort-  On  this  ground  the  following;  was  held  in- 

gages  precluded  any  jurisdiction  in  e(|uity,  suflicient :  "  On  the  22d  day  of  June,  18150, 

and  that  the  language  of  the  statute  quoted  Lewis  Delu,  of  Portland,  mortgaged  to  the 

as   to   foreclosure  in  equity  was  iuadver-  undersigned  certain  property  particularly 

253 


§  1240. J  FOUi:CLOSUKK    15Y    KNTRY   AND    TOSSKSSION. 

that  the  ooiulilion  of  it  is  broken,  by  reason  whereof  he  chiims 
foreclosure  ;  '  a  eo})y  of  this  printed  notice,  with  the  name  and 
ihito  of  the  newspaper  in  which  it  was  hist  published,  is  recorded 
in  each  vi'i^istry  of  deeds  in  wiiich  the  mortgage  is  or  ought  to  be 
recorded,  within  tiiirty  days  after  tiie  hist  pubhcation  of  it.  In- 
stead of  such  pubhcation  an  attested  copy  of  the  notice  may  be 
served  on  tiie  mortgagor  or  his  assigns,  if  in  the  state,  by  the 
sheriff  or  his  deputy,  by  deHvering  it  to  him  in  hand  or  leaving 
it  at  his  place  of  last  and  usual  abode ;  when  the  notice  with  the 
sheriff's  return  is  recorded  within  thirty  days  after  service.  If 
the  premises  are  not  redeemed  within  three  years,  or  within  such 
time  not  less  than  one  year  as  the  parties  have  agreed  upon,  after 
the  first  publication,  or  after  the  service  of  the  notice,  the  right  of 
redemption  is  foreclosed.^  Under  this  statute  notice  by  a  mort- 
gagee after  he  has  assigned  his  mortgage  is  ineffectual.^  It  should 
then  be  given  by  the  assignee.  Notice  by  the  assignee  to  be  ef- 
fectual must  be  given  after  his  assignment  has  been  recorded ;  if 
the  notice  be  given  before  the  assignment  is  recorded  and  the 
person  entitled  to  redeem  has  no  actual  notice  of  the  assignment, 
the  mortgage  will  not  be  foreclosed  at  the  expiration  of  three 
years  from  the  time  of  publication.*  The  mortgage  without  the 
record  of  the  assignment  is  notice  to  the  owner  of  the  equity  that 
the  title  is  in  the  mortgagee,  and  he  may  act  upon  this  assump- 
tion, and  disregard  all  claims  by  other  persons ;  ^  whether  by  a 
subsequent  record  of  the  assignment  the  foreclosure  would  be 
complete  in  three  years  from  the  time  of  record  is  questionable.^ 
The  notice  must  describe  the  premises  so  intelligibly  that  those 
entitled  to  redeem  may  know  with  reasonable  certainty  what 
premises  are  intended."  The  publication  of  it  is  no  bar  to  a  sub- 
sequent writ  of  entry  to  foreclose  the  mortgage ;  ^  and  it  would 

described  iu  the  deed  situated  at  the  cor-  2  Rgv.  Stat.  1871,  c.  90,  §§  5,  6.     Acts, 

ner  of  Fore  and  India  streets,  in  this  city."  1872,  c.  37. 

Dela  V.  Stan  wood,  61  Me.  51.  »  Gushing  v.  Ayer,  25  Me.  383. 

1  A  notice  stating  that  "  the  condition  *  Heed  v.  Elwell,  46  Me.  270. 

had  been  broken,  and  now  the  mortgagees  ^  Mitchell  v.  Burnham,  44  Me.  286. 

give  notice   of   the   same,  and    that  they  "  Reed  v.  Elwell,  supra. 

claim  a  foreclosure  of  said  mortgage,"  is  ^  Chase  v.  McLellan,  49  Me.  375. 

sufficient.     It  may  be  inferred,  though  not  ^  Concord   Union  Mut.  F.  Ins.  Co.  v. 

declared,   that  the  foreclosure  is  claimed  Woodbury,  45  Me.  447  ;    and  see  Stewart 

by   reason   of    the  breach    of  condition,  v.  Davis,  03  Me.  539. 
Pearce  v.  Savage,  45  Me.  90. 

254 


STATUTORY   PROVISIONS.  [§§  1241-1243. 

seem  to  be  no  bar  to  an  open  and  peaceable  entry  by  the  mort- 
gagee for  this  pnrpose. 

1241.  In  New  Hampshire  ^  a  mortgage  may  be  foreclosed  by 
peaceable  entry,  and  continued  actual  peaceable  possession  for  the 
space  of  one  year,  and  by  publishing  in  some  newspaper  printed 
in  the  same  county,  if  any  there  be,  otherwise  in  some  newspaper 
printed  in  some  adjoining  county,  three  weeks  successively,  a  no- 
tice stating  the  time  at  which  such  possession  for  condition  broken 
commenced,  the  object  of  the  possession,  the  name  of  the  mort- 
gagor and  mortgagee,  the  date  of  the  mortgage,  and  a  description 
of  the  premises,  the  first  publication  to  be  six  months  at  least 
before  such  right  to  redeem  would  be  foreclosed. 

1242.  A  mortgagee  already  in  possession  of  the  mortgaged 
premises  may  publish  in  some  newspaper  printed  in  the  same 
county,  if  any  there  be,  otherwise  in  some  newspaper  printed  in 
some  adjoining  county,  three  weeks  successively,  a  notice  stating 
that  from  and  after  a  certain  day,  which  shall  be  specified  in  the 
notice,  and  not  more  than  four  weeks  from  and  after  the  last  day 
of  publication,  such  possession  of  the  premises  will  be  held  for 
the  purpose  of  foreclosing  the  right  of  the  mortgagor  and  all  per- 
sons claiming  under  him  to  redeem  the  same,  for  condition  broken, 
—  stating  the  name  of  the  moi-tgagor  and  of  the  mortgagee,  the 
date  of  the  mortgage,  and  a  description  of  the  premises  ;  and  by 
retaining  actual  peaceable  possession  of  the  premises  for  one  year 
from  and  after  the  day  specified  in  the  printed  notice  foreclosure 
will  be  effected. 

The  affidavit  of  the  party  making  the  entry,  and  of  the  wit- 
nesses to  it,  as  to  the  time,  manner,  and  purpose  of  said  entry,  and 
a  copy  of  the  published  notice  verified  by  affidavit  as  to  the  time, 
place,  and  mode  of  publication,  recorded  in  the  registry  of  deeds 
for  the  county  in  which  the  lands  lie,  are  evidence  of  the  entry 
and  publication.^ 

1243.  The  provisions  of  the  statute  must  be  strictly  fol- 
lowed in  order  to  efft^ct  a  change  of  title  by  foreclosure,  and  the 
proof  that  these  provisions  have  been  followed  must  be  such  as 

1  G.  L.  1878,  c.  136,  §  14.      Entry  may  also  be  had  by  a  bill  in  equity,  which  is  the 

al»o  be  made  by  process  of  law,  in  which  mode  to  l)e  preferred  when  the  matters  bc- 

case  no  |iiil)licntion  of  notice  is  necessary,  tween  the  panics  are  complicated.     Aiken 

and  foreclosure  is   complete  after  n  con-  i'.  Gale,  37  N.  M.  510. 

tinucd  actual  piosscssion  for  one  year.      G.  *  q.  g.  i867,  c.  122  ;    G.  L.  1878,  c.  136, 

L.  1878,  c.  136,  §  14.      Foreclosure  may  §§  14-16. 

255 


§  1-2  i  I.]  FORKCLOSURK    BY    ENTRY    AND    POSSESSION. 

the  statute  makes  conipotont.  Tlio  jvUidavit  of  one  witness  to  tlie 
entry,'  witlumt  the  allulavit  of  the  party  making  the  entry,  is 
not  evidence  of  the  entry.  When  a  copy  of  the  published  notice 
verified  by  allidavits,  pro})erly  recorded,  is  introduced  in  evidence, 
it  is  not  necessary  to  produce  the  original  notice,  or  the  papers  in 
which  it  was  published.^  It  is  not  necessary  that  knowledge  of 
the  jmblished  notice  should  be  brought  home  to  the  party  inter- 
ested.^ Even  notice  of  the  mortgagee's  entry  and  possession, 
under  the  statute  requiring  publication  of  notice,  is  insufficient 
without  publication.'^  The  published  notice  must  show  that  pos- 
session was  taken  for  condition  broken,  and  that  the  object  of 
such  possession  is  to  foreclose  the  mortgage.^  A  mistake  in  the 
notice  that  the  entiy  was  for  the  purpose  of  foreclosing  "  the  right 
in  equity  of  the  mortgagee"  is  fatal,  as  it  is  liable  to  mislead,  and 
the  statute  must  be  strictly  pursued.'^  The  acknowledgment  in 
writing  by  the  mortgagor  of  the  mortgagee's  entry  and  posses- 
sion is  not  evidence  of  actual  possession  or  of  a  foreclosure,  as 
against  a  stranger." 

1244.  In  Massachusetts,^  the  mortgagee  after  breach  of  the 
condition  may  recover  possession  by  action,  or  may  make  an  open 
and  peaceable  entry  on  the  mortgaged  premises  ;  and  such  posses- 
sion continued  peaceably  for  three  years  forever  forecloses  the 
right  of  redemption.  To  make  such  entry  elTectual,  a  cei'tificate 
in  proof  thereof  must  be  made  on  the  mortgage  deed  and  signed 
by  the  mortgagor  or  the  person  claiming  under  him  ;  or  a  certifi- 
cate of  two  competent  witnesses  to  prove  the  entry  must  be  made 
and  sworn  to  before  a  justice  of  the  peace  ;  and  such  certificate 
must  within  thirty  days  after  the  entry  be  recorded.^     Prior  to 

1  Wendell  v.  Abbott,  43  N.  H.  68,  and         ">  Worster  v.  Great  Falls  Co.  41  N.  H. 
see  Storer  v.  Little,  41  Me.  69.  16. 

2  Farrar  v.  Fessenden,  39  N.  H.  268.  *•  The  Supreme  Judicial  Court  has  juris- 
8  Howard  v.  Handy,  35  N.  H.  323,  375.  diction  in  equity  to  foreclose  mortgages. 
*  Ashuelot  R.  K.  Co.  v.  Elliot,  52  N.  H.     Gen.  Stat.  c.  113,  §  2.      But  this  jurisdic- 

387  ;  Demiiig  v.  Comings,  11   N.  H.  474,  tion  is  limited  to  cases  where  there  is  not 

484.  a   plain,    adequate,  and  complete  remedy 

6  Green  t;.  Davis,  44  N.   H.    71.     The  at   the  common  law;    and  consequently 

notice   merely   stated    that  on   August  5,  foreclosure  in  equity  can  seldom  be  had. 

1856,  the  mortgagee  took  quiet  possession  A  mortgage  of  a  railroad  franchise,  and 

of  the  premises,  by  entering  on  the  same,  property  incidental  to  its  e-xercise,  is  with- 

and  therefore  claims  a  foreclosure  of  the  in  the  equity  jurisdiction  of  the  court,  the 

mortgage  for  condition  broken.  remedy  at  law   being  inadequate.     Shaw 

c  Abbot  V.  Banfield,  43  N.  II.  153,  155.  v.  Norfolk  Co.  Tl.  R.  Co.  5  Gray,  162. 


a  Gen.  Stat.  1860,  c.  140,  §§  1,  2. 


256 


STATUTORY   PROVISIONS.  [§  1244. 

the  statute  of  1785  any  peaceably  entry  made  by  the  morto-ao-ee, 
by  himself,  without  the  presence  of  witnesses  and  without  process 
of  law,  was  sufficient,  provided  an  actual  entry  was  made  for  the 
purpose  of  foreclosure,^  followed  by  open  and  continued  posses- 
sion. The  statute  of  1785,  and  the  subsequent  one  of  1798,  made 
no  provision  for  the  recording  of  a  certificate  of  entry,  and  it  was 
necessary  either  that  the  mortgagor  should  have  actual  notice  of 
the  entry  or  that  possession  should  be  continued.  The  record  of 
a  memorandum  of  the  entry  availed  nothing  ;  actual  notice  only 
would  supply  the  want  of  peaceable  possession  ;^  although  an  en- 
tr}^  in  the  presence  of  witnesses  was  one  of  the  prescribed  modes 
of  foreclosing,  there  was  no  provision  made  for  taking  or  preserv- 
ing the  evidence.  Under  these  statutes  the  fact  of  entry,  which 
constituted  the  commencement  of  the  time  of  foreclosure,  could 
be  proved  by  any  competent  evidence.  The  testimony  of  the  wit- 
nesses of  the  entry  to  the  fact  and  purpose  of  it  was  the  proof 
ordinarily  made.^  Although  no  certificate  by  them  was  required, 
yet  it  was  the  common  practice  to  take  such  a  certificate,  as  a 
means  of  preserving  the  evidence,  which,  in  the  lapse  of  time, 
would  be  apt  to  pass  out  of  the  memory  of  the  witnesses.  Such 
certificate  verified  by  the  witnesses  was  competent  evidence;  and 
although  they  might  not  be  able  to  recall  the  facts  stated  in  the 
certificate,  their  testimony  that  they  signed  the  certificate,  and 
that  they  should  not  have  put  their  names  to  it  except  to  certify 
their  knowledge  of  the  facts  stated,  was  held  to  be  a  sufficient 
verification.* 

An  entry  by  the  mortgagee  upon  condition  broken  was  pre- 
sumed to  be  for  the  purpose  of  foreclosure,  unless  the  contrary 
appeared;^  but  no  such  presumption  followed  an  entry  before 
condition  broken,^  and  if  the  possession  was  commenced  before 
condition  broken  and  continued  afterwards,  either  actual  or  con- 
structive notice  to  the  mortgagor  of  the  purpose  of  the  mortgagee 

'  Whitney    v.    Guild,    II    Giny,   496;  -  Thayer    v.    Smith,    17    Mass.    429; 

Newall  i;.   \Vri;;ht,  3  Mass.  1.38;  Hoyd  v.  Skinner  v.  Brewer,  4  Tick.  468. 

Shftw,  14  Me.  ."18.     Statute  of  1785,  c.  22,  »  Gordon  v.  Lewis,  1  Siiinn.  52.5. 

§2,  provided  that  the  mortgagor  might  *  Crittenden    v.    Rogers,  8  Gray,  452; 

redeem,  "  unless  the  mortgagor  or  person  Smith  v.  Johns,  3  Gray,  517. 

claiming  under   liim  hath,  I)y  process  of  ''  Taylor  «;.   Weld,  5  Mass.   109,  121  ; 

law  or  hy  open  and  peaceable  entry  made  Hadley  v.  Houghton,  7  Pick.  29  ;  Skinner 

in   the  presence  of   two   witnesses,   taken  v.  Brewer,  4  Pick.  468. 

actual   possession    thereof  and  continued  <^  Krskine  v.  Townsend,  2  Mass.  493; 

that  [xjsgcssion  peaceably  three  years."  Pomeroy  v.  Winship,  12  Mass.  514. 


VOL.  II. 


17  257 


§  l-JU").]         FOREci.osniU':  i?y  kntky  and  possession. 

to  lioKl  for  ;i  fortM-losiirt'  was  necessary  in  order  to  constitute  a 
eonuniMKHMiifut  of  (lu-  limitation  of  tho  riglit  to  redeem.^  If  the 
nu>rt<;:ii;i'o  entered  umler  a  lease  or  by  other  hiwful  means,  and 
afterwards  nncK'rtook  to  hoUl  as  mortgagee  for  the  purpose  of  fore- 
closure, it  was  held  that  he  must  give  notice  of  his  intention  to 
the  party  entilh'd  to  redeem  in  order  that  the  latter  might  know 
when  the  limitation  of  his  right  to  redeem  began.^ 

The  object  of  the  open  and  peaceable  entry,  and  of  the  con- 
tinued possession  under  it,  was  to  give  the  mortgagor  such  notice 
that  he  might  know  when  commenced  the  limitation  of  the  three 
years,  beyond  which  his  right  of  redemption  would  cease.    . 

Notice  to  the  mortgagor  being  the  material  thing,  it  was  no 
objection  after  an  open  and  peaceable  entry,  such  as  would  neces- 
sarily give  him  actual  notice,  had  once  been  made,  that  the  posses- 
sion was  not  continued  by  the  mortgagee  personally.  He  might 
occupy  by  a  tenant,  and  as  his  tenant  the  mortgagor  might  re- 
main in  possession.^ 

These  decisions  under  the  statutes  in  force  before  the  Revised 
Statutes  of  1836  introduced  the  system  of  giving  notice  of  the 
entry  by  requiring  a  record  of  the  certificate,  though  not  directly 
applicable  now,  yet  serve  to  illustrate  the  force  and  effect  of  the 
present  law,  which,  being  generally  the  same  in  the  several  states 
in  which  this  mode  of  foreclosure  prevails,  will  be  stated  under 
the  appropriate  divisions  of  the  subject  in  subsequent  sections. 

1245.  In  Rhode  Island*  the  right  of  redemption  is  barred 
unless  payment  of  the  debt  and  interest  is  made  within  three 
years  next  after  the  mortgagee  or  other  person  claiming  under 
him,  either  by  process  of  law,^  or  by  peaceable  and  open  entry 
made  in  the  presence  of  two  witnesses,  lias  taken  actual  posses- 
sion of  the  mortgaged  estate,  and  continued  the  same  during  said 
term.  When  possession  is  taken  in  the  presence  of  witnesses, 
they  must  give  a  certificate  of  such  possession  being  taken  ;  and 
the  person  delivering  possession  must  acknowledge  before  a  jus- 
tice of  the  peace  within  the  town  where  the  estate  lies  that  the 
same  was  voluntarily  done,  which  certificate  and  acknowledgment 
are  recorded.^' 

1  Scott  V.  McFarland,  13  Mass.  .309.  also  by  a  bill  in  equity.     Gen.    Stat.  c. 

2  Ayers  v.  Waite,  10  Cusb.  72.  165,  §  14. 

8  Hadley  v.  Houghton,  7  Pick.  20.  ^  This  is   ejectment,    or   trespass   and 

*  In   this  state  foreclosure  may  be  had     ejectment.     See  chapter  xxix. 


258 


6  Gen.  Stat.  c.  162,  §  4;  c.  165,  §§  4,  5. 


THE   ENTRY.  [§§  1246-1248. 

The  possession  must  be  continued  "  during  said  term."  It 
must  be  accompanied  throughout  by  a  right  on  the  part  of  the 
mortgagor  to  redeem,  and  to  maintain  a  bill  for  that  purpose. 
But  after  the  owner  of  the  equity  of  redemption  has  surrendered 
possession,  an  absolute  conveyance  by  him  to  a  third  person  of  a 
portion  of  the  premises  is  not  such  an  interruption  of  possession 
as  will  prevent  the  completion  of  the  foreclosure  in  three  years 
from  the  entry. ^ 

3.   The  Entry. 

1246.  In  general.  —  As  already  stated,  under  the  earlier  laws 
open  and  visible  entry  in  the  presence  of  witnesses  was  solely  for 
the  purpose  of  giving  notice  to  the  mortgagor  that  his  right  of 
redeeming  would  be  gone  in  three  years.  The  entry,  like  a  judg- 
ment, fixed  the  time  from  which  the  three  years  began  to  run,  and 
at  the  same  time  gave  notice  of  it.  After  the  adoption  of  the 
system  of  certifying  and  recording  the  entry,  the  registration  of 
the  certificate  became  full  constructive  notice  to  all  persons  of  the 
fact  and  date  of  the  entr}',  of  the  cause  and  the  purpose  of  it. 
The  entry  and  possession  under  it  thus  became  of  much  less  con- 
sequence than  the  certificate,  which,  being  properly  made  and  re- 
corded, effects  the  foreclosure. 

1247.  The  entry  should  be  made  by  the  person  holding  the 
legal  title  to  the  mortgage  or  by  his  authorized  agent.  An  entry 
made  by  an  agent  of  the  mortgagee  without  express  authority 
may  be  subsequently  ratified  by  him  and  made  effectual.  An 
entry  made  by  an  attorney  or  officer  of  a  corporation  without 
legal  authority  may  be  made  the  act  of  the  corporation  by  ex- 
press ratification,  or  by  a  recital  of  it  in  a  subsequent  agreement 
or  deed  executed  by  the  corporation  to  tije  owner  of  the  equity .^ 
A  person  holding  two  mortgages  uj^on  the  same  land  may  enter 
under  tiie  first ;  his  possession  is  under  that  only,  and  redemption 
may  be  had  from  that  without  redeeming  from  the  second.^ 

1248.  Upon  the  death  of  the  mortgagee,  the  entry  should  bo 
made  by  iiis  executor  or  administrator,''  His  heirs  at  law  cannot 
make  an  effectual  entry,  as  the  mortgage  is  personal  assets  and 
goes  to  tile  personal  representative.     The   mortgagor's  right  to 

1  Daniels  r;.  Mowry,  1  R.  I.  151.  ■•  Gibj-on   v.   Bniley,  9   N.  II.   1G8;  Fi- 

»  Cutts  V.  York  Miiniif.  Co.  18  Mo.  190.     field  v.  Sperry,  20  N.  H.  338. 
•  Gcrrish  v.  I'.lftck,  122  Mans.  76. 

259 


§§  1249,  I'ioO.J     foueclosurp:  by  kntuy  and  tosskssion. 

iH'doi'in  remains  unafTeetcd  by  such  .an  entry,  unless  possession 
under  it  he  continued  so  lon<ij  that  tlio  statute  of  limitations  may 
bi'  pleaded  in  favor  of  the  ri<;ht  to  redeem.^  After  the  fore- 
closure is  complete  the  legal  estate  vests  in  the  heirs,  subject, 
like  other  real  estate  of  the  deceased,  to  be  used  for  the  purposes 
of  administration  ;  but  until  the  title  is  thus  made  complete  in 
the  heirs,  they  can  do  nothing  with  the  mortgage  or  with  the 
premises  covered  by  it. 

Although  a  mortgagee  cannot  make  an  effectual  entry  after  he 
has  assigned  all  his  interest  in  the  mortgaged  premises,  even  if  he 
remains  in  possession,^  yet  after  he  has  quitclaimed  to  a  third  per- 
son his  interest  in  a  portion  of  them,  his  entry  is  sufficient  to  fore- 
close the  mortgage  as  to  all  the  premises  covered  by  it,  even  that 
portion  in  the  possession  of  his  grantee.^ 

1249.  It  is  the  mortgagee's  right  to  foreclose  the  whole 
estate  embraced  in  the  mortgage  ;  but  where  the  owner  of  the 
equity  has  conveyed  a  part,  there  may  be  a  possession  and  fore- 
closure of  the  part  not  conveyed,  though  nothing  be  done  to  fore- 
close the  rest,  and  the  mortgage  will  be  paid  to  the  extent  of  the 
value  of  the  land  taken.*  A  mortgagor,  however,  cannot  under 
any  circumstances,  except  with  the  consent  of  the  holder  of  the 
mortgage,  have  a  part  of  the  mortgaged  premises  estimated  in 
payment  of  his  debt  ;  and  it  would  seem  that  without  the  mort- 
gagor's consent  there  could  be  no  foreclosure  of  a  part  of  the 
premises,  and  that  so  long  as  he  has  a  right  to  redeem  any  part 
he  may  redeem  the  whole."^ 

1260.  Assignment  of  the  entry.  —  An  entry  made  by  a  holder 
of  the  mortgage  enures  to  the  benefit  of  any  one  to  whom  it  may 
be  assigned  during  the  time  limited  for  redemption.  If  after  an 
entry  the  mortgage  be  assigned  at  the  request  of  the  mortgagor 
to  a  friend  of  his  to  hold  for  his  benefit,  the  foreclosure  is  not 
postponed  or  prevented  unless  the  mortgage  be  in  fact  paid.  Where 
one  at  the  request  of  the  mortgagor,  after  the  foreclosure  had 
been  running  more  than  two  years,  paid  the  amount  due  and  took 
an  assignment  of  it,  orally  agreeing  with  the  mortgagor  to  hold 

1  Haskins  v.  Hawkes,  108  Mass.  379  ;  *  Raymond  i'.  Raymond,  7  Cush.  605 ; 
Palmer  i;.  Stevens,  11  Cush.  147  ;  Fay  v.     Colby  v.  Poor,  15  N.  H.  198. 

Cheney,  14  Pick.  404 ;  Smith  v.  Dyer,  16  *  Green  v.  Cro.s.s,  45  N.  H.  574,  582. 

Mass.  18.  s  Spring  v.   Haines,  21   Me.  126;   and 

2  Si58on  V.  Tate,  109  Mass.  230;  Call  see  Treat  v.  Pierce,  53  Me.  71. 
r.  Leisner,  23  Me.  25. 

260 


THE   ENTRY.  [§  1251. 

the  mortgage  subject  to  his  claim  for  the  amount  paid,  and  to 
permit  the  mortgagor  to  sell  the  land  in  lots,  paying  over  the 
proceeds,  and  to  allow  the  mortgagor  to  redeem  at  any  time  by 
paying  the  amount  so  advanced  with  interest,  it  was  held  that  the 
foreclosure  was  not  stopped.^  Even  if  a  purchaser  from  a  mort- 
gagor, after  an  entry  by  the  mortgagee,  pays  him  the  amount  of 
the  mortgage  and  enters  into  possession,  the  foreclosure  may  still 
go  on  and  be  perfected  under  an  agreement  with  the  mortgagee 
that  he  should  hold  the  mortgage  and  consummate  the  foreclosure.^ 
Although  one  of  the  notes  has  been  transferred  to  a  third  person, 
an  entry  by  the  holder  of  the  mortgage  is  considered  as  made  for 
that  as  well  as  for  the  note  held  by  him,  and  will  operate  as  pay- 
ment of  both,  if  the  premises  be  of  sufficient  value  ;^  if  not  of 
sufficient  value,  the  notes,  in  the  absence  of  any  agreement  to  the 
contrary,  would  be  paid  pro  rata.  On  completion  of  the  fore- 
closure the  mortgagee  would  hold  a  proportionate  interest  in  the 
land  in  trust  for  the  holder  of  the  other  note. 

1251.  A  second  mortgagee  may  enter  and  take  possession 
for  the  purpose  of  foreclosure,  as  against  all  subsequent  mort- 
gages and  the  equity  of  redemption.*  The  second  mortgagee  may 
lose  his  estate,  if  he  does  not  redeem  it  from  the  first  mortgage  ; 
but  as  against  every  other  title  the  foreclosure  is  as  perfect  as  if 
the  first  mortgage  did  not  exist.  The  entries  under  the  two  mort- 
gages are  not  inconsistent.  The  second  mortgagee  holds  a  con- 
structive possession,  which  is  all  that  is  required,  and  his  certifi- 
cate of  entry  is  notice  to  all  subsequent  parties,  and  will  bar 
their  rights  after  such  possession  has  continued  for  three  years.^ 

A  first  mortgagee  has  the  right  to  retain  possession  of  the  es- 
tate for  the  purpose  of  foreclosing  against  the  original  mortgagor 
and  all  persons  claiming  under  him.  But  a  second  mortgagee  has 
also  a  right  to  foreclose  against  the  right  to  redeem  from  his  mort- 
gage, 80  that  a  foreclosure  of  both  mortgages  may  be  going  on  at 
the  same  time.  If  the  first  mortgagee,  after  having  taken  posses- 
sion for  the  purpose  of  foreclosure,  takes  a  third  mortgage  or  a 
conveyance  of  the  equity  of  redemption  from  the  mortgagor,  the 
second  mortgagee  is  still  entitled  to  such  a  judgment  for  posses- 
sion of  the  mortgaged   premises  as  will  enable  him  to  foreclose 

>  Capen  v.  UiclianUon,  7  Gray,  3G4.  ♦  Lincoln  v.  Emerson,  108  Mass.  87. 

'  Culls  V.  York  Manuf.  Co.  18  Me.  190.         '  Palmer  v.  Fowley,  5  Gray,  545  ;  and 
•  Haynes  v.  Wellington,  25  Me.  458.  see  Cavis  v.  McClary,  5  N.  II.  529. 

261 


§§  l'jr)-2-1'jr)4.]       KOKKCI.OSUKE    RV    ENTRY    AND    TOSSKSSION. 

tho  li^'lit  wliii'li  the  fust  tnortj^ii^ee  lias  of  rccU'CMiiing  from  the 
soooiul  mortgage,  subject  to  t\\v  prior  right  of  the  first  mortgagee, 
to  hold  possession  for  the  purpose  of  foroelosiug  his  mortgage.^ 

A  subsequent  mortgagee  has  only  an  equity  of  redemjjtion  as 
to  prior  mortgagees.  He  may  enter  and  take  possession  of  the 
mortgaged  premises  as  against  the  mortgagor  ;  but  is  himsi^lf  lia- 
ble to  be  ousted  of  liis  possession  by  the  entry  of  a  prior  mort- 
gagee. A  first  mortgagee  after  entry  may  authorize  the  mort- 
gagor to  occupy  as  his  agent ;  but  the  death  of  the  first  mortgagee 
is  a  revocation  of  such  authority,  and  the  mortgagor  cannot  by 
virtue  of  his  agency  afterwards  hold  the  premises  against  a  sec- 
ond mortgagee.^  A  mortgagor  who  gives  a  second  mortgage  con- 
taining full  covenants  of  warranty  and  subsequently  acquires  title 
to  the  first  mortgage  after  possession  taken  under  it,  cannot  hold 
possession  against  the  second  mortgagee,  because  he  is  estopped 
by  the  covenants  of  warranty.^ 

1252.  A  married  woman  cannot  enter  to  foreclose  a  mort- 
gage of  land,  the  equity  of  redemption  of  which  is  held  by 
her  husband.  The  statutes  removing  the  disabilities  of  married 
women  do  not  allow  the  adverse  relation  of  debtor  and  creditor 
to  exist  between  husband  and  wife.  She  could  not  maintain  a 
writ  of  entry  against  her  husband,  and  the  process  of  foreclosure 
by  entry  and  possession  is  equally  adverse.^  Her  right  to  enforce 
a  forfeiture  of  the  land  in  this  way  revives  so  soon  as  a  convey- 
ance of  it  is  made  by  her  husband. 

1253.  The  mortgagee  may  enter  at  any  time  after  breach 
of  the  condition,''  and  he  does  not  lose  the  right  by  bringing  an 
action  to  foreclose  ;  but  he  may  take  possession  during  the  two 
months  allowed  to  the  mortgagor  under  the  conditional  judgment 
to  pay  the  amount  due.^  If  a  writ  of  possession  be  subsequently 
issued  upon  such  judgment,  and  possession  delivered  to  the  mort- 
gagee by  virtue  of  the  writ,  then  the  previous  entry  is  waived  by 
the  entry  under  the  writ.^ 

1254.  An  entry  upon  a  part  of  the  land  mortgaged  by  one 
general  description  is  sufficient,^  and  when  several  distinct  and  de- 

'  Cronin   v.   Hazletine,   3   Allen,   324;  *  Tucker  n.  Fcnno,  110  Mass.  311. 

Doten  V.  Hair,  16  Gray,  149;  Palmer  v.  ^  See  chapter  xxv. 

Fowley,  5  Gray,  .545;  George  v.  Baker,  3  "  Mann  v.  Earle,  4  Gray,  299. 

Allen,  326.  ^  p^y     j,.     Valentine,     5    Pick.    418; 

2  Lincoln  v.  Emerson,  108  Mass.  87.  Fletcher  v.  Gary,  103  Mass.  47.5,  480. 

^  Lincoln  v.  Emerson,  supra.  ^  Lennon     v.    Parker,    5    Gray,    318  ; 

262 


THE   ENTRY.  [§  1255-1257. 

tached  parcels  in  the  same  county  are  mortgaged  in  one  deed  for 
the  performance  of  one  condition,  an  entry  upon  any  one  is  a  good 
entry  upon  the  whole. ^  Even  if  the  mortgagor  remains  in  pos- 
session of  a  part  of  the  premises,  and  does  various  acts  of  owner- 
ship, such  as  blasting,  quarrying,  and  carrying  away  stone,  he 
does  not  defeat  the  entry  and  possession  of  the  mortgagee.  These 
acts  are  held  to  be  done  in  subordination  to  the  title  of  the  mort- 
gagee, whom  the  mortgagor  cannot  disseise.^  The  recording  of 
the  evidence  of  entry  is  notice  to  all  persons  of  the  relation  the 
mortgagor  holds  to  the  property ;  and  he  is  conclusively  prevented 
from  holding  adversely  to  the  mortgagee. 

1255.  In  making  the  entry  the  mortgagee  should  have  the 
mortgage  deed  with  him,  to  enable  the  witnesses  to  certify  that 
the  entry  is  made  under  that  particular  mortgage  ;  but  if  they 
certify  that  the  entry  is  made  under  the  mortgage,  the  certificate 
is  conclusive  of  the  identity  of  the  mortgage,  whether  the  wit- 
nesses have  any  proper  knowledge  of  it  or  not.^ 

1256.  An  entry  is  peaceable  if  not  opposed  by  the  mortgagor 
or  other  person  claiming  the  premises.  If  it  be  opposed,  the 
mortgagee  must  resort  to  his  action  at  law  to  recover  possession. 
Though  forcibly  repelled  he  cannot  resort  to  the  process  of  foi'ci- 
ble  entry  and  detainer.*  The  remedies  are  confined  to  those  spe- 
cifically given  by  statute. 

1257.  The  entry  is  sufficiently  open  if  made  in  the  presence 
of  two  competent  witnesses,  whose  certificate  is  sworn  to  and  duly 
recorded  within  thirty  days  in  the  registry  of  deeds  for  the  county 
where  the  land  lies.^  Even  though  the  entry  be  made  in  the 
night-time,  and  purposely  in  secret,  it  is  sufficient  if  the  certificate 

Spring  V.  Haines,  21  Me.  126;  Colby  v.  tenements  whereof  he  hath  title  of  entric, 

Poor,  15  N.  H.  198.  as  if  he  had  entered  indeed  into  every  por- 

'  Bennett    v.   Conant,    10   Cush.    16.3;  cell."     Litt.  sec.  417.     "  If  the  lands  lie 

Green  v.  Pettinf,'ill,  47  N.  H.  37.5  ;  Shnp-  in  several   counties,"  says  Coke,   "  there 

ley  V.  Rangeley,  1  Wood.  &  M.  213.     "  If  must  be  several  actions,  and  consequently 

a  man  hath  cause  to  enter  into  any  lands  several  entries."     Coke,  Litt.  2.')2  h. 

or   tenements  in   diverse   towncs    in   one  ^  Hunt  v.  Hunt,  14  Pick.  374. 

same  countie,  if  he  enter  into  one  porcell  ^  Sec  Skinner  v.  Brewer,  4  Pick.  468. 

of  lands  or  tenements  wliieh   arc  in  one  *  Walker    i;.    Thayer,    113    Mass.    36; 

towne,  in  the  name  of  all  the  lands  or  ten-  Hastings   v.   Pratt,   8   Cush.  121;  Lamed 

cments  into  which  he  hath  rii,'ht  to  enter  v.  Cl.irkc,  8  Cush.  29;  Gerrish  i'.  Mason, 

within  all  the  townes  of  the  same  countie;  4  Gray,  432. 

by  such  entrie   he  shall   have  as  ^^od  a  *  Thompson  v.  Keuyon,  100  Mass.  108. 
possession  and  seizin  of  all  the  lands  and 

263 


§  1258.]  FORKCLOSUKK    BY    KN  IKY    AND    rOSSKSSION. 

of  the  entry  be  duly  sworn  to  ;uul  recorded.^  No  ])ublicity  need 
be  given  to  the  enti-y  other  than  the  record  of  it.  Although  the 
mortgagee  be  abvady  in  occupation  of  the  premises,  he  may  make 
an  entry  in  the  presence  of  witnesses,  for  the  purpose  of  foreclos- 
ure, without  giving  other  notice  of  it  than  recording  the  certifi- 
cate. After  a  breach  of  the  condition  has  given  the  mortgagee 
the  right  to  enter,  it  is  for  the  mortgagor  to  find  out  from  the 
registry  whether  he  lias  entered.^ 

After  a  breach  of  the  condition  of  a  mortgage,  an  entry  by  the 
mortgagee  upon  the  premises  is  presumed,  in  the  absence  of  evi- 
dence to  the  contrary,  to  have  been  for  the  purpose  of  foreclosure.^ 

4.   The  Possession. 

1258.  The  possession  taken  is  a  constructive  rather  than  a 
literal  one.  The  formal  entry  being  made,  the  law  presumes 
that  possession  continues  unless  its  interruption  be  proved.  The 
mortgagor  may  be  permitted  to  remain  in  occupation  without  in 
any  way  defeating  the  operation  of  the  entry  ;  and  the  mortgagee 
need  not  take  the  rents  and  profits.  The  mortgagor  holds  in  sub- 
ordination to  his  mortgagee's  paramount  right.  His  possession  is 
the  possession  of  the  mortgagee,  and  not  adverse.*  Even  under 
a  statute  requiring  "actual  possession  "  by  the  mortgagee,  "  act- 
ual occupation  "  by  him  is  not  required.  The  occupation  may 
continue  in  the  mortgagor,  who  will  be  regai'ded  as  a  tenant  at 
will  of  the  mortgagee,  in  whom  is  the  possession.  It  is  only  nec- 
essary that  the  possession  of  the  mortgagor  or  other  tenant  should 
not  be  adverse.^  In  Maine,  however,  the  possession  required  is 
equivalent  to  an  actual  possession.^  The  mortgagee's  formal 
entry  does  not  amount  to  anything  without  continued  possession 
for  three  years. '^ 

1  Ellis  V.  Drake,  8  Allen,  161  ;  Ilobbs  Howard  v.  liamly,  35  N.  II.  315,  323; 
V.  Fuller,  9  Gray,  98.  Gibson  v.  Bailey,  9  N.  H.  172  ;  Kittredge 

2  Davis  V.  Kodgers,  64  Me.  159  ;  Chase  v.  Bellows,  4  N.  H.  424;  Ilurd  v.  Cole- 
V.  Marston,  66  Me.  271.  man,  42    Me.  182  ;  Chase  v.  Marston,  66 

8  Walker   v.   Thayer,    113   Mass.    36;  Me.  271. 

Ayres  v.   Waite,   10  Cush.  72;  Taylor  v.  ^  Palmer  v.  Fowley,  5  Gray,  545,  546  ; 

Weld,  5  Mass.  109  ;  Whitney  v.  Guild,  II  Swift  v.  Mendell,  8  Cush.  357  ;  Gilman  v. 

Gray,  496  ;  Hunt  v.  Stiles,  10  N.  H.  468.  Hidden  5  N.  II.  30. 

*  Ellis  V.  Drake,  8  Allen,  161  ;  Fletcher  «  Chamberlain  v.  Gardiner,  38  Me.  548. 

V.  Gary,  103  Mass.  475  ;  Swift  v.  Mendell,  "^  Chase  v.  Marston,  66  Me.  271  ;  Jarvis 

8  Cush.  357  ;  Bennett  v.  Conant,  10  Cush.  v.  Albro,  67  Me.  310. 
163;  Deming  i;.  Comings,  UN.  H.  474; 

264 


THE   CERTIFICATE    OF   WITNESSES.       [§§  1259,  1260. 

5.    Tlie  Certificate  of  Witnesses. 

1259.  What  it  must  state.  —  The  purpose  of  the  certificate 
being  to  give  notice  to  all  persons  concerned  that  the  mortgagee 
has  entered  for  foreclosure,  its  allegation  must  be  definite,  and 
must  cover  all  the  matters  necessary  to  effect  this  change  of  title. 
The  mortgage  to  be  foreclosed  must  be  identified.  The  fact  of 
entry  and  the  date  of  it  are  the  most  essential  particulars.  The 
purpose  of  it  should  be  declared ;  ^  but  the  manner  in  which  the 
entry  is  made  is  not  of  material  importance  so  far  as  the  certifi- 
cate goes.  The  omission  to  state  in  terms  that  the  entry  was 
"  open  and  peaceable  "  does  not  make  the  certificate  defective  ;  ^ 
it  is  enough  to  state  that  it  was  made  in  the  presence  of  two  Avit- 
nesses.  It  seems,  however,  that  it  is  open  to  the  mortgagor  to 
prove  that  the  entry  was  not  in  fact  open  and  peaceable  if  this  be 
not  alleged  in  the  certificate.^ 

1260.  The  certificate  duly  made  and  recorded  is  conclusive 
evidence  of  the  acts  and  statements  of  the  mortgagee  with  ref- 
erence to  the  entry,  and  its  allegations  of  any  fact  necessary  to 
establish  foreclosure  as  of  an  actual  entry  having  been  made  can- 
not be  controlled  by  oral  evidence.*  The  certificate  cannot  be 
contradicted  by  proof  that  the  mortgagee  did  not  actually  go  upon 
the  lands.     If   it  omit  to  state  any  essential  fact,  it  cannot  be 

1  In  Massachusetts  the  purpose  of  the  ^  The  form  of  certificate  in  general  use 

entry  after  a  breach  of  the  condition  would  is  as  follows :  — 

be  presumed  to  be  for  the  purpose  of  fore-  "  We  hereby  certify  that  we  were  this 

closure.      See  §  1257.      But  in  Maine  it  is  day  present  and  saw                    ,  the  mort- 

held  that  a  statement  that  the  jjurjiose  of  gagee  named  in  a  certain  mortgage  deed 

the  entry  is  to  foreclose  the  mortgage  is  cs-  given  by                    ,  dated                   ,  and 

sential,  though  the  mortgagee's  intention  recorded                    ,  make  an  open,  ])eace- 

to  foreclose  may  clearly  appear.     Morris  able  and  unopposed  entry  on  the  premises 

t'.  Day,   37   Me.  386.     The  certificate   in  described   in   the   .said    mortgage,  for   the 

this  case  concluded  thus  :  "  The  condition  jjurposc   by    him   declared  of  forcclo.sing 

of  said  mortgage  having  been  broken,  the  said  mortgage  for  breach  of  the  condition 

said   Day  claims   to  foreclose   the  same,  thereof.     In  witness  whereof  we  hereto  set 

We,  the  subscribers,  at  the  re(|ucst  of  said  our  hands  this                   day  of 

Day,  went  with  him  on  all  the  premises  "  A.  B. 

de.scribed   in   the   mortgage  deeds,  on  the  "  C.  D. 

sixteenth  day   of    May,  a.  d.    1839,   and  This  should  be  sworn  to. 

saw  him  enter  and  take  peaceable  pos.se.s-  ■•  Oakham     v.   Rutland,  4   Cush.    172; 

sion  of  the  premises."      This  was  held  in-  Swift   v.   Mcndell,  8  Cush.  357  ;  Ellis  v. 

effectual  to  establish  a  foreclosure.  Drake,  8  Allen,   101  ;  Thompson  i;.  Keii- 

»  Hawkcs  i;.  Brigham,   16    Gray,    501  ;  yon,  100  Mass.  108,  112. 
Thompson  v.  Ken  von,  100  Mass.  108. 

265 


^§  llllll,  1l!()"2.]       rOHKCLOSURE    RY    ENTRY    AND    POSSESSION. 

t'liri'tl  by  sdhsoiiucnt  tt'stimony  of  witncHScs.  All  iho  faets  nect'S- 
sarv  to  the  foivi'losiiro  must  appear  by  the  certificate,  which  is  the 
only  proper  evitU'iu'e  of  thein.^  The  certificate  is  not,  howciver, 
conclusive  evidence  that  there  has  been  a  breacli  of  the  condition 
of  the  mortgage.  Whether  there  has  been  a  breach  or  not  may 
be  shown  by  parol  evidence.'^ 

The  certificate  of  witnesses  to  prove  the  entry  need  not  be  on 
the  mortgage  deed  ;  but  may  be  on  a  separate  paper.^  The  sig- 
nature of  a  witness  is  sufficient  if  made  by  his  mark."^ 

6.  The  Certificate  of  the  Mortgagor. 

1261.  When  the  mortgagor  consents  to  the  entry,  and  makes 
a  certificate  °  of  the  fact,  this  is  conclusive  evidence  of  it.  He  is 
estopped  to  deny  the  fact  of  such  entry.  It  is  of  no  consequence 
that  he  continues  in  occupation  of  the  premises  ;  for  after  entry 
he  must  hold  as  tenant  of  the  mortgagee,  or  in  subordination  to 
his  right  of  possession.^  After  the  mortgagor  has  conveyed  the 
equity  of  redemption  to  a  third  person,  and  has  no  further  in- 
terest in  it,  he  cannot  give  a  good  certificate,  although  he  remains 
in  possession  of  the  premises.^  If,  however,  he  has  taken  back  a 
mortgage  of  the  pi'emises  on  conveying  them,  he  as  well  as  the 
purchaser  should  consent  to  the  entry.^ 

7.  When  the  Limitation  commences. 

1262.  The  limitation  of  three  years  commences  after  the 
entry  has  been  made  and  possession  acquired  for  a  breach  of  the 
condition  of  the  mortgage  ;  and  as  the  law  does  not  take  notice 

1  Morris  v.  Day,  37  Me.  386.  «  Lawrence   v.  Fletclier,    10  Met.  344; 

2  Hill  V.  More,  40  Me.  515  ;    Pcttee  v.     Oakham  y  Rutland,  4  Cash.  172  ;  Bennett 
Case,  11  Gray,  478.  v.    Conant,  10  Cnsh.   163,  166;   Swift  v. 

3  Bartlett  v.  Johnson,  9  Allen,  .530.  Mendell,  8  Cush.  357. 

*  Thompson   V.  Kenyon,  100  Mass.  108.  In   Maine  it  is   held    actual   possession 

s  The  following  is  a  usual  form  of  a  must  be  taken ;  the  mortgagor's  consent  to 

mortgagor's  certificate: —  entry  and  declaralion  that  "possession  is 

"  I                   ,  the  within  named  mort-  hereby  given,"  is  not  sufficient,  unless  act- 

gagor,  hereby  acknowledge  anil  certify  that  ual    entry    was    made.      Chamberlain    v. 

,  the  within  named  mortgagee,  has  Gardiner,  38  Me.  548  ;  Storer  v.  Little,  41 

this  day  made  an  open,  peaceable,  and  un-  Me.  69  ;  Pease  v.  Benson,  28  Me.  336.     In 

opposed  entry  upon  the  premises  described  Massachusetts   this    certificate    must     be 

in  the  within  mortgage,  for  breach  of  the  made  on  the  mortgage   deed.     Gen.  Stat, 

condition  that  it  contained.      Witness  my  1860,  c.  140,  §  2. 

hand  this                 day  of                 .  '  Sisson  v.  Tate,  lo"9  Ma^s.  230. 

"  A.  B."  8  Chase  V.  Gates,  33  Me.  363. 
266 


WHEN   THE   LIMITATION   COMMENCES.  [§  1262. 

of  fractional  parts  of  a  day,  the  continuance  of  the  possession 
conimences  the  day  following  that  of  the  entry  ;  so  that  in  the 
computation  of  the  three  years  that  day  is  excluded.^  The  pos- 
session commences  on  the  day  of  entry,  although  the  certificate 
be  not  recorded  till  afterwards.^  If  the  entry  was  before  breach 
of  the  condition,  the  time  limited  for  redemption  does  not  com- 
mence to  run  until  the  condition  is  broken,  and  notice  in  writing 
given  by  the  mortgagee  that  he  will  from  that  time  hold  the 
premises  for  a  breach  of  the  condition,  or  a  new  and  formal  entry 
for  breach  of  the  condition  is  made.  A  certificate  of  such  notice 
or  new  entry  must  be  recorded.^ 

If  a  mortgagee  or  his  assignee,  while  a  writ  of  entry  for  the 
foreclosui'e  of  the  mortgage  is  pending,  enter  for  the  purpose  of 
foreclosure,  and  hold  possession  of  the  premises  until  the  writ  of 
possession  is  issued  in  the  suit,  he  may  justify  his  possession  as 
"by  process  of  law"  under  the  statute,  as  commencing  at  the 
date  of  such  writ ;  and  the  foreclosure  will  be  complete  in  three 
years  from  that  time.*  If  the  action  for  possession  be  brought 
after  an  entry  in  pais,  and  judgment  is  obtained  and  possession 
delivered  upon  the  execution,  the  three  years  will  run  from  the 
time  of  delivery  of  possession  vuider  the  execution.^ 

In  Maine,  when  foreclosure  is  effected  under  provision  of  stat- 
ute by  the  publication  of  notice  of  an  entry  to  foreclose,  the  lim- 
itation of  tiiree  years  for  redemption  runs  from  the  first  publica- 
tion of  notice.^ 

In  New  Hampshire  the  limitation  of  one  year  runs  from  the 
time  of  entry,  if  notice  of  it  is  published  as  provided  by  statute.^ 

1  Fuller  V.  Russell,  6  Gray,  128.  the  publication  of  a  notice  by  a  mortRftgee 

2  Thompson  v.  Vinton,  121  Mass.  139.       already  in  possession,  stating  that  from  a 
8  Gen.  Stat,  of  Mass,  c.  140,  §§  10,  11,     certain  day  he  will  hold  for  the  purpose 

adopting  the  law  as  laid  down  in  Pomeroy  of  foreclosure.     Gen.  Stat.   18G7,  c.    122, 

V.  Winship,  12  Mass.  51.3  ;  Scott  v.  McFar-  §  14.     See  supra. 

land,  13  Mass.  .309„3I3  ;  Ayres  v.  Waite,  ^  Hurd  v.  Coleman,  42  Me.  182. 

10  Gush.  72,  78;  Merriam   v.  Merriam,  6  ^  Fay  v.  Valentine,  5    Pick.  418;    Pago 

Ciish.  91  ;  Erskine  v.  Town.eend,  2  Mass.  v.  Robinson,  10  Gush.  99,  101. 

49.'-) ;  Hunt  v.  Stiles,  10  N.  H.  406;  Wil-  «  Rev.  Stat.  1871,  c.  90,  §§5.  6.      See 

lard  V.  H.nry,  2  X.  II.  120.  Ilolbrook  v.  Thomas,  38  Me.  2.56. 

In  New   Hampshire,    a.s    already   seen,  '  Gen.  Stat.  1867,  c.  122,  §  14  ;    IIow- 

thero  is  a  special  provision  of  statute  for  ard  i;.  Handy,  3.5  N.  11.  315. 

2G7 


§§  1203,  1264. J       FOIUXLOSURU   by    entry    and    I'OSSKSSION. 

8.    Record  of  the   Certificate. 

1263.  The  certificate,  whether  made  by  the  mortgagor  or 
by  the  witnesses,  must  be  recorded  within  the  time  specified  by 
statute,  (o  render  it  elTeetual  as  evidence  of  the  entry.  The  rec- 
ord of  the  eerlitieate  being  all  the  notice  of  the  entry  required  to 
be  given,  it  is  essential  that  the  record  be  made  as  required,  or 
the  certificate  is  wholly  inoperative. ^  If  the  date  of  the  entry 
be  not  stated  the  certificate  is  insufficient,  although  this  be  dated 
and  recorded,  for  it  is  not  certain  that  the  record  was  made  within 
thirty  days  from  the  time  of  the  entry .^  When  so  recorded  it 
is  constructive  notice  of  the  entry  to  all  persons  who  claim  by 
any  title  acquired  subsequently  to  the  mortgage. ^  It  is  sufficient 
evidence  of  an  eviction  of  the  holder  of  the  equity  of  redemption 
to  enable  him  to  sustain  an  action  against  his  grantor  for  breach 
of  a  covenant  of  warranty.* 

9.    Uffect  of  the  Foreclosure  upon  the  ^lortgage-  Debt. 

1264.  The  foreclosure  when  complete  operates  as  payment 
of  the  debt  to  the  extent  of  the  value  of  the  land  at  the  time  when 
the  foreclosure  became  absolute."  It  has  the  effect  of  a  payment, 
and  makes  absolute  the  title  of  the  mortgagee,  although  the  note 
secured  was  void  for  any  reason  ;  as,  for  instance,  a  note  given 
for  the  price  of  intoxicating  liquors  sold  in  violation  of  law,  and 
therefore  void  by  statute.*^  In  such  case,  although  the  mortgage 
could  not  be  enforced,  and  the  owner  of  the  equity  of  redemp- 
tion could  have  defeated  it  at  any  time  before  the  foreclosure 
was  completed,  yet,  the  mortgagee  having  entered  and  kept 
possession  till  the  right  to  redeem  is  foreclosed,  he  then  has  an 
absolute  title;  and  the  land  is  applied  by  operation  of  law  to  the 
payment  of  the  debt. 

1  Bobbins  v.  Rice,  7  Gray,  202  ;  South-  ^  See  §  952;  Smith  v.  Packard,  19  N. 
ard  V.  Wilson,  29  Mc.  56  ;  Potter  v.  Small,     H.  575. 

47  Me.  293.  *  McLaughlin  v.  Cosgrove,  99  Mass.  4, 

2  Freeman  v.  Atwood,  50  Me.  473.  per  Mr.  Justice  Chapman.     "  In   a  case 
'  Lennon   v.  Porter,  5  Gray,  318,  319  ;     like  the  present,  it  is  as  if  the  mortgagor 

Robbins  v.  Rice,  supra.  had    purchased    the  liquors  and  paid  for 

*  Furnas  v.  Durgiu,  119  Mass.  500.  them   by   an    absolute  conveyance  of  the 

land."     See  §  617. 
268 


WAIVER    OF   ENTRY   AND    FORECLOSURE.       [§§  1265,  1266. 

10.    Waiver  of  Eiitry  and  Foreclosure. 

1265.  By  express  or  implied  agreement.  —  An  entry  to  fore- 
close, or  a  foreclosure,  when  completed,  may  be  waived  by  the 
express  agreement  of  the  parties,  or  by  facts  from  which  such 
agreement  may  be  inferred.  It  is  waived  by  the  mortgagee's 
giving  a  bond  just  before  the  completion  of  the  possession,  with 
condition  to  discharge  the  mortgage  upon  payment  of  the  debt 
at  a  future  day  ;  ^  or  by  giving  an  agreement  that  if  the  debt  be 
paid  by  a  certain  time  no  advantage  shall  be  taken  of  the  fore- 
closure ;-  or  by  stipulating  in  writing  to  reconvey  whenever  the 
debt  should  be  satisfied  out  of  the  rents  and  profits,  or  in  any  other 
way  ;  ^  or  by  promising  to  allow  the  mortgagor  six  months  for  re- 
demption after  the  exjjiration  of  the  regular  time  limited,*  or  by  a 
statement  made  a  month  before  the  time  of  redemption  would  ex- 
pire that  he  would  give  some  time,  but  would  not  wait  long  with- 
out taking  advantage  of  the  mortgage.^ 

In  all  cases,  however,  when  the  waiver  is  not  absolute,  but  is 
for  a  limited  time,  advantage  can  be  taken  of  it  only  within  the 
time  limited.^  The  condition  of  the  waiver  or  extension  must  be 
complied  with."  An  express  waiver  of  entry,  fhough  executed 
under  seal,  is  not  effectual  unless  it  is  delivered  to  the  holder  of 
the  equity  of  redemption.^ 

If  the  mortgagor  remains  in  occupation  of  the  mortgaged  prem- 
i.ses  for  many  years  after  the  expiration  of  the  time  of  redemption, 
and  pays  taxes  upon  them,  and  interest  to  the  mortgagee,  these 
facts  are  consistent  only  with  the  relation  between  the  parties  of 
mortgagor  and  mortgagee,  and  justify  the  conclusion  that  the 
mortgage  has  not  been  foreclosed.^  Giving  permission  to  the 
mortgagor  to  cut  tiniber  on  the  mortgaged  land,  and  receiving 
stampage  from  him,  is  not  inconsistent  with  the  further  prosecu- 
tion of  foreclosure  by  notice  in  the  newspapers  in  the  mode  per- 
mitted by  statute  in  Maine,  as  this  mode  does  not  involve  the  act- 
tual  possession  of  th»',  i)reniises  by  the  mortgagor.^'' 

1266.  An  assignment    of   a  mortgage    after   an    entry   does 

1  Joslin  I'.  Wymtin,  9  Gray,  f)3.  **  Danforth  v.  Roberts,  supra. 

«  McNiel  V.  Call,  19  N.  H.  403,  416.  ''  Clark  v.  Crosby,  101  Mass.  184. 

'  Quint  V.  Little,  4  Greenl.  495.  »  Cuttsv.  York  Maniif.  Co.  14  Mo.  326. 

*  Cha.'ic  V.  McI^Uim,  49  Me.  375.  »  Trow  v.  Berry,  113  Mass.  139. 

*  Danforth  v.  Roberts,  20  Me.  307.  i'^  Smith  v.  Larral>ec,  58  Me.  361. 

269 


§  l-li".]  I'OKKCLOSURE    BY    ENTRY    ANP    POSSESSION. 

not  of  itself  stay  the  foreelosiire.  Tlie  assignee  takes  all  the 
benefits  of  the  entry  and  possession.^  An  assignment  of  both 
the  mortgage  and  note,  after  the  expiration  of  three  years  from 
the  entry  to  a  snbseqnent  mortgagee,  is  no  release  of  the  fore- 
closnre.'"^ 

Foreelosnre  is  not  waived  or  postponed  by  an  assignment  of  the 
mortgage  before  the  expiration  of  the  time  of  redemption  to  one 
who,  at  the  reqnest  of  the  mortgagor,  pays  the  mortgagee  the 
amonnt  of  the  mortgage,  and  agrees  orally  with  the  mortgagor  to 
hold  the  estate  subject  to  such  advance  for  the  use  of  the  mort- 
gagor, and  to  permit  him  to  sell  the  land  in  lots  and  pay  over  the 
proceeds,  or  to  redeem  on  paying  the  amount  so  advanced  at  any 
time.3  The  assignee  in  such  case  takes  all  the  legal  rights  of  the 
mortgagee  and  the  foreclosure  goes  on.  He  holds  the  property 
under  no  resulting  trust,  because  the  consideration  is  wholly  paid 
by  him  ;  and  under  no  express  trust,  because  not  declared  in  writ- 
ing. The  agreement  does  not  constitute  a  mortgage,  because  it 
was  not  made  with  one  from  whom  an  absolute  title  was  taken 
simultaneously. 

But  an  assignment  made  for  the  purpose  of  preventing  a  re- 
demption, as,  for  instance,  if  it  be  made  immediately  before  the 
time  of  redemption  would  expire,  so  that  the  mortgagor  does  not 
know  to  whom  to  make  payment,  may  have  the  effect  to  keep  the 
redemption  open  till  a  tender  can  be  made  to  the  assignee  ;  *  and 
even  if  it  be  made  without  such  intent,  it  may  have  the  effect  to 
keep  the  equity  open  until  the  mortgagor  can  find  the  assignee 
and  offer  to  perform  the  condition.^ 

1267.  The  waiver,  to  be  effectual,  must  be  by  the  holder 
of  the  mortgage.  One  who  has  not  acquired  any  interest  in 
the  mortgage  cannot  by  his  agreement  extend  the  time  of  re- 
demption beyond  the    period   when  it  would  otherwise  be  fore- 

1  Dcming  v.  Comings,  11  N.  H.  474;  suit  was  pending  the  three  years  expired, 
Hill  f.  More,  40  Me.  515;  Hiird  v.  Cole-  but  the  mortgagor  subsequently  abandoned 
man,  42  Me.  182;  Cutts  v.  York  Manuf.  the  suit.  The  second  mortgagee  by  the 
Co.  14  Me.  326.  assignment  succeeded  to  all  the  rights  of 

2  Thompson  v.  Kenyon,  100  Mass.  108.  the  first  mortgagee,  and  held  the  land  by 
The  assignment  in  this  case  was  by  a  quit-  an  indefeasible  title  under  a  completed 
claim  deed  for  a  consideration  equal  to  the  foreclosure. 

amount  due  on  the  first  mortgage  and  in-  ^  Capen  v.  Richardson,  7  Gray,  364. 

terest  accrued.      The  mortgagor  had  filed  *  McNiel  v.  Call,  19  N.  H.  403.  414. 

a  bill  in  equity  to  redeem  just  before  the  ^  Deming  v.  Con5ings,  11  N.  H.  474. 
expiration  of  the  three  years.      While  the 

270 


WAIVER   OF   ENTRY   AND   FORECLOSURE.       [§§  1268,  1269. 

closed  ;  ^  though  if  he  should  afterwards  take  an  assignment  of 
the  mortgage,  he  would  doubtless  be  concluded  by  this,  and  the 
foreclosure  opened  accordingly.  The  assignee  of  a  mortgage  as- 
signed to  him  by  the  mortgagee  as  security  for  the  payment  of  a 
debt  of  his  may,  after  entering  with  the  knowledge  of  the  mort- 
gagee to  foreclose,  waive  and  release  this  entry  without  the  assent 
of  the  mortgagee.  The  assignee  has  full  control  of  the  remedies 
provided  by  law,  and  may  enter  into  or  relinquish  possession  at 
his  discretion.^ 

If  after  entry  the  mortgagee  be  put  under  guardianship  as  a 
spendthrift,  the  guardian  has  authority  to  restore  possession  to  the 
mortgagor,  to  hold  as  before  the  entry  and  to  prevent  a  foreclos- 
ure.^ Such  restoring  of  possession  will  do  away  with  the  effect 
of  the  entry  and  prevent  foreclosure.* 

1268.  An  entry  does  not  waive  rights  acquired  under  a 
previous  purchase  at  a  sale  under  a  pcwer.  Where  a  mort- 
gagee has  indirectly  become  a  purchaser  at  a  sale  made  under  a 
power  contained  in  the  mortgage,  which  gave  him  no  right  to 
purchase,  and  the  sale  is  for  this  reason  voidable,  he  may  enter 
to  foreclose,  and  record  his  certificate  of  entry  without  waiving  or 
abandoning  any  rights  acquired  by  the  purchase.  The  entry  in 
itself  does  not  show  sucii  intention.^ 

1269.  Receiving  payment  v^orks  a  -waiver.  —  An  entrj'  to 
foreclose  as  well  as  a  foreclosure  itself  is  of  course  waived  by  sub- 
sequently receiving  payment  of  the  mortgage  debt;  ^  or  of  any 
part  of  it ; "  or  by  receiving  articles  which  the  mortgagee  had 
agreed  in  the  condition  of  the  mortgage  to  furnish  in  support  of 
the  UKjrtgagee,  who  continued  to  reside  with  tlie  mortgagor  ;  ^  or 
by  receiving  interest  as  such  on  the  moi'tgage  debt.'-^  But  the 
mere  fact  that  after  the  three  years  payments  are  made  on  ac- 
count of  the  mortgage  debt  will  not  open  the  foreclosure.  Such 
payments  may  Iiave  been  made  because  the  premises  were  not  of 
sufficient  value  to  satisfy  the  debt.  The  intention  of  the  parties 
to  waive  tiie  foreclosure  should  he  shown   by  other  evidence. ^'^     If 

»  Fisher  f.  Shaw,  42  Me.  32.  Gould  v.  White,  26  N.  IL   178;    Green  v. 

«  Cults  V.  York  Manuf.  Co.  14  Me.  .326.  Cross,  45  N.  H.  577. 

»  Bothamy.  M'Intier,  19  Pick.  .346.  ''  And  sec  Winchester  v.  Bull,  54  Mc. 

*  lb.  5.58. 

»  r^-arnrd  v.  Foster,  117  Mass.  .365.  »  Willnrd  v.  Henry,  2  N.  H.  120. 

•  Batcheldcr  v.  Robinson,  4   N.  II.  40;         '  Trow  i'.  Berry,  11.3  Mass.  1.30. 

1''  Lawrence  v.   Fletcher,  10   Met.   344. 
271 


^^  1-270,  1-271.]     F0RKCL0SU1U-:  by  kntry  and  possession. 

tlu'  mortuai^oi',  aftiT  tlu>  I'xpinitioii  of  throe  yoiirs  from  his  entry, 
at  the  request  of  the  mortgagor,  conveys  the  premises  to  a  tliird 
person  by  a  deed  reciting  that  it  is  made  at  the  request  of  the 
mortgagor,  and  is  intended  to  discharge  all  title  acquired  by  the 
mortgagee,  the  grantee  having  paid  the  amount  due  on  the  mort- 
g:\n;e,  the  grantee  takes  a  title  subject  to  redemption  by  the  mort- 
c-ao-or.i  Hut  a  quitclaim  deed  by  a  mortgagee  after  foreclosure 
to  one  of  two  mortgagors,  in  consideration  of  a  sum  equal  to  the 
orifinal  mortgage  debt,  is  not  sufficient  evidence  of  an  opening  of 
the  foreclosure  to  revest  any  title  in  the  other  mortgagor  as  a 
joint-owner.2  After  the  foreclosure  there  was  no  privity  between 
the  mortgagors.  The  grantee  had  as  good  a  right  to  purchase 
as  a  stranger.  The  fact  that  he  paid  a  sum  equal  to  that  due  on 
the  mortgage  at  that  time  is  no  presumption  that  the  transaction 
•was  a  redemption  for  the  benefit  of  both. 

1270.  If  the  payment  be  made  and  received  under  an  ex- 
press understanding  that  the  foreclosure  is  to  be  opened, 
there  can  be  no  question  that  it  is  opened.^  Facts  and  circum- 
stances from  which  an  express  understanding  may  be  clearly  in- 
ferred avail  equally.''  But  the  acts  of  the  parties  will  not  have 
this  effect  when  they  are  such  as  to  leave  their  intention  doubt- 
ful in  this  respect,  or  when  they  may  be  explained  consistently 
with  the  right  of  the  mortgagee  to  retain  the  estate  under  the 
foreclosure.^ 

After  a  mortgagee  has  entered  under  a  judgment  in  an  action 
to  foreclose  the  mortgage,  a  release  of  the  judgment  does  not  of 
itself  operate  as  a  waiver  in  law  of  the  foreclosure,  which  will  be 
complete  if  he  retains  continued,  actual  possession  during  the  time 
provided  by  statute  for  the  purpose  of  foreclosing.  His  possession 
is,  by  virtue  of  his  mortgage  title,  established  by  the  judgment, 
and  not  under  the  process.^ 

1271.  The  entry  is  not  waived  by  the  mortgagee's  render- 
ing an  account  charging  himself  with  rent  for  a  period  after  the 
entry  ; "  nor  by  his  neglect  or  refusal  to  render  an  account  to  the 

In  New  Hampeliire   tlie   mere  receipt   of  ^  Crittenden  v.  Rogers,  8  Gray,  452. 

part  of  the  money  secured  by  the  mort-  »  \)o\\  v.  Moor,  59  Me.  118. 

gat,'eis  held  to  waive  the  foreclosure.     Mc-  ■*  Stetson  v.  Everett,  59  Me.  376. 

Kiel   V.  Call,  19  N.   H.  403;   Deming  v.  *  Lawrence  v.  Fletciier,  8  Met.  153. 

Comings,  11  N.  H.  474;  Moore  v.  Benson,  «  Couch  v.  Stevens,  37  N.  H.  169. 

44  N.  H.  215.  '  Uobbs  V.  Fuller,  9  Gray,  98. 
1  Rangely  v.  Spring,  28  Me.  127. 

272 


WAIVER   OF   ENTRY   AND    FORECLOSURE.       [§§  1272,  1273. 

mortgagor  at  his  request  of  the  amount  due  on  the  mortgage.^  If 
a  mortgagee  in  his  answer  made  in  a  suit  in  equity  to  redeem  the 
mortgage  expressly  waives  all  objection  to  redemption,  upon  pay- 
ment of  all  sums  due  upon  it,  he  cannot  afterwards  claim  that  the 
mortfragfe  had  been  foreclosed  before  the  suit  was  commenced. ^ 

1272.  Conditional  waiver.  —  A  mortgagee  does  not  waive  a 
foreclosure  which  has  already  become  absolute,  or  extend  the  time 
of  redemption,  by  agreeing  to  allow  the  mortgagor  to  redeem  the 
premises  upon  the  payment  before  a  certain  date  of  an  amount 
equal  to  what  was  due  on  the  mortgage  on  that  day,  if  the  agree- 
ment be  not  fulfilled  by  payment  or  tender  of  the  money  within 
the  time  limited.^  And  so  if  a  surety  or  other  person  in  behalf 
of  the  mortgagor  pays  the  conditional  judgment,  and  takes  an 
assignment  of  it  either  before  or  after  the  lapse  of  the  three  years 
from  the  time  possession  was  taken,  under  an  agreement  with  the 
mortgagor  to  assign  it  to  him  if  he  should  pay  the  amount  within 
a  certain  time,  if  the  agreement  be  not  kept  there  is  no  waiver  of 
the  foreclosure,  which  becomes  perfect  in  the  hands  of  the  as- 
signee.* And  so  also  an  agreement  by  the  mortgagee  to  sell  his 
foreclosure  title  to  the  mortgagor  for  the  amount  of  the  mort- 
gage debt  to  be  paid  within  a  certain  time  is  not  sufficient  to  open 
the  foreclosure.^ 

1273.  The  entry  is  not  waived  by  the  mortgagee's  bringing 
a  writ  of  entry  against  a  tenant  at  will  of  the  mortgagor,  and  ob- 
taining judgment  for  possession,  although  in  such  a  writ  the  de- 
mandant describes  himself  as  out  of  possession,  and  the  tenant 
as  wrongfully  withholding  possession  from  him.  This  is  only  a 
technical  and  formal  admission  made  for  the  purpose  of  enforcing 
a  convenient  remedy.  It  is  no  admission  that  the  mortgagee  is 
out  of  possession,  or  that  he  waives  the  benefit  of  his  formal 
entry.^  Even  the  bringing  of  a  writ  of  entry  against  the  owner 
of  the  equity  of  redem{)tion  for  the  purpose  of  foreclosure  is  not 
an  abandonment  of  the  possession  previously  taken  ;  "^  but  if  a 
conditional  judgment  bo  entered  and  a  writ  of  possession  issue, 
under  which  the  mortgagee  is  put  in  possession,  this  is  a  waiver  of 

1  Sanborn  v.  Dennis,  9  Gray,  208.  '  Beavln  v.  Gove,  102  Mass.  298  ;  Dev- 

*  Strong  V.  IJIanchnrd,  4  Allen,  .MS.  ens  v.  IJowcr,  G  Gray,  12G ;  Mann  i;.  Earle, 

*  Clark  V.  Crosl.y,  101  Mass.  184.  4  (iray,  299 ;  Mtrriain  c.  Mcrriani,  G  Cuhh. 

*  Worthy  v.  Warner,  119  .Mas.s.  .550.  91  ;  Fletcher  v.  Gary,  lO.'l  Ma.-^s.  475;  I'age 
'  Stetson  V.  Everett,  59  Me.  376.  v.  liobinson,  10  Gush.  99;  Dorrell  y.John- 
6  Fletcher  v.  Gary,  103  Mass.  475.  son,  17  Pick.  2G3. 

VOL.  II.  18  273 


§>^  l'J74,  liITo.j     I'ourA'Losuiuc  nv  kntky  and  possession. 

a  previous  entry. ^  The  briiig'inii;  of  an  aetion  of  trespass  for  waste 
against  the  mortgagor  is  not  an  abandonment  of  a  previous  entry 
to  foreclose.^  A  mortgagee  after  commencing  a  foreclosure  bj^ 
publication  uiuler  the  statutes  of  Maine  may  enter  and  take  pos- 
session oi  the  premises  without  waiving  the  proceetlings  to  fore- 
close;'' and  if  he  is  ousted  of  his  possession  after  such  entry  he 
may  maintain  a  writ  of  entry  at  common  law,  and  obtain  judg- 
ment for  possession,  without  waiving  the  foreclosure  commenced 
by  publication.* 

1274.  A  recovery  of  judgment  for  the  mortgage  debt  or  any 
part  of  it  after  foreclosure,  on  the  ground  that  the  value  of  the 
premises  at  the  time  of  the  foreclosure  was  less  than  the  sum  due, 
opens  the  foreclosure.^  A  I'ecovery  of  judgment  against  the  mort- 
gagor for  rent  of  the  premises  during  the  three  years  after  entry 
operates,  like  a  recovery  of  judgment  for  the  debt,  to  open  the 
foreclosure.'' 

After  foreclosure  is  complete,  a  promise  or  agreement  made  by 
the  mortgagee  to  receive  the  debt  and  release  the  land  cannot  be 
enforced  unless  made  on  a  legal  and  sufllicient  consideration.^ 

1275.  If  by  accident  or  mistake  the  time  of  redemption  goes 
by,  the  person  entitled  to  redeem  must  not  delay  in  seeking  relief. 
Ordinarily  the  foreclosure  of  a  mortgage  by  entry  and  three  years' 
possession  is  conclusive,  both  in  law  and  equity,  and  will  not  be 
disturbed  without  good  cause  shown.  Where  a  bill  in  equity  to 
redeem  was  brought  on  the  day  before  foreclosure  would  have 
become  absolute,  and  by  reason  of  being  brought  in  the  wrong 
county  was  dismissed,  and  there  was  no  tender,  or  agreement  to 
extend  the  time  of  redemption,  the  court  refused  to  open  the  fore- 
closure on  a  new  bill  brought  nearly  a  year  after  the  dismissal  of 
the  former  one.*^ 

1  Fay  V.  Valentine,  5  Pick.  418;  Smitii  <>  Massachusetts  Gen.  Stat.  1860,  c.  140, 

V.  Kelley,  27   Me.  237  ;  Tufts  v.  Maines,  §  33.     Suit  to  redeem  must  be  brought 

51  Me.  393.  within  one  year  after  tlie  recovery  of  the 

*  Page  V.  Robinson,  10  Cush.  99.  judgment. 

3  Concord   U.  Mut.  Ins.   Co.  v.  Wood-         "  Morse  v.  Merritt,  110  Mass.  458. 
bury,  45  Me.  453.  ''  Smalley  v.  Hicok,  12  Vt.  153. 

*  Stewart  v.  Davis,  63  Me.  539.  ^  "Webb  v.  Nightingale,  14  Allen,  374. 

274 


CHAPTER  XXIX. 


FORECLOSURE   BY  "WRIT   OF   ENTRY. 


I.  Nature   of    and   where    used,    1276- 

1279. 
II.  Who  may  maintain,  1280-1289. 
III.  Against   whom   the   •action   may   be 
brought,  1290,  1291. 


IV.  The  pleadings   and   evidence,  1292- 
1295. 
V.  The  defences,  1296-1303. 
VI.  The  conditional  judgment,  1306-1316 


9.  Nature  of  and  where  used. 

1276.  The  process  of  foreclosure  by  a  writ  of  entry  as  used 
in  Massachusetts  and  Maine,  altliough  in  form  a  suit  at  law,  is 
in  effect  a  bill  in  equity.  When  used  for  this  purpose  the  tech- 
nical rules  applicable  to  this  action  at  common  law  are  not  in  all 
respects  followed.  A  judgment  does  not  necessarily  give  posses- 
sion ;  it  provides  for  this  only  upon  the  default  of  the  owner  of 
the  equity  of  redemption  to  perform  the  condition  of  the  mortgage 
within  a  specified  time.  The  amount  due  on  the  mortgage  for 
which  conditional  judgment  is  entered  is  ascertained  according  to 
equity  and  good  conscience,  and  by  the  same  rules  as  this  amount 
is  determined  in  a  bill  in  chancery  to  redeem  the  same  mortgage  ; 
insomuch  that  such  conditional  judgment  is  conclusive  evidence, 
on  the  hearing  of  a  subsequent  bill  to  redeem  the  same  mortgage, 
of  the  amount  due  on  it.^ 

This  process  is  used  only  in  those  states  in  which  foreclosure  is 
effected  l)y  entry  in  pais  and  possession. 

1277.  In  Massachusetts  ^  and  Maine,^  instead  of  possession 

1  Hoibrook  I'.  ]{liss,9  Allen,  69;  Fletcli-  '^  (1.  S.  c.  IJO,  §§  1-11. 
er  V.  Cary,  103  MiisH.  475,  479;  I'aimer  i;.  In  Massachusetts,  by  tlic  Trov.  Stat. 
Fowley,  ."i  Gray,  54.'');  Sjmrhawk  v.  Wills,  of  10  W.  3,  c.  14,  entitled  "An  act  for 
.'>  Gray,  427  ;  Walcutt  r.  Spencer,  14  Miis.s.  hearing  and  determining  of  ca,ses  in 
409  ;  Arnidown  v.  I'eck,  1 1  Met.  467  ;  equity,"  the  courts,  in  all  cases  of  "  forfeit- 
Peck  V.  Ilapgood,  10  Met.  173;  Dotcn  v.  ure  of  estates  on  condition,  executed  by 
Hair,  16  Gray,  149.  deed  o£  mortgage,  or  bargain  and  sale, 

»  Rev.  Stat.  1871,  c.  90,  §§  7,  8,  10,  12  ;  Laws,  1872,  c.  18. 

275 


§  1:278.]  FORECLOSURE    BY    WRIT    OF   ENTRY. 

obtained  by  entry,  the  mortgagee  may  recover  possession  by  writ 
of  entry,  declaring  on  his  own  s(Msin,  stating  that  it  is  in  mort- 
gage, and  if  it  ai>pe:irs  that  he  is  entith'd  to  possession  for  breach 
of  the  condition,  the  conrt  on  motion  of  either  party  awards  a 
conditional  judgment,  if  the  defendant  be  the  mortgagor  or  any 
one  claiming  under  him,  that  if  he  within  two  months  after  the 
judgment  pays  to  the  plaintiiT  the  sum  found  due  on  the  mort- 
gage with  interest  and  costs  the  mortgage  shall  be  void  ;  other- 
wise that  the  plaintiff  shall  have  his  execution  for  possession.  If 
but  part  of  the  mortgage  money  is  due,  or  the  condition  of  the 
mortgage  be  for  the  doing  of  any  other  thing,  the  terms  of  the 
judgment  are  varied  as  the  case  may  require.^ 

The  action  may  be  brought  by  an  assignee  of  the  mortgagee, 
and  after  his  death  by  his  executor  or  administrator.  It  may  be 
brought  against  whoever  is  tenant  of  the  freehold,  and  the  mort- 
gagor may  in  all  cases  be  joined  as  a  defendant  whether  he  then 
has  any  estate  in  the  premises  or  not ;  but  he  is  not  liable  for 
costs  when  he  has  no  estate,  and  makes  no  defence  to  the  suit. 
Possession  obtained  in  this  way  must  be  continued  for  three 
years  to  foreclose  the  right  of  redemption. 

1278.  In  New  Hampshire,  also,  possession  may  be  obtained  by 
a  writ  of  entry  ;  and  when  so  obtained  no  notice  by  publication, 
as  in  the  case  of  an  entry  in  jjciis,  is  necessary.  Actual  posses- 
sion continued  one  year  completes  the  foreclosure.^  The  process 
should  be  against  the  party  in  possession  claiming  title.^  The 
judgment  is  conditional,  that  if  the  mortgagor  shall  pay  the  sum 
found  due  within  two  months  after  judgment  rendered,  with  in- 
terest, the  judgment  shall  be  void,  otherwise  a  writ  of  possession 
shall  issue.* 

with   defeasance,"   were   empowered   "to  within  two  months'  time  after  judgment 

moderate   the   rigor  of  the   law,  and   on  entered  up  for  discharging  of  such  mort- 

consideration  of  such  cases  according  to  gage  or  sale ;  or  that  the  plaintiff  recover 

equity  and   good   conscience,  to  chancer  possession  of  the  estate  sued  for,  and  exe- 

the  forfeiture,  and  enter  up  judgment  for  cution  be  awarded  for  the  same."    Prov. 

the  just  debt  and  damages,  and  to  award  Stat.  (ed.  1726)  109.     This  was  rcenacted 

execution  accordingly  ;  only  in  real  actions  in  1785.     St.  1785,  c.  22,  §  1. 

upon  mortgage,  or  bargain  and  sale,  with  ^  See  Stewart  v.  Clark,  11   Met.  389; 

defeasance,  the  judgment  to  be  conditional  Holbrook  v.  Bliss,  9  Allen,  69,  73. 

that  the  mortgagor  or  vendor,  or  his  heirs,  ^  G.  L.  1878,  c.  136,  §  14. 

executors,  or  administrators,  do  pay  unto  "  Green  v.  Cross,  45  N.  H.  578. 

the  plaintitf  such  sum  as   the  court  shall  *  G.   S.  c.  112,  §   14;  c.  2)3,  §   12;  G. 

determine   to    be   justly  due    thereupon,  L.  1878,  c.  232,  §  12. 

276 


WHO   MAY   MAINTAIN.  [§§  1279-1281. 

1279.  In  Rhode  Island,  instead  of  a  writ  of  entry  for  obtain- 
ing possession  of  the  mortgaged  premises,  an  action  of  ejectment, 
or  of  trespass  and  ejectment,  is  used  for  the  purpose.  In  such 
action,  where  a  right  of  redemption  is  shown,  the  court  ascertains 
the  sum  due  on  the  mortgage,  and  renders  a  conditional  judg- 
ment, that  if  the  mortgagor,  his  heirs,  executors,  administrators, 
and  assigns  shall  pay  to  the  plaintiff,  or  deposit  in  the  clerk's 
office  for  him,  the  sum  adjudged  due,  within  two  months  from 
the  entry  of  the  judgment,  with  interest,  then  the  mortgage  shall 
be  void,  otherwise  that  the  plaintiff  shall  have  his  writ  of  pos- 
session.^ 

2.    Who  may  maintain. 

1280.  A  legal  interest  in  the  realty  is  essential  to  sustain 
a  writ  of  entry  to  foreclose  a  mortgage.  The  action  must  there- 
fore be  brought  by  the  mortgagee,  or  his  assignee,  or  by  the  per- 
sonal representatives  of  the  holder  of  the  mortgage,  upon  his 
decease.  The  plaintiff  must  hold  the  legal  estate  at  the  time  he 
brings  the  action,  and  it  is  immaterial  that  he  holds  the  title  for 
the  benefit  of  another  ;  a  cestui  que  trust  cannot  maintain  the  ac- 
tion.2  If  the  plaintiff  be  the  assignee  of  the  mortgage,  he  must 
show  a  formal  assignment  of  the  mortgage  to  himself.  An  equi- 
table assignment  merely  is  not  sufficient.  Therefore,  one  who 
holds  a  mortgage  note  by  indorsement  alone,  without  an  assign- 
ment of  the  mortgage,  cannot  maintain  the  action  in  his  own 
name.  He  has  at  most  only  a  resulting  trust  in  the  mortgage 
title.'^  The  mortgagee  after  such  indorsement,  although  holding 
only  a  barren  fee  without  beneficial  interest,  is  presumed  in  the 
absence  of  any  agreement,  or  anything  to  indicate  the  intention 
of  the  parties,  to  hold  such  title  in  trust  for  the  indorsee,  to 
whom  it  would  be  of  value  ;*  and  the  mortgagee  might  maintain 
a  writ  of  entry  to  foreclose  for  the  benefit  of  such  assignee  at  his 
request.  In  some  states  the  mere  transfer  of  the  note  is  held  to 
carry  with  it  the  mortgage  security,  and  the  right  to  enforce  that ; 
but  the  remedy  in  those  states  is  an  equitable  one  and  not  by  writ 
of  <'ntry. 

1281.  After  assignment.  —  Although  a  mortgagee  who  has 
formally  assigned  his  mortgage  cannot  proceed  to  foreclose  it,  and 

'  Gen.  Slat.  1872,  c.  205,  §  7.  "  .Tolinson    v.    Brown,   31    N.   II.    401;; 

'  Somes    V.    Skinner,    16    Mass.    348  ;     Yount;  i>.  Miller,  snprn. 
Young  V.  Miller,  6  Gray,  l.'>2,  154.  *  Johnson  v.  Brown,  supra. 

277 


§  1282.]  FORl-XLOSURE   BY    WRIT    OF   ENTRY. 

a  jiulgmont  obtaiiuul  by  liim  would  bo  nugatory,^  yet  if  ilio  as- 
signee reimlovse  and  redeliver  the  mortgage  with  the  assignment 
canceUed,  it  never  having  been  recorded,  he  may  still  maintain 
the  action.-  By  the  cancellation  of  the  assignment  it  is  rendered 
useless  and  inelTectual  to  the  assignee,  and  the  mortgage  remains 
in  full  force  and  ciTect  in  the  mortgagee,  who  alone  has  any  inter- 
est in  it,  or  any  right  to  enforce  it. 

1282.  A  mortgagee  who  has  made  an  assignment  absolute 
in  form,  but  really  intended  as  security  for  a  debt,  may  never- 
theless maintain  an  action  to  foreclose  the  mortgage,  where  the 
nature  of  the  transaction  is  shown  by  an  acknowledgment  by  the 
assignee  that  he  has  "  received  full  satisfaction  for  the  debt  se- 
cured by  the  above  assignment."  This  acknowledgment  relates 
back  to  the  time  of  the  making  of  the  assignment,  and  is  conclu- 
sive evidence  of  an  agreement  then  made  by  the  assignee  to  re- 
assign. The  acknoAvledgment  is  a  defeasance  of  the  assignment, 
and  the  whole  transaction  a  mortgage  of  a  mortgage.^ 

The  mortgagee  who  holds  the  legal  title  under  the  mortgage 
may  maintain  the  writ  in  his  own  name  alone,  although  the  secu- 
rity is  partly  for  the  benefit  of  other  persons  mentioned  in  the 
deed  ;  as  where  a  father  conveys  his  homestead  to  his  son,  and 
takes  a  mortgage  back  in  his  own  name,  to  secure  the  mainten- 
ance of  himself  and  wife,  and  also  the  payment  to  other  children 
of  certain  sums  as  their  portion  of  their  father's  estate.  He  may 
maintain  the  action  although  the  object  of  it  be  wholly  to  enforce 
the  payment  of  the  sums  due  to  his  children.* 

A  mortgagee  who  has  assigned  his  mortgage  and  note  as  col- 
lateral security  for  a  debt  of  his  own,  and  upon  paying  this  has 
received  a  reassignment  of  the  mortgage,  may  maintain  a  writ  of 
entry  to  foreclose  it,  although  the  note  was  lost  while  in  the  hands 
of  the  assignee.^  It  does  not  matter  that  the  assignee  of  the 
mortgage  also  purchases  the  equity  of  redemption  on  execution 
against  the  mortgagor  ;  as  the.  mortgage  does  not  merge,  and  the 
mortgagee  has  a  remaining  right,  he  may  recover  possession  of 
the  land  by  writ  of  entry,  without  making  actual  entry .^ 

1  Call  V.  Leisner,  23  Mc.  25  ;  Gould  v.     action  in  snch  case  could  not  be  shown  by 
Newman,  6  Mass.  239.  parol.     Lincoln  v.  Parsons,  1  Allen,  388. 

2  Howe  V.  Wilder,  II  Gray,  267.  *  Northy  v.  Nortby,  45  N.  H.  141. 
8  Coffin  V.  Loring,  9  Allen,  154.     But  it         ^  Ward  ;;.  Gunn,  12  Allen,  81. 

would  seem  that  the  nature  of  the  trans-         «  Tuttler.  Brown,  14  Pick.  514. 

278 


WHO   MAY    MAINTAIN.  [§  1283. 

A  deed  by  the  mortgagee,  whether  a  warranty  or  quitclaim, 
passes  his  title  in  the  same  way  that  an  assignment  would,  and 
although  the  notes  secured  by  the  mortgage  are  not  transferred  at 
the  same  time,  the  grantee  may  maintain  a  writ  of  entry  to  fore- 
close the  mortgage,  and  on  producing  the  notes  may  have  a  con- 
ditional judgment.^ 

If  the  mortgage  be  assigned  while  a  writ  of  entry  is  pending, 
the  assignee  may,  by  virtue  of  his  assignment,  prosecute  the  suit 
in  the  name  of  the  mortgagee  for  his  own  benefit  to  final  judg- 
ment, and  enter  under  the  writ  of  possession  when  it  is  issued  in 
the  same  manner  as  the  mortgagee  might  have  done.^ 

An  assignee  may  bring  his  action  for  possession,  although  the 
assignment  to  him  has  not  been  recorded  at  the  time ;  but  it 
would  seem  that  before  trial  of  the  action  it  must  be  recorded,^ 
in  order  to  authorize  its  introduction  in  evidence. 

1283.  One  of  two  or  more  joint  mortgagees  or  assignees  of 
a  mortgage  cannot  alone  maintain  a  writ  of  entry  to  foreclose  the 
mortgage.  All  the  persons  having  a  legal  interest  in  the  mort- 
gage must  join  in  enforcing  it.*  If  it  be  held  by  them  in  trust, 
the  abandonment  of  the  trust  by  one  of  them  does  not  vest  the 
title  in  the  others,  without  deed  or  legal  process  ;  though  on  the 
death  of  one,  the  survivors  succeed  to  the  rights  and  remedies  to 
which  all  of  them  were  before  jointly  entitled.^  If,  however,  a 
mortgage  be  given  to  secure  separate  debts  or  obligations,  each 
mortgagee  is  entitled  to  enforce  his  rights  in  his  own  name  ;  as, 
for  instance,  a  mortgage  given  for  the  support  of  a  father  and 
mother  "  each  and  severally,"  may  be  enforced  by  the  father 
alone.*  When  a  mortgage  is  given  to  secure  several  debts,  the 
obvious  purpose  is  to  give  to  each  security  for  his  particular  debt. 
If  the  mortgagees  hold  separate  notes  secured  by  the  same  mort- 
gage, each  has  a  right  to  enforce  his  claim  under  the  mortgage, 
and  there  is  of  course  no  right  of  survivorship.''  In  New  Hamp- 
shire it  is  held  tliat  the  action  must  be  brought  in  the  names  of  all 
the  holders  of  the  several  notes. ^ 

'  KupKlcs  V.  Barton,  13  Gruy,  506.  ^  Blake  v.  Sanborn,  8  Gray,  154;  Bur- 

2  §  808  ;  Hiird  V.  Coleman,  42  Me.  182.  nett  i;.  Pratt,  22  Pick.  556. 

8  Wolcott  V.  Winchester,  15  Gray,  401,  "  Gilson  i;.  Gilson,  2  Allen,  115. 

466.  '  Burnett  v.  Pratt,  22  Pick.  55Q. 

*  Webster  v.  Vandeventcr,  6  Gray,  428.  "  Noyes  v.  Barnet,  57  N.  II.  605;  John- 
Sec  Dewey  i-.  Brown,  2  Pick.  .'388  ;  Aiken  son  v.  Brown,  31  N.  H.  405;  Page  f. 
V.  Gale,  37  N.  H.  501.  Pierce,  26  N.  II.  317 

279 


§§  1284,  128r>.]       KOHKCLOSURK    BY    WIMT    01'    F.NTUY. 

It  a  iuort<j;ai;t'  lu'  iikhK'  (o  an  iiirinc(ir|>ora(('(l  association,  or  to  a 
firm  by  a  corporate  or  liiiii  uanic,  a  writ  of  entry  to  foreclose  it 
must  bo  bron<]jht  in  the  names  of  the  individuals  who  compose 
the  firm  or  (h>  ])usiness  under  such  general  name.^ 

1284.  Two  mortgages  of  the  same  land  made  by  the  same 
moit<:;a<;or  and  held  by  the  same  assignee,  though  given  at  dilTer- 
ent  times  to  dilYerent  persons,  may  be  embraced  in  one  suit  of 
foreclosure,  and  a  conditional  judgment  for  the  amount  of  both 
debts  may  be  entered. ^  The  judgment  should  properly  specify 
the  amount  due  on  each  mortgage  as  well  as  the  aggregate  amount 
due,  so  that  the  rights  of  any  intervening  third  party  might  be 
determined.  If  the  two  mortgages  embraced  distinct  parcels  of 
land,  or  the  debts  were  due  from  different  persons,  they  cannot 
be  united  in  one  suit  and  consolidated  in  one  judgment.""^ 

1285.  A  second  mortgagee  may  maintain  an  action  to  fore- 
close his  mortgage  against  the  owner  of  the  equity  of  redemption, 
although  such  owner  also  holds  the  first  mortgage.  The  judg- 
ment in  such  case  would  be  valid  and  effectual  to  foreclose  the 
second  mortgage  as  against  all  titles  subsequent  to  it,  but  qual- 
ified as  to  disturbing  the  possession  under  the  prior  mortgage. 
The  first  mortgagee  has  the  right  to  liold  the  estate  under  his 
mortgage  for  the  purpose  of  foreclosure  as  against  the  second 
mortgagee  ;  but  the  second  mortgagee  has  the  right  to  such  pos- 
session as  will  enable  him  to  foreclose  as  against  the  right  to  re- 
deem his  second  mortgage.  The  foreclosure  of  both  mortgages 
*^^y  go  on  at  the  same  time :  the  first  mortgagee  having  such 
possession  as  will  operate  to  foreclose  against  the  right  of  the 
second  mortgagee  to  redeem  ;  and  the  second  mortgagee  having 
such  constructive  possession  as  will  operate  to  foreclose  against 
the  right  to  redeem  the  estate  from  his  mortgage.  The  possession 
of  each  operates  according  to  his  rights.* 

In  such  case  it  is,  of  course,  immaterial  that  the  owner  of  the 
equity  of  redemption,  besides  holding  the  first  mortgage,  holds  a 
third  mortgage  or  any  other  interest  in  the  property.  Under  the 
execution  the  second  mortgagee  may  be  put  temporarily  in  pos- 

1  Pomeroy    v.   Latting,   2   Allen,   221.         »  Peck  v.  Hapgood,  10  Met.  172. 

The  mortgage  in  this  case  was  to  "  The  *  Kilborn   v.   Robbins,    8   Allen,   466  ; 

Copake  Iron  Works,"  a  partnership.  Cronin  v.  Hazletine,  3  Allen,  324  ;  Doten 

2  Pierce  v.  Balkam,  2  Cush.  374.     See,  v.  Hair,  16  Gray,  149.    See  Palmer  v.  Fow- 
also,  Grant  v.  Galway,  122  Mass.  135.  ley,  5  Gray,  545. 

280 


WHO    MAY    MAINTAIN.  [§  1286. 

session  without  an  actual  ouster  of  the  first  mortgagee,  and  such 
possession  will  foreclose  all  titles  subsequent  to  the  second  mort- 
gage.^ It  is  all  the  same  whether  the  first  mortgagee  be  in  pos- 
session under  an  entry  in  pais,  or  by  virtue  of  a  writ  of  possession 
issued  under  a  conditional  judgment  for  foreclosure.^ 

A  mortgagee  of  a  remainder  or  reversion  may  in  like  manner 
maintain  such  action  during  the  lifetime  of  the  tenant  of  the  par- 
ticular estate.^  In  such  case  the  tenant  cannot  be  dispossessed, 
but  the  officer  may  under  the  execution  deliver  possession  as 
against  the  mortgagor,  so  as  to  divest  him  of  all  his  legal  title  in 
the  land.  One  joint-owner  of  the  equity  of  redemption,  on  re- 
ceiving an  assignment  of  the  mortgage,  may  maintain  a  writ  of 
entry  and  recover  a  conditional  judgment  against  the  other.* 

1286.  Homestead  right.  This  action  may  be  maintained  and 
judgment  may  be  rendered  thereon  and  formal  possession  taken, 
although  there  be  an  outstanding  estate  of  homestead.  The  entry 
thus  made  is  sufficient  to  bar  the  right  in  equity  to  redeem  the 
reversionary  estate  after  the  expiration  of  three  years,  though 
subject  to  the  full  enjoyment  of  the  homestead  estate.^ 

If  the  homestead  right  has  been  released  in  the  mortgage,  it  is 
no  defence  to  the  writ  of  entry  to  foreclose  the  mortgage  that  the 
estate  is  sufficient  to  satisfy  the  mortgage,  without  having  re- 
course to  the  homestead.®  "  The  power  of  a  court  of  chancei-y  to 
compel  a  mortgagee  to  resort  in  the  first  instance  to  one  of  sev- 
eral estates  mortgaged  is  exercised  only  for  protection  of  the  equi- 
ties of  different  creditors  or  incumbrancers,  or  of  sureties,  and  not 
for  the  benefit  of  the  mortgagor.  As  against  him,  the  mortgagee 
lias  the  right  to  enforce  the  contract  between  them  according  to 
its  terms,  and  is  not  obliged  to  elect  between  different  remedies 
or  securities.  The  right  of  homestead,  created  by  our  statutes, 
is  certainly  entitled  to  no  higher  degree  of  favor  than  the  courts 
have  always  accorded  to  the  common  law  right  of  dower.  The 
case  cannot  be  distinguished  in  principle  from  the  ordinary  one 
in  which  a  wife,  who  has  joined  by  way  of  releasing  dower  in  the 
mortgage  of  lier  husband,  is  held  to  pay  the  whole  mortgage  debt 

I  Cronin  v.   ILizletinc,   3  Alien,   324;         ♦  Aiken  y.  Giile,  37  N.  II.  501. 
George  v.  Baker,  3  Allen,  326.  '  Doyle  v.  Coburn,  6  Alkn,  71. 

a  Amiilown  v.  Peck,  11  Met.  46'J  ;  Wul-         «  Searle  v.  Chapman,  121  Mass.  17.   See 

cutt  V.  Spencer,  14  Ma.ss.  409.  §§  731,  1632. 

'  I'enniman  v.  Hollis,  13  Mass.  429. 

281 


§§  1287-1280.]       FOHKCLOSURK    BY    WKIT    OF    KN  IKY. 

jvs  a  fonditiDn  of  asserting  Iht  right  of  dower  against  the  mort- 
gagfi'."'  1 

1287.  Prior  entry  to  foreclose  no  objection.  —  A  mortgagee 
wlu)  has  iM»t(M'oil  to  fori'cKise  in  the  presence  of  Avitnesses,  and 
still  remains  in  possession,  may  nevertheless  maintain  a  writ  of 
entry  against  the  mortgagor  to  foreclose  the  mortgage ;  ^  and 
such  previous  possession  is  not  waived  or  abandoned  by  the  com- 
mencement of  the  action  ;  ^  though  it  is  upon  delivery  of  posses- 
sion to  the  mortgagee  upon  an  execution  issued  on  the  judgment 
obtained  in  such  action.* 

The  fact  that  a  mortgage  contains  a  power  of  sale  is  no  objec- 
tion to  a  foreclosure  by  writ  of  entry.  The  power  of  sale  is 
merely  a  cumulative  remedy  which  does  not  interfere  with  a  fore- 
closure by  action,  or  by  entry  and  possession.'' 

1288.  If  the  holder  of  the  mortgage  die  before  entry  for 
condition  broken,  the  mortgage,  being  personal  assets,  goes  to  his 
executor  or  administrator,  who  alone  can  maintain  an  action  upon 
it.  His  heirs  have  no  such  interest  as  will  give  them  any  right 
of  possession.^ 

1289.  When  right  of  action  accrues.  —  Unless  it  is  expressly 
stipulated  that  the  mortgagor  may  remain  in  possession,  or  the 
necessary  implication  from  the  deed  is  that  he  may  do  so,  the 
mortgagee  may  at  once,  before  breach  of  the  condition,  and  with- 
out previous  notice  of  the  suit,  maintain  a  writ  of  entry  for  the 
possession.'^  The  provisions  or  conditions  in  the  mortgage  deed 
may  be  such  that  they  will  necessarily  imply  a  covenant  that  the 
mortgagor  may  occupy  so  long  as  he  fulfils  these  conditions,  and 
they  may  thus  constitute  a  good  bar  to  a  writ  of  entry  at  common 
law  to  obtain  possession  ;  ^  thus,  where  the  mortgage  recited  that 
the  mortgagee  had  conveyed  the  premises  to  the  mortgagor  "  for 
the  future  maintenance  and  support  "  of  the  former,  arid  that  the 
mortgagor  had  "  at  the  same  time  reconveyed  the  same  to  the 

1  Per  Gray,  C.  J.,  in  Searle  v.  Chap-  "  Smith  v.  Dyer,  16  Mass.  18  ;  Dewey  v. 
man,  121  Mass.  17.  Van  Deusen,  4  Pick.  19;  Shelton  v.  At- 

2  Beavin  v.  Gove,  102  Mass.  298;  Mer-  kins,  22  Pick.  71.  See  Gen.  Stat,  of  Mass. 
riam  i;.  Merriam,  6  Cush.  91  ;  Devens  v.  c.  96,  §  9  ;  c.  140,  §  7. 

Bower,  6  Gray,  126;  Page  v.  Robinson,         ">  See  §702;  liobart  y.  Sanborn,  13  N. 

10  Cush.  99  ;  Mann  v.  Earie,  4  Gray,  299,  H.  226;  Dearborn  v.  Dearborii,  9  N.  H. 

300;  Gen.  Stat,  of  Mass.  c.  140,  §§  1,  11.  117  ;  Lackey  v.  Plolbrook,   11   Met.  4.58; 

8  Page  V.  Robinson,  su/ira.  Newall  v.  Wright,  3  Mass.  138,  155. 

*  Fletcher  v.  Gary,  103  Mass.  475.  »  Bean  v.  Mayo,  5  Me.  (5  Greuiii.)  89. 

^  Furbish  v.  Sears,  2  Cliff.  454. 

282 


AGAINST   WHOM   THE   ACTION   MAY    BE   BROUGHT.       [§§  1290,  1291. 

mortgagee  as  security  for  such  maintenance  and  support,"  the 
condition  being  that  the  mortgagor  should  support  the  mortgagee, 
it  was  held  to  be  a  necessary  implication  from  these  recitals  that 
the  mortgagor  should  retain  possession  so  long  as  he  performed 
the  acts,  the  performance  of  which  the  mortgage  was  given  to  se- 
cure.i  In  the  absence,  however,  of  anything  in  the  mortgage  to 
show  that  the  mortgagor  is  entitled  to  possession,  it  cannot  be 
shown  by  parol  evidence  that  it  was  agreed  by  the  parties  that 
the  mortgagor  should  retain  possession .^ 

3.  Against  whom  the  Action  may  he  brought. 

1290.  The  tenant  of  the  freehold  is  a  necessary  party  de- 
fendant.3  Action  cannot  be  maintained  against  a  tenant  at  will 
or  for  years,  if  he  is  willing  to  give  up  possession  of  the  premises.* 
If,  however,  such  tenant  refuses  to  yield  possession  when  it  is  de- 
manded of  him,  he  may  be  regarded  as  a  disseisor,  and,  as  against 
the  mortgagee,  the  tenant  of  the  freehold.^  On  this  ground  the 
action  may  be  maintained  against  a  purchaser  of  the  equity  of  re- 
demption after  he  has  conveyed  it  away  again,  but  still  retains 
possession  and  refuses  to  yield  it  on  demand  ;  but  the  judgment 
will  be  for  possession  in  the  ordinary  form,  and  not  a  conditional 
judgment.^ 

The  fact  that  the  mortgagors  were  bUnd,  and  their  father  lived 
with  them,  and  was  the  only  manager  and  efficient  agent  on  the 
premises,  which  he  cultivated  and  improved,  does  not  make  him 
a  tenant  of  the  land  or  liable  to  the  action.^ 

1291.  A  wife  who  lias  signed  the  mortgage  merely  in  release 
of  dower  need  not  be  joined  in  the  suit ;  ^  but  if  the  husband  and 
wife  mortgage  her  real  estate  and  continue  in  possession  till  con- 
dition broken,  they  are  rightly  sued  togetlier.^  A  widow  to  whom 
dower  has  been  assigned  in  the  mortgaged  premises,  though  wrong- 
fully, is  a  tenant  of  the  freehold  if  in  possession. ^^ 

>  Wales   V.  Mellen,  1  Gray,    512.     Sec  "^  Johnson  v.   Phillips,    13  Gray,    198; 

§  6Qg,  Wiieelwrighti;.  Frecinnn,  12  Met.  154, 156; 

2  Colman  r.  Packard,  16  Mass.  39.  Keith  i-.  Swan,    11    MaHS.  210;   Hunt  v. 

«  Gen.  Stat,  of  Mass.  c  140,  §  8;  Ucv.  Hunt,  17  Pick.  118,  121. 

Stat,  of  Me.  1871,  c.  90,  §  12.  "  .lohnHon  v.  Phillilis,  snjmi. 

♦  Wheelwright  v.  Freeman,  12  Met.  1.54  ;  '  Churchill  v.  Lorinf,',  19  Piik.  405. 

Unynham  i-.   Snow,  12  Met.  1.57.     Under  »  Pitts  v.  Aldrich,  11  Allen,  39. 

the  early  laws  of  Massachusetts  it   could  «  Swan  v.  Wiswnll,  15  Pick.  126. 

!)€  maintained   auain-.t  ii    i.iiiuit   at   will.  ''   Ilayuham  i;.  Wilmarth,  13  Met.  414. 
Keith  I'.  Swan,  11  Mass.  210. 

283 


§  VJ;»-2.]  KORECLOSUKK    UY    WlilT    OF   KNTUY. 

'riii>  ;u'ti(Mi  cannot  In-  inaintaincd  at^ainst  tli(>  mortgagor  alono 
nfttn-  lu'  lias  (.•onvcvcd  the  cstatt!  to  a  third  person,  and  the  latter 
has  convovi>d  it  to  the  n^Mtgagor's  wife  to  her  sole  and  separate 
use,  although  he  has  continued  to  occupy  the  premises  with  his 
wife.  She  is  the  tenant  of  the  freehold  and  a  necessary  party  to 
the  action.  The  mortgagor's  possession  must  be  deemed  to  be 
permissive  only,  and  subject  to  and  in  the  right  and  interest  of 
his  wife  as  owner  of  the  fee.i  But  if  a  third  person  be  in  actual 
possession  under  a  lease  for  a  term  of  years  by  a  title  paramount 
to  that  of  the  mortgage,  the  action  may  be  maintained  against 
the  owner  of  the  equity  of  redemption.^ 

1292.  The  mortgagor  may  always  be  joined  as  a  defendant, 
although  he  has  parted  with  all  interest  in  the  premises  before 
the  action  is  brought.  If  he  conveys  his  equity  of  redemption 
after  suit  is  commenced  against  him  as  the  tenant  in  possession, 
this  does  not  defeat  the  action,  but  it  may  proceed  to  judgment 
just  the  same.3  All  persons  coming  in  under  him  after  the  suit  is 
commenced  are  bound  by  the  judgment  and  by  the  possession 
taken  under  it.  Were  it  otherwise  the  suit  might  be  wholly  de- 
feated by  successive  alienations;^  and  it  seems  that  those  who 
have  acquired  title  under  the  mortgagor,  after  the  giving  of  the 
mortgage  and  before  the  commencement  of  the  action,  are  equally 
bound  by  the  action,  though  not  joined  as  defendants,  if  the  ex- 
ecution and  the  proceedings  upon  it  are  duly  recorded.^ 

An  action  may  be  maintained  against  a  mortgagor  to  foreclose 
a  mortgage  not  acknowledged  or  recorded,  for  it  conveys  the 
property  as  between  the  parties.^ 

If  the  mortgagor  has  conveyed  the  land  in  separate  parcels  to 
different  persons,  a  writ  of  entry  must  be  brought  against  each 
tenant  holding  in  severalty.  A  judgment  against  one  of  them 
for  the  whole  tract  does  not  foreclose  the  rights  of  the  others.^ 

1  ram^fbell  v.  Betnis,  16  Gray,  485.  «  Howard  Miit.  Loan  &  Fund  Associ- 

2  Whittier  v.  Dow,  14  Me.  298.  ation  v.  Mclntyre,  .3  Allen,  .571. 

8  Straw  V.  Greene,  14  Allen,  206  ;  Hunt  ''  Varnum  v.  Abbot,  12  Mass.  474  ;  Fo9- 

V.  Hunt,   17  Pick.  118;  Wheelwright  v.  dick  v.  Gooding,  1   Me.  .30,  50;  Carll  v. 

Freeman,  12  Met.  154.  Butman,  7  Me.  102.     According  to  a  for- 

♦  Hunt  V.  Hunt,  supra.  mer  practice  the  several  tenants  were  joined 

6  Hunt  u.  Hunt,  8u/>ra;  Robbins  V.Rice,  as  defendants.     4  Dane  Abr.  192.     This 

7  Gray,  202;  Gen.  Stat,  of  Mass.  c.  13-3,  practice  was  corrected  by  Chief   Justice 

§  55.  Parsons,  in  Varnum  v.  Abbot,  supra;  and 


284 


see  Taylor  v.  Porter,  7  Mass.  355. 


THE   PLEADINGS   AND   EVIDENCE.        [§§  1293-1295. 

4.   The  Pleadings  and  Evidence. 

No  attempt  is  made  to  give  any  statement  of  the  pleadings  and 
evidence  applicable  to  this  form  of  action  ;  recourse  must  be  had 
to  the  general  rules  on  these  matters,  and  to  the  practice  of  the 
states  where  this  form  of  foreclosure  is  used.  A  few  points  only 
will  be  noticed. 

1293.  The  declaration  should  allege  the  seisin  to  be  "  in  mort- 
gage." ^  It  should  show  that  a  foreclosure  is  desired,  rather  than 
possession  for  the  purpose  of  taking  the  profits.^  A  judgment 
for  possession  at  common  law  is  entered  unless  a  conditional  judg- 
ment is  asked  for  by  one  of  the  parties  ;  and  if  the  defendant  be 
a  stranger,  or  one  not  claiming  under  the  mortgagor,  the  judg- 
ment will  not  be  conditional  except  with  the  consent  of  the  plain- 
tiff. 

1294.  Answer.  —  Any  specific  matter  of  defence  should  be  set 
up  by  answer.  Under  the  general  issue  the  defendant  is  not  al- 
lowed to  show  that  he  was  not  in  possession  of  the  premises  ;  or 
that  they  are  subject  to  a  mortgage  previous  or  paramount  to 
that  held  by  the  demandant ;  or  that  they  are  in  possession  of 
a  third  party,  who  has  obtained  a  judgment  for  foreclosure  upon 
that  mortgage." 

1295.  Evidence.  —  The  demandant  makes  out  a  primd  facie 
case  by  proving  the  execution,  delivery,  acknowledgment,  and  re- 
cording of  a  mortgage  made  by  a  third  person."*  If  the  demand- 
ant holds  the  mortgage  as  assignee,  he  must  also  prove  the  execu- 
tion and  delivery  of  the  assignment  to  himself,  although  this  be 
not  denied  in  the  plea.^  It  is  not  necessary  to  show  that  the 
mortgagor  owned  the  land  ;  he  cannot  dispute  the  mortgagee's 
title.  On  the  production  of  a  note  signed  by  a  husband  and  wife, 
with  a  mortgage  to  secure  it  assented  to  by  the  husband,  it  is  not 
necessary  to  show  that  she  owned  the  land  in  her  own  right.'' 

1  Gen.  Stat,  of  Ma.ss.  c.  129,  §  3;  c.  140,  stcr  v.  Vandcventcr,  6  firay,  428;  Roch- 
§3.  Sec  Jackson  on  Real  Actions,  with  ester  v.  Whitehouse,  15  N.  II.  468;  Little 
Precedents.  v.  Riley,  43  N.  II.  109. 

2  Fiedler  v.  Carpenter,  2  Wood.  &  M.  »  Amidown  v.  Peck,  11  Met.  4C7  ;  Dcv- 
211  ;  York   Manuf.  Co.  v.  Cutts,  18  Me.  ens  v.  Bower,  6  Gray,  126. 

2fH;  Grantu.  (ialwny,  122  Mass.  135.  See,  ♦  Burridge  v.  Vog\!„  8  Cuih.  183. 

also,  as  to  pleas  hy  the  defendant,  Olney  '>  Wnrncrt;.  Brooks,  14  Gray,  109. 

V.   Adiiins,  7   Pick.  31  ;    Wlicelwrii;ht  v.  »  American  Mut.  Life  Ins.  Co.  i'.  Owen, 

PVeeman,   12  Met.   154;    Richmond   Iron  15  Gray,  491. 

Works  I'.  Woodrufi;  8  Gray,  447  ;    Web-  285 


§  121H!.]  FOKKCI.OSl'UK   iiv    \vi;ir   ov   hntuv. 

Tlu'  Mod'  ov  1)011(1  stH'Ufi'il  by  llu'  mortgage  should  ho  produced, 
although  (>uly  iuiMdeutally  in  nuestion.  If  lost,  the  contents  may 
be  proved,  for  the  purpose  of  showing  the  amount  for  which  con- 
ditional judgnuMit  shall  be  entcMvd.^  If  the  bond  olTered  in  evi- 
dence does  not  correspond  to  that  described  in  the  mortgage  in 
amount  or  date,  the  variance  may  be  explained  by  parol  evi- 
dence.''^    A  breach  of  the  condition  must  of  course  be  shown. 

5.    I'he  Defences. 

1296.  Equitable  defences  allowed.  —  As  already  noticed,  a 
writ  of  entry,  as  used  in  Massachusetts  and  Maine,  for  the  fore- 
closure of  a  mortgage,  is  in  effect  a  suit  in  equity  I'atlier  than  a 
real  action  at  law,  inasmuch  as  the  plaintiff  is  entitled  only  to  a 
conditional  judgment.'^  As  regards  the  defences  that  may  be 
taken  from  the  nature  of  the  proceedings,  these  may  be  equitable 
as  well  as  legal,  unless  the  defendant  sets  up  some  title  other  than 
that  of  mortgagor.  In  that  case  his  claim  of  prior  independent 
title  is  tried  and  decided  as  in  the  ordinary  action  by  this  writ. 
Otherwise  the  suit,  so  far  as  regards  the  amount  of  the  judgment 
and  the  conditional  form  of  it,  very  much  resembles  a  bill  in 
equity  when  used  for  the  same  purpose.  "  The  principal  differ- 
ence between  the  process  in  this  point  of  view  and  the  proceed- 
ings for  the  like  purpose  in  the  English  courts  is,  that  here  our 
statute  fixes  the  time  within  which  the  defendant  shall  pay  the 
sum  found  due  on  the  mortgage,  in  order  to  prevent  the  foreclos- 
ure, instead  of  leaving  it  to  be  limited  in  such  cases  by  the 
courts."  *  The  amount  for  which  the  conditional  judgment  shall 
be  entered  "  is  to  be  ascertained  according  to  equity  and.  good 
conscience,  and  by  the  same  rules  as  on  a  bill  in  chancery  to  re- 
deem the  same  mortgage."^  Such  judgment,  in  fact,  is  conclu- 
sive evidence  of  the  amount  due  on  a  subsequent  bill  to  redeem 
the  same  mortgage.^ 

1  Ward  V.  Gunn,  12  Allen,  81  ;  Grimes  *  Per  Jackson,  J.,  in  Walcutt  v.  Spen- 
V.  Kimball,  3  Allen,  518;  Andrews  v.  cer,  14  Mass.  411  ;  Jackson  on  Real  Ac- 
Hooper,  13  Mass.  472,  475.  tions,  49;  Davis  v.  Thompson,  118  Mass. 

2  Baxter    v.    Mclniire,    13    Gray,    1G8.  497. 

See  Edgell  v.  Staufords,  3  Vt.  202.  6  p^r   Gray,  J.,  in    Holbrook   v.  Bliss. 

8  See  supra,  §   1276.     In   Holbrook  v.  supra.     See,  also,  Freeland  v.   Freeland, 

Bliss,  9  Allen,  C9,  the  history  of  the  law  in  102  Mass.  475. 

this  respect  is  given  in  a  learned  opinion  **  Sparhawk  i'.  Wills,  5  Gray,  427. 
by  Judge  Gray. 

286 


THE  DEFENCES.  [§§  1297,  1298. 

In  general  the  same  defences  may  be  made  to  an  action  to  fore- 
close a  mortgage  that  may  be  made  in  an  action  upon  the  note  or 
other  evidence  of  debt  secured  by  the  mortgage,  excepting  only 
the  defence  of  the  statute  of  limitations ;  ^  for,  as  already  seen,  the 
remedy  on  the  mortgage  remains  good  after  an  action  on  the  debt 
is  barred.^ 

1297.  Want  of  consideration  is  of  course  a  good  defence  ;  for 
in  such  case  there  is  nothing  on  which  to  found  a  conditional 
judgment,^  and  parol  evidence  is  admissible  to  show  that  no  debt 
ever  existed  between  the  parties  to  the  mortgage.*  The  fact  that 
such  a  mortgage  was  given  for  the  purpose  of  defrauding  the 
mortgagor's  creditors  does  not  prevent  his  taking  advantage  of 
the  want  of  consideration.  As  regards  such  fraudulent  purpose 
the  mortgagee  is  in  no  better  condition  than  the  mortgagor,  as  he 
must  have  participated  in  it.^  So  the  fact  that  the  note  and  mort- 
gage were  originally  obtained  by  duress  and  fraud  may  be  shown  ; 
or  that  the  consideration  was  illegal.^  A  hond  fide  assignee  of  the 
note  and  mortgage  before  maturity  might  in  such  cases,  on  the 
general  principles  applicable  to  negotiable  paper,  recover  when 
the  original  mortgagee  or  an  assignee  after  default  could  not.^ 

1298.  Payment  of  the  mortgage  debt,  although  not  made  till 
after  bieach  of  the  condition,  is  of  course  a  defence  to  a  writ  of 
entry  to  foreclose  the  mortgage.  The  receipt  of  payment  is  a 
waiver  of  the  breach  of  condition.  The  mere  legal  estate  is  not 
sufficient  to  support  the  action,  because  after  the  debt  is  paid 
there  can  be  no  conditional  judgment.^  But  the  fact  tliat  no 
money  is  due  upon  the  mortgage  constitutes   no   defence,  if  the 

1  Vinton  v.  King,  4   Allen,  5G2  ;  Brol-  v.  Mclntyie,  II  Gray,  271 ;  Burke  v.  Mil- 
Icy  V.  Lapham,  13  Gray,  294,  297  ;  Davis  Icr,  4    Gray,  116  ;    Wcarse  v.  Peircc,  24 
»;.  Bean,  114  Mass.  300  ;   llannan  i-.  Han-  Pick.    144;    Wade    v.    Howard,  11    Pick, 
nan,  123  Mass.  441.     Sec  §  610.  207  ;  and  see   Cliadbournc  v.  Kacklifl',  30 
'^  Sec  §S  1204,  1205 ;  Thayer  v.  Mann,  Me.  354.     "  When  the  dcht  is  iiaid,  the 
19  Pick.  .')3.').  whole  substantial  purpose  is  accomplished  ; 
'  Wciir.se  V.  Pcirce,  24  Pick.  141  ;  Free-  a  mere  naked  seisin,  without  any  beneficial 
land  K.  Frcclund,  102  Mass.  475  ;   Hanuaii  interest,  remains   in  the   mortgagee;    the 
Hannan,  123  .Mass.  441.     See  §  612.  legal    seisin   which  he   holds  results  from 
•   Hannan  v.  Hannan,  123  Muss.  441.  the   application  of   a  strict  technical  rule 
^  Wearse  v.  Peirce,  supra.     See  §  619.  of  law,  and   any   technical    answer  to   a 
'  Vinton  v.  King,  supra.     Sec  §§  624,  claim  thus  formed  is  good."     The  case  of 
626.  Parsons  v.  Welles,  17   Mass.  418,  so  far 
^  (;iark  i;.   Peaae,  41   N.  H.  414.     See  as  it  asserts  that  a  writ  of  entry  may  be 
S  834.  maintained  on  the  mortgagee's  bare  legal 
'*   Vose  V.  Handy,   2  Me.  322;  Slayton  title,  is  overruled. 

287 


§  12*J1>.]  FORKCLOSURK  HY  WRIT  OF  ENTRY. 

condition  bo  to  do  any  other  act,  such  as  to  provide  support,  and 
this  lias  not  been  perfornu'd.'  After  payment  the  writ  cannot  be 
maintained  even  against  a  third  person,  and  at  the  request  of  the 
mortgagor  by  whom  the  payment  has  been  made.^  The  debt  is 
not  discharged  by  a  tender,  made  after  condition  broken  and  be- 
fore the  action  was  brought ;  it  is  only  in  equity  that  the  mort- 
♦I'at^or  can  avail  himself  of  it.  Therefore  a  tender  after  condition 
broken,  if  it  be  not  accepted,  constitutes  no  good  defence  to  the 
action.^ 

It  does  not  concern  the  defendant  whether  the  plaintiff  is  pros- 
ecutinn-  the  foreclosure  suit  for  his  own  benefit  or  for  the  benefit 
of  another,  unless  in  the  latter  case  payment  in  whole  or  in  part 
has  been  made  to  the  person  equitably  interested  ;  for  such  pay- 
ment would  be  a  defence.  Otherwise  the  plaintiff,  though  not 
beneficially  interested,  is  entitled  to  recover  on  his  legal  title.* 

The  mortgage  is  not  extinguished  by  an  assignment  of  it  to  an 
attaching  creditor  of  the  mortgagor  to  hold  instead  of  the  attach- 
ment, though  the  mortgagor  procures  the  assignment  by  paying 
the  mortgagee  a  sum  equal  to  the  amount  due  on  the  mortgage  ; 
and  though  for  a  temporary  purpose  it  is  reassigned  to  the  mort- 
gagee and  afterwards  assigned  back  again  by  him,  it  may  still  be 
enforced.'^ 

1299.  Surrender  obtained  by  fraud.  —  If  the  mortgage  has  not 
in  fact  been  paid  or  discharged,  but  delivered  up  to  the  mortgagor 
together  with  the  note  which  it  was  given  to  secure,  the  action 
may  still  be  maintained  on  proof  that  the  delivery  of  these  securi- 
ties was  obtained  through  the  fraud  of  the  mortgagor,  in  falsely 
representing  that  another  note  and  mortgage  which  he  gave  the 
mortgagee  in  exchange  were  good  and  sufficient,  when  in  fact  they 
were  worthless.^  In  such  case  the  action  may  be  maintained  not 
only  against  the  mortgagor,  but  also  against  one  who  has  pur- 
chased from  him  in  ignorance  of  this  transaction  between  him  and 
the  mortgagee,  and  has  paid  the  purchase  money  partly  to  the 
mortgagor  and  partly  by  taking  up  a  subsequent  mortgage  ;  be- 
cause  the   mortgage  remaining  undischarged  of  record,  tlie  pur- 

1  Mason  v.  Mason,  67  Me.  546.  Pick.  240 ;  Staulcy  v.  Kempton,  59  Me. 

2  Prescott  V.  Ellingwood,  23  Me.  345;     472. 

and  see  Bailey  v.  Metcalf,  6  N.  H.  157.  *  Sanderson  v.  Edwards,  111  Mass.  335. 

8  See  §§  886-892;  .Maynard  v.  Hunt,  5         ^  Sheddy  v.  Geran,  113  Mass.  378. 


®  Grimes  v.  Kimball,  3  Allen,  518. 


288 


THE  DEFENCES.  [§§  1300-1304. 

chaser  had  constructive  notice  that  it  was  still  in  force  as  an  exist- 
ing incumbrance,  and  having  such  notice  he  cannot  insist  that 
in  equity  his  claim  shall  prevail  over  the  legal  title  of  the  mort- 
gagee.i 

1300.  Usury  may  be  relied  upon  in  defence  to  the  foreclosure 
suit,  in  the  same  manner  and  to  the  same  extent  as  in  a  suit  upon 
the  mortgage  note.^  But  it  must  be  pleaded  and  cannot  be  set 
up  under  the  general  issue. ^  The  mortgagee  will,  however,  be  en- 
titled to  a  conditional  judgment  unless  the  legal  penalties  for  the 
usury  exceed  the  whole  debt.^  The  penalties  go  to  reduce  the 
amount  for  which  the  conditional  judgment  will  be  rendered.  If 
there  be  no  usury  in  the  original  transaction,  a  payment  subse- 
quently made  to  the  mortgagee  of  a  sum  over  and  above  the  in- 
terest due  on  the  debt,  in  consideration  of  his  forbearance  for  a 
time  to  enter  upon  the  premises  and  foreclose  the  mortgage,  is 
not  usurious,  and  is  not  deducted  from  the  amount  of  the  debt  in 
ascertaining  the  amount  of  the  conditional  judgment.^ 

1301.  Right  of  action  not  accrued.  —  The  mortgagor  "may 
show  in  defence  to  the  action  that  no  breach  of  the  condition  has 
occurred.^ 

1302.  A  defence  may  be  maintained  as  to  a  part  of  the 
premises,  by  showing  a  valid  release  of  the  mortgage  as  to  such 
part,  though  as  to  the  remainder  of  the  premises  there  be  no  de- 
fence.' 

1303.  A  purchaser  subject  to  a  mortgage  cannot  set  up 
fraud  in  obtaining  the  mortgage.  If  he  holds  the  premises  by  a 
quitclaim  deed  from  the  mortgagoi",  he  cannot  defend  an  action  to 
foreclose  the  mortgage  by  showing  that  the  mortgagee  obtained 
the  mortgage  by  false  and  fraudulent  representations  to  the  mort- 
gagor; nor  can  he  for  this  reason  claim  a  reduction  of  the  amount 
for  which  the  conditional  judgment  is  to  be  entered.  If  any  such 
claim  exists  it  must  be  made  by  the  mortgagor,  as  it  does  not  pass 
to  a  j)urcha3er  from  him  by  quitclaim  deed.^ 

1304.  Promise  not  to  enforce. —  It  is  no  defence  to  an  action 
to  foreclose  a  nK^rtgiigi;  that  the  mortgagee  has  vei'bally  promised 

'  Grimes  v.  Kimball,  8  Allen,  15:j.  ^  Drury  v.  Morse,  .'5  Alien,  44r>. 

^  Hart  V.  GoliJsmith,  1  Allen,  145,  147  ;         ''  I'ettee  v.  Case,  11  Gray,  478. 
Minot  I'.  Sawyer,  8  Allen,  78.     See  §  633.  '   Wolcott  v.  Wineheslcr,  15  (Jrny,  4GI. 

'  Litlle  V.  Hiley,  4;}  N.  II.  Io;»;   IJriggs         »  §§  744,  1807;  FairHeld  i-.  MeArtluir, 

V.  Shole.-*,  14  N.  II.  2C2.  15   Gray,   52G ;   Foster  v.  Wigliiman,  123 

*  Munuhan  v.  Varnum,  II  Gray,  405.  Mass.  100. 


VOL.    II.  19 


289 


§§  loOo,  130C).]   FORECLOSURK  BY  WRIT  OF  BNTRY. 

tho  owner  of  tlio  equity  of  redemption  that  lie  should  hold  the 
huul  tiisoharged  of  the  nioi'tgage  ;  ^  and  a  court  of  equity  will  not 
restrain  the  prosecution  of  it.  A  legal  instrument  under  seal  can- 
not be  set  aside  by  such  a  verbal  agreement.^  Moreover  after  a 
suit  to  foreclose  a  mortgage  has  been  instituted,  the  prosecution 
of  it  will  not  be  enjoined,  although  the  holder  of  the  equity  of 
redemption  offers  to  pay  any  sum  tliat  may  be  due  under  the 
mortgage,  for  that  may  just  as  well  be  determined  in  the  fore- 
closure suit.^ 

1305.  The  defendant  is  not  allowed  to  set  up  any  title  ac- 
quired by  him  after  the  commencenient  of  the  action  ;  as  for 
instance  the  tenant  cannot  defeat  an  action  by  the  holder  of  a 
second  mortgage  by  obtaining  an  assignment  of  the  first  mortgage 
to  himself,  and  offering  by  means  of  this  to  show  a  superior  title.* 
But  the  defendant  may  set  up  a  superior  title  acquired  before  the 
commencement  of  the  action,  and  the  title  may  be  tried  as  in 
a  common  law  writ  of  entry  ;  and  if  such  title  is  older  and  better 
than  the  mortgage  title,  he  will  prevail  in  the  suit.  If  instead  of 
acquiring  such  outstanding  title,  a  stranger  holding  it,  pending 
the  suit,  ousts  him  or  recovers  the  land  against  him,  the  writ  will 
abate  if  the  facts  are  specially  pleaded.^ 

6.   The   Conditional  Judgment. 

1306.  The  judgment  after  determining  the  amount  due  on 
the  mortgage  is  conditioned  that  if  the  defendant  shall  pay  to 
the  plaintiff  the  sum  so  adjudged  to  be  due,  with  interest  thereon, 
within  two  months  from  the  time  of  entering  it,  then  the  mort- 
gage shall  be  void  and  discharged  ;  otherwise  the  plaintiff  shall 
have  his  execution  for  possession.  Possession  gained  in  this  way 
has  the  same  effect  as  an  entry  in  pais  in  the  manner  already  de- 
scribed, and  if  continued  for  three  years  the  right  of  redemption 
at  the  end  of  that  period  is  forever  foreclosed.  In  such  case  the 
time  limited  begins  to  run  from  the  date  when  the  officer  delivers 
seisin  and  possession  upon  the  execution.  The  officer's  return  on 
the  execution  is  not  conclusive  as  to  the  actual  date  of  the  deliv- 

1  Maynard  v.  Hunt,  5   Pick.  240;  and     Vanness,  10  N.  J.  L.  (5  Halst.)  102.     Per 
see  Brolley  v.  Lapham,  1.3  Gray,  294.  Jackson,  J.,  in   Walcutt  v.   Spencer,   14 

2  Hunt  V.  Maynard,  6  Pick.  489.  Mass.  409,  411. 

^  Kilborn  v.  Kohbins,  8  Allen,  466.  ^  Walcutt  v.  Spenser,  supra.    See,  how- 

♦  Hall   V.   Bell,   6    Met.  431  ;  Nash   v.     ever,  Dorr  v.  Leach,  58  N.  H.  18. 
SpoflFord,  10   Met.  192;  and  see   Den  v. 

290 


THE   CONDITIONAL  JUDGMENT.  [§  1307. 

ery  of  possession.  Where  it  appeared  that  the  execution  was 
dated  May  6,  1869,  and  the  officer's  return  and  the  acknowledg- 
ment of  possession  were  dated  May  3,  1869  ;  and  the  execution 
was  recorded  June  10,  1869,  it  was  apparent  from  the  papers 
themselves  that  June  3  was  the  date  intended  ;  but  the  court  held 
that  whether  this  was  so  or  not,  the  whole  record  showed  that 
possession  was  actually  taken  on  some  day  between  the  date  of 
the  execution  and  the  date  of  the  record  of  it,  and  for  the  pur- 
poses of  the  case  this  was  all  that  it  was  necessary  to  determine. ^ 
Evidence  aside  from  the  record  might  be  resorted  to  when  neces- 
sary, to  show  when  the  possession  actually  began.  A  voluntary 
surrender  of  the  premises  after  judgment  of  foreclosure  does  not 
give  possession  under  the  judgment,  but  merely  ordinary  peace- 
able possession  under  the  mortgage.  Possession  under  the  judg- 
ment can  only  be  delivered  on  the  execution. ^ 

In  Massachusetts  the  execution  and  the  officer's  return  thereon 
must  be  recorded  in  the  registry  of  deeds,  in  order  that  the  three 
years  necessary  for  foreclosure  shall  run  from  the  time  of  the 
delivery  of  seisin,  as  against  any  person  other  than  the  parties  to 
the  action  and  their  heirs  and  devisees,  and  those  having  actual 
notice.^ 

The  judgment  will  include  the  entire  mortgaged  land,  although 
as  to  part  of  it  the  tenants  have  a  right  of  redemption.  Their 
remedy  for  this  is  by  a  bill  in  equity.* 

1307.  The  fact  that  the  demandant  in  a  writ  of  entry  is  a 
mortgagee  does  not  preclude  him  from  maintaining  the  ac- 
tion simply  to  try  his  title,  and  to  recover  possession  from  one 
who  has  disseised  him.  He  is  not  limited  to  a  conditional  judg- 
ment except  in  case  he  prosecutes  the  action  for  tlie  purpose  of 
foreclosing  the  mortgage."  The  mortgagee  being  already  in  pos- 
session of  a  portion  of  the  mortgaged  premises,  may  maintain  a 
writ  of  entry  against  the  mortgagor  for  the  remainder,  by  declar- 
ing on  his  own  seisin,  without  naming  the  mortgage  or  asking  a 
judgment  as  upon  a  mortgage,  and  the  defendant  cannot  restrict 

'  Worthy  v.  Warner,  119  Mass.  550.  Haven  d.  Adams,  4  Allen,  80,  93;  Stewart 

2  KiKi;9  V.  Sholes,  14  N.  II.  262.  v.    Davis,  63   Me.  539  ;  Partridj^e  v.  Gor- 

•  Gen.   Stat.   c.  133,   §   55;  Uobbins  v.  don,  15  Mass.  486;  Darlin;;  r.  Chapman, 
Rice,  7  Gray,  202.  14   Mass.  101  ;  Loud  v.  Lane,  8  Met.  517  ; 

*  Ivcwis  I).   Bahb,  15  Mass.  488,  note;  Somes  t>.  Skinner,  10  Mass.  348  ;  3  I'ick. 
Johnson  v.  Brown,  31  N.  H.  405.  52. 


*  Boston    Bank   v.  liecd,  8   Pick.   459  ; 


291 


§§  1308-lol0.]       FOKKCLOSUHK    IIY    WIMT    OF    KNTRY. 

him  to  such  a  judgiucnt  or  objoct  tliiit,  the  phiintifi"  is  attempting 
to  foreeU>se  a  part  only  of  the  mortgaged  laiul.'  Whether  the 
writ  of  entry  is  brought  for  the  foreclosure  of  the  mortgage,  or  to 
try  the  title  ami  recover  possession,  depends  upon  the  case  dis- 
closed by  the  pleadings  and  proof,  and  not  upon  the  form  of  the 
\vrit.'- 

1308.  To  obtain  a  conditional  judgment  the  plaintiff  must 
produce  the  bond  or  note  on  which  the  mortgage  is  founded,  so 
that  it  may  be  known  wliat  payments  have  been  made,  and  how 
much  is  due  in  equity  and  good  conscience  upon  the  debt.  If  the 
mortgagee  has  assigned  the  bond  or  note,  and  has  no  interest  in 
the  claim,  there  is  no  reason  why  he  should  have  any  judgment, 
although  he  has  never  assigned  the  mortgage.  The  judgment 
should  only  be  rendered  upon  the  request  of  the  holder  of  the  note 
or  bond,  and  upon  his  producing  it.^ 

1309.  The  judgment  should  include  the  whole  amount  due 
and  payable  on  the  mortgage  at  the  time  of  entering  the  judg- 
ment, and  not  merely  the  amount  due  at  the  commencement  of 
the  action.*  It  should  include  the  whole  amount  secured  by  the 
mortgage,  whether  the  debt  be  absolute  or  contingent,  and  evi- 
dence is  admissible  to  show  what  is  the  actual  amount  secured.^ 
Neither  is  the  judgment  limited  to  the  amount  of  the  penalty  of 
a  bond  which  the  mortgage  secures.*' 

1310.  When  the  condition  of  the  mortgage  is  not  for  pay- 
ment of  a  sum  of  money,  so  that  a  simple  conditional  judgment 
in  the  ufjual  form  is  all  that  is  necessary,  but  is  for  the  })erf9rm- 
ance  of  various  duties  from  time  to  time,  other  than  the  payment 
of  money,  any  decree  which  may  be  made  in  a  suit  in  equity  may 
be  entered  from  time  to  time,  and  as  often  as  necessary,  in  order 
to  accomplish  the  purpose  of  the.  mortgage. '^ 

In  such  case  the  court  may  liquidate  the  amount  due  upon  the 
mortgage  ;^  as  where  it  is  conditioned  for  the  support  of  the  mort- 
gagee, judgment  may  be  entered  for  the  amount  of  expense  in- 
curred by  him  in  consequence  of  the  breach  of  the  condition  up  to 

1  Treat  v.  Pierce,  53  Me.  71  ;  and  see     Hiester,  6  Watls  (Pa.),  53;  Carpenter  v. 
Rev.  Stat,  of  Me.  c.  90,  §  7.  Carpenter,  6  R.  I.  542. 

2  Blanchard  v.  Kimball,  13  Met.  300.  ^  Frceland  v.  Freeland,  102  Mass.  475. 
8  Vosc  V.  Handy,  2  Greeni.  332.                       «  Pitts  v.  Tilden,  2  Mass.  118. 

*  Nor  thy   v.   Northy,   45    N.   II.    141  ;         '^  Stewart  t^.  Claris,  11  Met.  384. 
Stewart  v.  Clark,  1 1   Met.  384  ;  Mohn  v.         »  Erskine  v.  Townsend,  2  Mas.s.  493. 
292 


THE   CONDITIONAL  JUDGMENT.  [§§  1311,  1312. 

the  time  of  rendering  judgment.^  A  mortgage  provided  that  the 
mortgagor  should  keep  a  cow  for  the  mortgagee  ;  but  he  kept  it 
so  poorly  that  the  mortgagee  was  obliged  to  sell  the  cow.  In  an 
action  to  foreclose  the  mortgage,  a  conditional  judgment  was 
entered  for  the  cost  of  keeping  a  cow  subsequent  to  the  time  of 
the  sale.  The  mortgagor  not  having  offered  to  keep  another  cow, 
or  give  any  assurance  that  he  would  keep  one  properly,  it  was 
not  regarded  as  necessary  that  the  mortgagee  should  purchase  a 
cow  and  ask  the  mortgagor  to  keep  her,  in  order  to  hold  him 
liable  for  the  keeping.^ 

Questions  of  fact  as  to  the  amount  due  may  be  submitted  to  a 
jury.^  Special  issues  may  be  framed  and  questions  proposed  for 
this  purpose,  to  be  tried  and  determined  by  the  jury  under  the 
direction  of  court.* 

1311.  Sums  paid  for  protection  of  the  estate.  —  The  mort- 
gagee is  entitled  to  have  included  in  the  judgment  any  sums  of 
money  he  has  paid  for  taxes,  premiums  of  insurance,  or  in  other 
ways  for  the  benefit  of  the  mortgagor  and  the  protection  of  the 
estate,  so  far  as  the  mortgage  provides  that  such  payments  shall 
become  a  charge  upon  the  estate.^  But  a  mortgagee  who  has 
taken  his  mortgage  in  part  payment  of  the  purchase  money  of 
premises  conveyed  by  him  to  the  mortgagor  at  the  same  time,  by 
a  deed  with  full  covenants  of  warranty,  cannot  charge  the  mort- 
gagor with  a  sum  since  paid  by  him  to  relieve  the  premises  from  a 
prior  mortgage  made  by  him  while  the  owner  in  fee  of  the  prem- 
ises, by  proof  of  an  oral  agreement  at  the  time  of  making  the 
conveyances  that  the  mortgagor  should  assume  the  payment  of 
the  prior  mortgage,  and  of  a  mistake  in  the  drawing  of  the  deeds. 
The  written  deed  must  be  taken  as  proof  of  the  agreement  of  the 
parties.  The  mortgagee  can  avail  himself  of  such  agreement  and 
mistake  only  by  a  bill  in  equity  to  reform  the  deed.^ 

1312.  Indemnity  mortgage. —  Where  the  condition  of  a  mort- 
gage is  that  the  mortgagor  shall  pay  such  notes  as  the  mortgagee 
shall  sign  for  his  accommodation,  and  also  a  promissory  note  de- 
scrihed  in  the  mortgage,  but  the  only  consideration  for  the  mort- 
gage and  iiiorlgage  note  is  the  signing  of  an  accoinuiodation  note 

'   Wil.liT  r.  Whittcinore,  15  Mass.  202.  *  Fuss  v.  Ilildreth,  10  Allen,  76. 

2  Fiskc  V.  Fiskc,  20  Pick.  499.  ''  See  §  1080. 

*  Slay  ton  V.   Mclntyre,   11    Gray,  271,  "  Kugj,'lc3  f.  Burton,  10  Oniy-,  l.'il. 
275. 

293 


§§  1313,  1314.]       KORKCLOSUHK    HY    WKIT    Ol'    KNTRY. 

wliu'li  lilt'  iiiDrtgiij^i'c  paid  at  luatiuity,  on  ;i  writ  of  entry  to  fore- 
close, the  eonditioiial  judijjnu'nt  should  Ix^  for  tlie  uniount  of  the 
note  |»aiil  by  the  mortgagee  with  leg;d  interest  from  the  time  of 
payment  ;  and  even  it"  the  mortgage  note  and  the  accommoda- 
tion note  he  for  the  same  amount,  the  transaction  cannot  be  re- 
garded as  a  loan  of  that  amount,  or  the  mortgage  note  regarded 
as  the  principal  debt,  so  as  to  carry  a  higher  rate  of  interest  made 
payable  by  that  note.^  If  after  an  indemnity  mortgage  is  given 
the  parties  themselves  agree  upon  the  amount  of  the  liability,  the 
judgment  will  be  for  this  amount,  though  it  be  only  a  part  of  the 
original  claim. ^ 

1313.  In  ascertaining  the  amount  of  the  judgment  claims 
in  set-off  may  be  allowed  if  they  are  actually  mutual,  or  if  the 
parties  have  agreed  to  offset  them.^  Accordingly  where  the 
holder  of  a  mortgage  was  indebted  to  the  mortgagor,  and  orally 
agreed  with  him  that  he  should  have  the  mortgage  for  the  amount 
of  the  debt,  it  was  held  that  the  debt  should  be  offset  against  the 
mortgage,  although  such  holder  had  assigned  it  to  another  person 
upon  a  secret  trust  to  hold  for  him.*  But  distinct  debts  cannot 
be  set  off  aside  from  any  agreement  of  the  parties.  The  question 
is  not  what  would  be  due  between  the  parties  upon  a  settlement 
of  their  mutual  demands,  but  what  is  due  on  the  mortgage.^  If 
there  are  counter  claims  which  by  agreement  have  become  an 
equitable  set-off,  they  should  be  proved  at  the  trial.  Merely  pre- 
senting the  claims  without  proof  on  the  one  side  or  admission 
upon  the  other  avails  nothing.*' 

1314.  Joint-tenants.  —  If  two  persons  owning  land  as  ten- 
ants in  common  mortgage  it  to  secure  the  payment  of  a  debt 
equitably  as  well  as  legally  due  from  both,  and  one  is  made  to  pay 
the  whole  debt,  he  by  reason  of  such  payment  becomes  an  equi- 
table assignee  of  the  mortgage  until  the  other  mortgagor  contrib- 
utes his  share,  and  the  mortgagee  may  be  compelled  in  equity 
to  execute  an  assignment  to  him.^  If,  after  such  a  mortgage  one 
tenant  makes  a  second  mortgage  of  his  undivided  half  of  the 
same  property  to  secure  his  own  debt  to  the  same  mortgagee,  who 

1  Athol  Savings  Bank  v.  Pomroy,  115         «  Ilolbrook  v.  Bliss,  9  Allen,  69  ;  Davis 
Mass.  573.  v.  Thompson,  118  Mass.  497. 

2  Rice  V.  Clark,  10  Met.  500.  6  Bird  v.  Gill,  12  Gray,  60. 

8  Slayton  v.  Mclntyre,  11  Gray,  271.  «  Davis  v.  Thompson,  118  Mass.  497. 


294 


^  Sargent  v.  M'Farland,  8  Pick.  500. 


THE   CONDITIONAL   JUDGMENT.         [§§  1315,  1316. 

after  entering  to  foreclose  under  this  mortgage,  brings  a  writ  of 
entry  against  the  other  tenant  to  foreclose  the  first  mortgage,  the 
conditional  judgment  should  be  for  one  half  of  the  joint  debt ;  for 
if  tliis  tenant  were  compelled  to  pay  the  whole  debt,  he  would  be 
entitled  to  the  security,  and  the  mortgagee  having  taken  posses- 
sion of  one  undivided  moiety  under  the  second  mortgage,  the 
result  is  the  same  in  the  end  :  the  mortgagee  has  the  benefit  of 
all  the  security,  and  circuity  of  action  is  avoided.^  If  the  money 
raised  by  the  first  mortgage  had  been  for  the  benefit  of  one  debtor 
alone,  the  conditional  judgment  against  him  would  be  for  the 
whole  debt,  because  he  would  not  then  be  entitled  to  any  protec- 
tion from  the  security. 

1315.  If  nothing  is  due  to  the  plaintiff  upon  the  mortgage 
he  is  not  entitled  to  any  judgment  at  all,  although  by  reason  that 
the  mortgage  debt  was  paid  after  it  became  due  there  has  been 
a  breach  of  the  condition,  and  the  technical  legal  title  is  still  in 
the  mortgagee.^ 

1316.  The  judgment,  with  all  benefit  of  the  security  and  of 
the  possession  taken  under  it,  may  be  assigned.  If  the  mort- 
gage be  formally  assigned,  the  assignee  takes  the  legal  title  ;  if 
only  the  judgment  be  assigned,  he  takes  the  equitable  title  ;  but 
in  either  case  he  has  the  benefit  of  all  the  proceedings  taken  to- 
wards the  foreclosure  of  the  mortgage.  If  the  assignment  be 
made  to  a  surety,  or  any  person  other  than  the  owner  of  the 
equity  who  pays  the  judgment,  the  payment  does  not  avail  such 
owner  as  a  payment  of  the  mortgage  debt.  Even  without  any 
formal  assignment  either  of  the  judgment  or  of  the  mortgage  the 
surety  would  be  equitably  subrogated  to  all  benefit  of  both.^ 

1  Sargent  «.  M'Farland,  8  Pick.  500.  »  Worthy  v.  Warner,    119   Mass.  550. 

2  Slay  ton  v.  Mclntyre,  11  Gray,  271.         See,  also.  Hedge  v.  Holmes,  10  Pick.  380. 

295 


CHAPTER   XXX. 

STATUTORY  PROVISIONS  RELATING     TO  FORECLOSURE   AND   RE- 
DEMPTION, 1317-1366. 

1317.  The  statutes  generally.  —  An  examination  of  the  stat- 
utes of  the  several  states  in  rehition  to  the  foreclosure  of  mort- 
gages can  hardly  fail  to  surprise  one  at  the  great  diversity  of  sys- 
tems in  use,  and  at  the  difference  in  detail  between  those  which 
are  based  upon  the  same  general  principles.^  In  general  it  may 
be  said  that  a  bill  in  equity  for  the  foreclosure  and  sale  of  the 
property  is  the  prevailing  method.  But  in  some  states  this  pro- 
ceeding is  left  to  the  inherent  and  general  jurisdiction  of  courts  of 
chancery,  without  any  statutory  regulations  whatever.  Formerly 
the  general  principles  of  equity  were  considered  sufficient  for  con- 
ducting and  determining  the  suit  in  all  cases,  and  there  were  stat- 
utes regulating  it  in  hardly  any  of  the  states.  Gradually,  how- 
ever, the  different  states  have  enacted  provisions  covering  the 
whole  proceeding  of  foreclosure,  so  that  now  this  is  wholly  left  to 
the  general  equitable  jurisdiction  and  discretion  of  the  courts  in 
chancei-y  only  in  one  state  where  the  common  mode  of  foreclosure 
is  by  bill  in  equity  ;  though  in  several  other  states,  as  in  Massa- 
chusetts and  Pennsylvania,  where  a  foreclosure  in  equity  is  al- 
lowed only  in  exceptional  cases  when  the  modes  in  common  use 
are  inadequate,  the  proceedings  are  under  the  general  equitable 
jurisdiction  of  the  court.  The  statutes  in  some  states  still  leave 
much  to  the  equitable  discretion  of  the  court ;  while  in  others 
such  discretion  is  altogether  supplanted  by  provisions  which  cover 
the  whole  subject  in  detail. 

Aside  from  the  provisions  relating  directly  to  the  mode  of  fore- 
closure, and  the  rights  of  the  parties  before  and  after  foreclosure 

1  This  subject  well  illustrates  the  need  approach  to  uniformity,   throughout   the 

and  use  of  a  letral  reform  which  shall  have  United  States.     See  article  by  P.  N.  Bow- 

for  its  object  a  system  of  jurisprudence  man,  in  3  Southern  L.  Rev.  573,  on  Inter- 

which  shall  be,  if  not  uniform,  at  least  an  State  Revision  and  Codification. 

296 


STATUTORY    PROVISIONS,  ETC.         [§§  1318,  1319. 

is  effected,  a  fundamental  change  has  been  made  in  the  manner  of 
judicial  procedure  in  several  states,  which  should  be  kept  in  mind 
in  examining  the  statutes  and  decisions  of  these  states  upon  this 
subject. 

1318.  Codes  of  procedure.  —  The  State  of  New  York,  in  1848, 
adopted  a  Code  of  Procedure,  the  fundamental  principle  of  which 
is  contained  in  the  provision,  that  "  the  distinction  between  ac- 
tions at  law  and  suits  in  equity,  and  the  forms  of  all  such  actions 
and  suits  heretofore  existing,  are  abolished  ;  and  there  shall  be  in 
this  state  hereafter  but  one  form  of  action  for  the  enforcement  or 
protection  of  private  rights  and  the  redress  of  private  wrongs, 
wliich  shall  be  denominated  a  civil  action."  ^  The  Code  does  not 
abolish  the  distinction  between  law  and  equity,  which  is  too  deeply 
impressed  upon  the  jurisprudence  of  the  country  to  be  done  away 
with  in  any  state  by  any  enactment.  The  civil  action  is  an  equi- 
table proceeding,  where  formerl}^  it  would  have  been  a  bill  in 
equity.  The  action  for  foreclosure  under  the  Code  is  an  equitable 
proceeding  as  distinguished  from  an  ordinary  one,  and  is  governed 
by  the  established  principles  of  equity  except  where  statutes  reg- 
ulate it ;  and  these  statutes  in  general  are  only  embodiments  of 
established  principles  of  equity.  So,  therefore,  foreclosure  re- 
mains an  equitable  remedy,  although  it  is  obtained  under  a  new 
name  and  form.  This  provision  of  the  New  York  Code  quoted 
above  as  comprehending  the  whole  system  has  been  enacted,  gen- 
erally in  the  same  words,  in  Ohio,^  Indiana,^  Wisconsin,*  lowa,^ 
Minnesota,^  Missouri,'  Kansas,^  Nebraska,^  Nevada,'*'  Oregon,'^ 
California,'^  Kentucky ,'3  Nortli  Carolina,'*  South  Carolina,'^  and 
Florida.16 

1319.  In  this  chapter  a  statement  will  be  given  of  the  stat- 
utory provisions  of  each  state  in  relation  to  the  foreclosure  and 
rcdcMiption  of  mortgages,  excepting  only  such  provisions  as  relate 

1  3  U.  S.  1875,  p.  473  ;  Code,  §  09.  »  Gen.  Stat.  1873,  c.  .^)7,  §  2. 

2  Code  of  Civil  I'roced.  1874,  p.  2  ;  and         i"  Compiled  Laws,  1873,  §  1064. 
Rev.  Stat.  1860, c.  87,  §  3.  "   Gen.  Laws,  1872,  p.  lO."). 

»  St.  1862,  Gavin  &  Uord,  vol.  2,  p.  33,         >'^  Code,  1872  ;  Civil  Procednre,  p.  81. 
§  1  ;  UeviHion,  1876,  vol.  2,  p.  32.  18  Code,  1867.  p.  2,  §§  1-1.3. 

♦  Rev.  Stat.  1871,  c.  122,  §  8.  i*  Battle's  Rev.  1873,  ji.  137  ;  Constiiu- 
'  Revision,  1873,  §§  2.')O7-2.520.  tion,  §  1,  art.  14. 

•■•  Revision.  1866,  c.  66,  §  1.  "^  Rev.  Stat.  1873,  p.  .'J97. 

7  Wagner's  Stat.  1870.  c.  110,art.  1,§  1.  i«  Bush,  Dig.  of  Stal.  1872,  j).  4.'>7. 

*  Gen.  Stat.  1868  (DasBler,  1876),  c.  80, 
5  10. 

207 


§§  1320,  l;V21.]       STATUTORY    PROVISIONS    RKLATING    TO 

to  powor  of  sale  niortgaf^cs,  ami  trust  deeds  with  powers  of  sale 
in  the  nature  of  mortgages,  and  the  provisions  relating  to  fore- 
closure by  entry  and  possession  used  in  some  of  the  New  England 
States.  Frequently,  where  the  mode  and  form  of  proceedings  to 
foreclose  are  not  regulated  by  statute,  these  are  stated  upon  the 
authority  of  the  decisions  of  the  courts.  In  the  notes  are  given 
the  judicial  interpretations  of  the  more  important  provisions  of 
these  statutes,  and  especially  such  decisions  as  illustrate  the  local 
laws  rather  than  general  })rineiples  everywhere  applicable. 

1320.  A  mortgage  cannot  be  foreclosed  by  a  special  stat- 
ute enacting  that  the  mortgage  has  been  foreclosed,  or  that  it  shall 
be  foreclosed  in  case  the  debt  be  not  paid  within  one  year  from  the 
passage  of  the  act.^  Such  a  statute  would  be  in  substance  and 
effect  a  judicial  decree.  It  is  not  properly  a  legislative  act.  It 
is,  therefore,  unconstitutional  under  a  government  in  which  the 
legislative  and  judicial  powers  are  vested  in  different  bodies,  and 
also  in  violation  of  the  Constitution  of  the  United  States,  as  im- 
pairing the  obligation  of  the  contract  between  the  parties  to  the 
mortgage,  whereby  the  mortgagor  had  the  right  to  redeem  ac- 
cording to  the  genei'al  laws  of  the  state. 

1321.  The  law  in  force  when  the  mortgage  was  executed 
must  be  followed  in  foreclosing  it,  though  there  be  a  change  in 
the  mean  time.  The  remedy  so  provided  becomes  a  part  of  the 
contract  of  the  parties,  and  any  change  by  statute  substantially 
affecting  it,  to  the  injury  of  the  mortgagee,  is  held  to  be  a  law 
impairing  "  the  obligation  of  the  contract,"  within  the  meaning 
of  the  Constitution  of  the  United  States.  Thus  a  law  which  pro- 
vided that  the  equitable  estate  of  the  mortgagor  should  not  be 
extinguished  for  twelve  months  after  a  sale  under  a  decree  in 
chancery,  and  which  prevents  any  sale  unless  two  thirds  of  the 
amount  at  which  the  property  has  been  valued  by  appraisers  shall 
be  bid  therefor,  cannot  be  applied  in  the  foreclosure  of  a  mortgage 
executed  before  the  statute  was  enacted  ;  but  such  mortgage  must 
be  foreclosed  according  to  the  law  existing  when  it  was  executed.^ 

1  Ashuelot  R.  R.  Co.  v.  Elliott,  52  N.  H.  Dow  v.  Chamberlin,  5  McLean,  281.  In 
387.  Wisconsin,  however,  a  statute  providing 

2  Bronson  v.  Kinzie,  1  How.  311  ;  Wil-  that  in  foreclosurcsuits  the  defendant  shall 
liamson  v.  Doe,  7  IJlackf.  (Ind.)  12  ;  Mc-  have  six  months  to  answer,  and  that  there 
Cracken  v.  Ilavward,  2  How.  608;  17  should  be  six  months'  notice  of  the  sale 
Pet.  28 ;  Clark  v.  Reyburn,  8  Wall,  318,  after  judgment,  was  held  constitutional; 
322;  Ogden  w.  WalterH,  12  Kan.  882.   See  Von   Baumback  v.   Bade,   9   Wis.   559; 

.     298 


FORECLOSURE   AND    REDEMPTION.  [§  1322. 

1322.  Alabama. —  Foreclosure  is  by  bill  in  equity. ^  The 
decree  has  the  force  and  effect  of  a  judgment,  and  execution  may 
issue  after  the  property  has  been  sold,  the  sale  confirmed,  and  the 
balance  ascertained  by  decree  of  court.  Before  so  provided  by 
statute  it  was  held  that  the  balance  of  the  debt  could  only  be  en- 
forced at  law.2  The  proceeding  is  one  not  in  rem  but  in  per- 
sonam^ and  those  who  are  not  parties  to  it  are  not  bound  by  the 
decree.^  A  strict  foreclosure  may  be  decreed  in  proper  cases,  as 
where  a  mortgagee  has  obtained  a  release  of  the  equity  of  redemp- 
tion of  property  which  is  worth  nothing  above  the  debt,  and  he 
desires  to  quiet  the  title.^ 

The  fact  that  a  power  of  sale  is  conferred  upon  the  mortgagee 
does  not  deprive  a  court  of  chancery  of  its  jurisdiction  to  foreclose. 
The  fact  that  he  is  incapable  of  purchasing  at  his  own  sale  is  a 
reason  why  this  jurisdiction  should  be  retained.^ 

When  real  estate  is  sold  under  a  decree  in  chancery,  deed  of 
trust,  or  power  of  sale  in  a  mortgage,  it  may  be  redeemed  within 
two  years.  The  possession  of  the  land  is  given  to  the  purchaser 
within  ten  days  after  the  sale  by  the  debtor  if  in  his  possession, 
on  demand  of  the  purchaser.  If  the  land  is  in  the  possession  of  a 
tenant,  notice  to  him  by  the  purchaser,  or  his  vendee,  of  the  pur- 
chase, after  the  lapse  of  ten  days  from  the  time  of  sale,  vests  the 
right  of  possession  in  him  in  the  same  manner  as  if  such  tenant 
had  attorned  to  him.  The  debtor  in  order  to  redeem  must  pay  the 
purchase  money,  with  interest  at  the  I'ate  of  ten  per  cent,  per  an- 
num, and  all  lawful  charges.  If  the  purchaser  refuses  to  eonvey 
to  the  debtor,  he  may  recover  possession  by  suit  for  unlawful  de- 
tainer. Judgment  creditors  may  redeem  in  like  manner,  upon 
further  offering  to  credit  the  debtor  upon  a  subsisting  judgment, 
with  at  least  ten  per  cent,  of  the  amount  originally  bid  for  the 
land.  If  the  purchaser  offers  to  credit  the  debtor  on  his  judgment 
a  like  amount  he  may  retain  the  land,  unless  the  creditor  makes  a 

Starkwcnihcr  v.  Hawcs,  10  Wis.  125;  hut  v.  Rain,  28  Ala.  332;  Doc  v.  McLoskey, 

not  aj»|)licable  to  pendiiij;  actions.    ()(;den  1  Ala.  708. 

V.  Gliililen,  9  Wis.  4(5  ;  Diodricks  v.  Stro-  ■•   Hitchcock  v.   U.  S.  Biiiik  of  I'ciin.  7 

nnch,  9  Wis.  .548.  Ala.  380. 

'  Code,  1876,  §  3908  ;  Kev.  Code,  1867,  ^  Carradinc  (;.  O'Connor,  21  Ala.  .573  ; 

§  3479.     rower  of  sale  mortgages  arc  now  Marriott  v.  Givt-ns,  8  Ala.  694;  McGowan 

in  common  use.     See  cha|)ter  xxxix.  v.  Branch   Bank  of  Mohile,   7  Ala.  823  ; 

«  Hunt  V.  Lcwin,  4  Stew.  &  P.  138.  Ala.  Life  Ins.  &  Trust  Co.  v-  I'ettway,  24 

»  Hunt  t;.  Acre,  28  Ala.  580;  Boykin  Ala.  544. 

299 


§  Vo'2-2  a.]  STATUTORY    rUOVISIONS   RKLATING   TO 

fiirtliiT  oiVrr  to  civdit  an  adilitiDnal  sum  of  not,  loss  than  ton  p«'r 
cent,  as  Itcforo,  to  wliii-h  the  purchaser  may  respond,  if  he  clioose, 
with  a  lilvo  otTor.  One  judgment  creditor  may  in  like  manner  re- 
deem from  another.  Any  person  redeeming  must  pay  to  the  per- 
son in  possession  the  value  of  all  permanent  improvements  made  by 
him  after  he  aequireil  title. ^  The  right  to  redeem  after  a  sale  can 
be  enforced  only  in  equity.  A  tender  does  not  restore  the  title.'-^ 
This  right  to  redeem  is  a  perst)nal  privilege  of  the  debtor  and 
cannot  be  asserted  by  a  purchaser  of  his  interest  at  an  execution 
sale  before  the  statutory  right  had  arisen.^ 

1322  K.  Arizona  Territory.''     In  an  action  for  the  foreclosure 
or  satisfaction  of  a  mortgage  of  real  property,  the  court  shall  have 
power  by  its  judgment  to  direct  a  sale  of  the  property,  or  any 
part  of  it,  and  to  direct  the  application  of  the  proceeds  to  the  pay- 
ment of  the  amount  due  on  the  mortgage,  lien,  or  incumbrance, 
with  costs  and  execution  for  the  balance.     If  the  debt  for  which 
the  niort"-age,  lien,  or  incumbrance   is  held  be  not  all  due,  so  soon 
as  sufKcient  of   the  property  has  been  sold  to   pay  the  amount 
due  wdth  costs,  the  sale  must  cease  ;  and  afterward,  as  often  as 
more  becomes  due  for  principal  or  interest,  the  court  may,   on 
motion,  order  more  to  be  sold.     But  if  the  property  cannot  be 
sold  in  portions  without  injury  to  the  parties,  the  whole  may  be 
ordered  to  be  sold  in  the  first  instance,  and  the  entire  debt  and 
costs  paid,  there  being  a  rebate  of  interest  where  such  rebate  is 
proper.     A  mortgage  of  real  property  shall  not  be  deemed  a  con- 
veyance, whatever  its   terms,  so  as  to  enable  the  owner  of  the 
mortgage  to  recover  possession    of    the  real   property  without  a 
foreclosure  and    sale.     The    court    may,  by  injunction,  on  good 
cause  shown,  restrain  the  party  in  possession  from  doing  any  act 
to  the  injury  of  real  property  during  the  foreclosure  of  a   mort- 
gage thereon   or  after  a  sale  on  execution  before  a  conveyance. 
If  there  be  a  surplus  remaining  after  payment  of  the  amount  due 
on  a  mortgage,  with  costs,  the  court  may  cause  the  same  to  be 
paid  to    the  person  entitled  to    it,  and  in  the  mean  time,  may 
direct  it  to  be  deposited  in  court. 

The  property  is  subject  to  redemption.  The  officer  is  required 
to  give  the  purchaser  a  certificate  of  the  sale,  containing  a  partic- 
ular description  of  the  property  sold  ;  the  price  bid  for  each  distinct 

1  Code,  1876,  §§  2877-2887.  3  Cliildres  v.  Monette,  54  Ala.  317. 

2  Smith  V.  Anders,  21  Ala.  782.  ■*  Compiled   Laws,  1877,  §§  2684-2686, 

300  2698,  2699,  2667-2675. 


FORECLOSURE    AND    REDEMPTION.  [§  1323. 

lot  or  parcel ;  the  whole  price  paid  ;  and  a  duplicate  certificate 
must  be  filed  b}'  the  officer  with  the  recorder  of  the  county.  Re- 
demption may  be  made  by  the  debtor  or  his  successor  in  interest, 
or  by  any  creditor  having  a  lien  by  judgment  or  mortgage  within 
six  months  from  the  sale  on  paying  the  purchaser  the  amount 
paid  by  him  with  eighteen  per  cent,  thereon  in  addition  with 
taxes  ;  and  if  the  purchaser  be  a  creditor  having  a  prior  lien,  that 
must  also  be  paid.  Any  other  creditor  may  redeem  within  sixty 
days  after  the  last  redemption  on  paying  the  amount  paid  on 
such  last  redemption  with  six  per  cent,  addition. 

1323.  Arkansas.^  —  Mortgages  are  foreclosed  by  complaint 
against  the  mortgagor  and  the  actual  occupants  ^  of  the  real  estate 
praying  judgment  for  the  debt,  and  that  the  equity  of  redemption 
may  be  foreclosed,  and  the  pi'operty  sold.  This  must  be  filed  in 
the  county  where  the  premises  or  some  part  of  them  are  situate. 
Tlie  proceedings  are  of  an  equitable  character,  and  are  governed 
by  the  principles  and  practice  of  courts  of  equity.^ 

It  is  not  necessary  to  enter  an  interlocutory  judgment,  or  give 
time  for  the  payment  of  money,  or  for  doing  any  other  act  ;  but 
final  judgment  may  be  given  in  the  first  instance.  A  sale  is 
ordered  in  all  cases.  Judgment  may  be  rendered  for  the  sale  of 
tlie  property  and  for  the  recovery  of  the  debt  against  the  defend- 
ant personally. 

All  sales  of  real  property  are  made  on  a  credit  of  not  less  than 
three  nor  more  than  six  months,  or  on  instalments  equivalent  to 
not  more  than  four  months'  credit  on  the  whole,  to  be  determined 
by  the  court.  In  all  sales  on  credit  the  purchaser  must  execute  a 
bond,  with  a  good  surety  to  be  approved  by  the  person  making 
the  sale,  which  bond  has  the  force  of  a  judgment,  and  a  lien  is 
retained  on  the  property  for  its  price.  If  the  mortgage  be  not 
satisfied  by  the  sale,  an  execution  may  issue  against  the  defendant 
as  in  ordinary  judgments. 

1  Dig.    of    Stat.    1874,   §§    470.')-4709.  must  be  made  a  i)arty,  or  the  petition  must 

For  form  of  coin]»laint,  sec  p.  1046.    Trust  sliow  tlmt  tlicre  is  no  occupant,  or  tliat 

deedu  arc  in  use  here.     Kquity  has  no  ju-  the  mortgagor  is  the  occupant.     McLain 

risdiction  of  a  proceeding  in  rem  against  v.  Smith,  4  Ark.  244  ;  Jett  v.  SchaiFer,  .5 

real  estate  to  foreclose  a  mortgage  upon  Ark.  254  ;  Buckner  v.   Sessions,  27  Ark. 

it,  without  making  any  person  defendant.  219,  225  ;  Fletcher  v.  Hutchinson,  25  Ark. 

This  couhl  he  authorized  only  by  statute.  30. 

Sfate  r.  Bailey,  27  Ark.  473.  '  McLuin     r.    Smith,    siijim  ;    I'rico    v. 

*  The  actual  occupant,  if  there  be  one,  State  Bank,  14  Ark.  .'^lO. 

301 


§  1;V24.]  STATUTORY   PROVISIONS   RELATING   TO 

1324.  California.'  —  Foreclosure  is  a  matter  of  equity  jurisdic- 
tion.'- Tliore  can  be  but  one  action  for  the  recovery  of  any  debt, 
or  the  enforcement  of  any  right  secured  by  mortgage  upon  real 
estate.  In  sudi  action  the  court  may  by  its  judgment  direct  a 
sale  of  the  incumbered  property,  or  so  much  thereof  as  may  be 
necessary,  and  the  application  of  the  proceeds  of  the  sale  to  the 
payment  of  the  costs  and  expenses  of  sale  and  the  amount  due  to 
the  plaintiff ;  and  if  it  appear  from  the  sherilfs  return  that  the 
proceeds  are  insufficient,  and  a  balance  still  remains  due,  judg- 
ment can  then  be  docketed  for  such  balance  against  the  defend- 
ant or  dtifendants  personally  liable  for  the  debt,  and  it  becomes  a 
lien  on  the  real  estate  of  such  judgment  debtor,  as  in  other  cases 
in  which  execution  may  be  issued.^  Subsequent  parties  in  inter- 
est not  appearing  of  record  need  not  be  made  parties  to  the  ac- 
tion ;  and  judgment  is  conclusive  against  them.  Any  surplus 
there  may  be  the  court  may  cause  to  be  paid  to  the  person  enti- 
tled to  it,  and  in  the  mean  time  may  direct  it  to  be  deposited  in 
court.  When  the  debt  is  not  all  due,  so  soon  as  sufficient  prop- 
erty has  been  sold  to  pay  the  amount  due,  with  costs,  the  sale 
must  cease  ;  and  afterwards,  as  often  as  more  becomes  due  for 
■  principal  or  interest,  the  court  may  on  motion  order  more  to  be 
sold.  But  if  the  property  cannot  be  sold  in  portions,  without  in- 
jury to  the  parties,  the  whole  may  be  ordered  to  be  sold  in  the 
first  instance,  and  the  entire  debt  and  costs  paid,  there  being  a 
rebate  of  interest  where  such  rebate  is  proper. 

The  officer  gives  the  purchaser  a  certificate  of  sale,  stating  the 
price  bid,  the  whole  price  paid,  and  whether  subject  to  redemp- 
tion. Redemption  may  be  made  by  the  judgment  debtor  or  his 
successor  in  interest,  in  the  whole  or  any  part  of  the  property  ;  or 
by  a  creditor  having  a  lien  by  judgment  or  mortgage  on  the  prop- 
erty or  any  part  of  it.  Such  creditors  are  called  redemptioners. 
The  judgment  debtor  or  redemptioner  may  redeem  within  six 
months  after  the  sale,  on  paying  the  purchaser  the  amount  of  his 
purchase,  with  two  per  cent,  per  month  thereon  in  addition,  with 

1  Code  of  Civil  Procedure,  §§  726-728.  or  by  a  master  what  balance  is  due.    Hunt 

2  Willis  i;.  Farley,  24  Cal.  490.  v.  Dohrs,  39  Cal.  304;  Gray  v.  Franklin, 

3  As  to  form  of  judgment,  see  Levis-  5  Cal.  416.  The  clerk  of  court  may  then 
ton  V.  Swan,  33  Cal.  480.  The  personal  without  further  order  docket  the  judgment 
judgment  cannot  be  docketed  before  the  and  is.sue  a  general  execution.  Leviston 
sale.     Cormerais  v.  Genella,  22  Cal.  116.  v.  Swan,  33  Cal.  480. 

It  should  first  be  ascertained  by  the  court 

302 


FORECLOSURE  AND  REDEMPTION.  [§  1324. 

any  taxes  the  purchaser  may  have  paid  ;  and  if  the  purchaser  be 
a  creditor  having  a  prior  lien,  the  amount  of  such  lien  with  inter- 
est.^ If  a  redemptioner  redeem,  the  judgment  debtor  or  another 
redemptioner  may  within  sixty  days  after  the  last  redemption 
again  redeem,  on  paying  the  sum  paid  on  the  last  redemption  with 
four  per  cent,  thereon  in  addition.^  And  successive  redemptions 
may  be  made  in  the  same  manner.  If  no  redemption  be  made 
within  six  months  after  sale,  the  purchaser  is  entitled  to  a  convey- 
ance. 

A  purchaser  from  the  time  of  sale,  and  a  redemptioner  till  an- 
other redemption,  is  entitled  to  receive  from  the  tenant  in  posses- 
sion the  rents  of  the  property  sold,  or  the  value  of  the  use  and 
occupation.  The  amount  received  must  be  credited  on  the  re- 
demption money  to  be  paid.^  If  the  purchaser  be  evicted  for  any 
irregularity  in  the  sale,  he  may  recover  the  amount  of  the  pur- 
chase money  with  interest  from  the  judgment  creditor.^ 

When  a  personal  judgment  is  rendered  against  the  defendant, 
and  also  a  decree  in  equity  awarded  for  the  sale  of  the  property, 
the  plaintitf  may  pursue  either  remedy,  but  he  cannot  use  both 
at  the  same  time.  If  he  enforce  the  execution  on  the  personal 
judgment  first,'^  the  money  realized  on  it  must  be  applied  upon  it, 
and  a  sale  of  the  property  under  the  decree  made  for  the  balance, 
or  vice  versa.^  The  personal  judgment  does  not  become  a  lien 
upon  otiier  real  estate  of  the  defendant  until  the  mortgaged  prop- 
erty has  been  sold,  and  the  deficiency  of  the  debt  reported  and 
docketed  by  the  clerk  of  the  court."  It  then  applies  only  for  this 
deficiency.^ 

When  part  of  the  debt  is  not  due  at  the  time  of  the  decree, 
there  can  be  no  judgment  for  the  recovery  of  the  balance  not  due 
from  the  defendant.  The  decree  should  be  so  modified  as  to  ex- 
clude the  recovery  of  the  part  of  the  debt  not  due.  The  power 
of  the  court  under  the  statute  is  exhausted  by  decreeing  a  sale  of 

'  Code  of  Civil  Procedure,  §  702,  and  ment  only  and  strikes  out  the  prayer  for  a 

Amendment  to  Code  of  Civil  Procedure,  sale  of  the  premises,  he  waives  all  right  to 

Feb.  13,  1876,  p.  96.  this.     Ladd  i'.  Ru^'glcs,  23  Cal.  232. 

*  Code,   SHjim,    §    703  ;    Amendnients,  <>  England  v.  Lewis,  2.5  Cal.  337. 
1874,  p.  323.  "  Rowland  v.  Leii)y,  14  Cal.  IfiG;  Howe 

»  Code,  supra,  §  707.  v.  Table  Mountain  Water  Co.  10  Cal.  441. 

♦  Code,  «u/»ro,  §  708.  "  Culver  v.  Rogers,  28  Cal.  520;  Cor- 
'  If  the  plaintiff  takes  a  personal  judg-     nierais  v.  Gcnella,  22  Cal.  116. 

803 


§  1325.]  STAiuioKv  riiovisioNs  rki.atino  to 

tlio  (.'uliro  propt'ity,  tliougli  only  part  of  the  tUsbt  was  tlue.^  In 
all  cjises  of  foreclosurt'  the  altornoy's  fee  is  fixi'd  by  tlii;  court  in 
which  thi>  jM'ocoeding.s  aro  had  without  reference  to  any  stipula- 
tion in  the  mortgage. - 

1325.  Colorado. '*  —  Ai-tions  for  the  foreclosure  of  mortgages 
of  real  propi'rty  must  bo  triiul  in  the  county  in  which  the  subject 
of  the  action,  or  some  part  thereof  is  situated,  provitled  that  where 
such  real  property  is  situated  partly  in  one  county  and  partly  in 
another,  the  plaintill  must  bring  his  action  in  the  county  where 
the  greater  portion  of  such  real  estate  is  situate,  and  the  county 
so  selected  is  the  proper  county  for  the  trial  of  any  or  all  such  ac- 
tions. There  is  but  one  action  for  the  recovery  of  any  debt,  or 
the  enforcement  of  anj"  right  secured  by  mortgage  npon  real  es- 
tate or  personal  property.  The  court  has  power,  by  its  judgment, 
to  direct  a  sale  of  the  incumbered  property,  or  so  much  as  may 
be  necessary,  and  the  application  of  the  proceeds  of  the  sale  to 
the  payment  of  the  costs  of  the  court  and  expenses  of  the  sale  and 
the  amount  due  to  the  plaintiff ;  and  if  it  appear  from  the  sher- 
iff's return  that  the  proceeds  are  insufficient,  and  a  balance  still 
remains  due,  judgment  is  docketed  for  such  balance  against  the 
defendant  or  defendants  personally  liable  for  the  debt,  and  then 
becomes  a  lien  on  the  real  estate  of  such  judgment  debtor,  as  in 
other  cases  in  which  execution  may  be  issued.  No  person  holding 
a  conveyance  from  or  under  the  mortgagor,  or  of  the  property 
mortgaged,  or  having  a  lien  thereon,  which  conveyance  or  lien 
does  not  appear  on  record  in  the  proper  office  at  the  time  of  the 
commencement  of  the  action,  need  be  made  a  party  to  such  ac- 
tion ;  and  the  judgment  therein  rendered,  and  the  proceedings 
therein  had,  are  as  conclusive  against  the  party  holding  such  un- 
recorded conveyance  or  lien,  as  if  he  had  been  made  a  party  to 
said  action,  and  in  all  respects  have  the  same  force  and  effect.  If 
the  debt  for  which  the  mortgage,  lien,  or  incumbrance  is  held,  be 
not  all  due,  so  soon  as  sufficient  of  the  property  has  been  sold  to 
pay  the  amount  due  with  costs,  the  sale  must  cease,  and  after- 
wards as  often  as  more  becomes  due  for  principal  or  interest,  the 
court  may,  on  motion,  order  more  to  be  sold. 

The  court  may,  by  injunction,  on   good  cause  shown,  restrain 

1  Taggart  v.  San  Antonio  Ridge  Ditch         »  Code  of  Civil  Procedure,  1877,  §§  22, 
&  Mining  Co.  18  Cal.  460.  229,  231,  244. 

2  Stat.  1874,  p.  707. 

304 


FORECLOSURE    AND   REDEMi'TION.  [§  1326. 

the  party  in  possession  from  doing  any  act  to  the  injury  of  real 
property  during  the  foreclosure  of  a  mortgage  thereon,  or  after  a 
sale  on  execution  before  a  conveyance. 

1326.  Connecticut.^ — Mortgages  are  foreclosed  in  a  court  of 
chancery.  The  decree  is  for  a  strict  foreclosure,  whereb}^  the 
title  becomes  absolute  in  the  mortgagee,  on  the  mortgagor's  fail- 
ure to  redeem  within  the  time  limited  by  the  decree,  which  is 
usually  from  two  to  six  months.  There  can  be  no  decree  for  the 
sale  of  the  property.^  The  court  may  enforce  a  delivei'y  of  pos- 
session to  the  mortgagee  after  the  time  allowed  for  redemption 
has  expired.  Formerly  a  foreclosure  did  not  preclude  the  mort- 
gage creditor  from  recovering  so  much  of  the  claim  as  the  prop- 
erty mortgaged,  estimated  at  the  expiration  of  the  time  limited 
for  redemption,  is  insufficient  to  satisfy  ;  and  the  bringing  of  an 
action  upon  such  claim  after  foreclosure  obtained  did  not  open 
the  foreclosure.^  The  value  of  the  property  mortgaged,  at  the 
expiration  of  said  time,  was  ascertained  by  the  court  before  which 
the  action  was  pending ;  and  the  creditor  recovered  only  the  differ- 
ence between  such  value  and  the  amount  of  his  claim.  But  in  1878 
it  was  provided  that  the  foreclosure  of  a  mortgage  shall  be  a  bar 
to  any  further  suit  or  action  upon  the  mortgage  debt  or  obliga- 
tion, unless  the  person  or  persons  who  are  liable  for  the  payment 
tliereof  are  made  parties  to  such  foreclosure.  Upon  the  motion  of 
any  party  to  a  foreclosure,  the  court  appoints  three  disinterested 
appraisers,  who  shall,  under  oath,  appraise  the  mortgaged  property 
within  ten  days  after  the  time  limited  for  redemption  shall  have 
expired,  and  shall  make  written  report  of  their  appraisal  to  the 
clerk  of  the  court  where  said  foreclosure  was  had,  which  report 
shall  be  a  part  of  the  files  of  such  foreclosure  suit,  and  such  ap- 
praisal shall  be  final  and  conclusive  as  to  the  value  of  said  mort- 
gaged [)roperty  ;  and  the  mortgage  creditor  in  any  further  suit  or 
action  upon  the  mortgage  debt,  note,  or  obligation,  shall  recover 
only  the  difference  between  the  value  of  the  mortgaged  property 
as  fix(;d  by  such  appraisal  and  the  amount  of  his  claim.*  When 
a  mortgage  has  been  foreclosed,  and  the  time  limited  for  redemp- 
tion has  passed,  and  the  title  to  the  premises  has  become  absolute 

'  G.  S.  1875,  p.  358.  ^  Previous  to  the  statute,  |)asse(l  orig- 

'  In  I'almer  v.  Mead,  7  Conn.  UO,  \r>2,  iiiiiUy  in  18.13,  there  could  he  no  suit  for 

Chief  JuHticc    Hosmer  sjioke  of  a  Hule  of  the  balance  without  opening  the  forcclos- 

thc  mort;,'ai,'cd  jiremi.ies  on  foreclosure  as  urc.     M'lOwcn  v.  Welles,  1  Hoot,  203. 

"a  proceedini^  never  admilled  here."  *  Act?i,  1878,  c.   129. 

vou  II.                                    20  305 


§  1326.]  STATUTORY    PROVISIONS   RKLATING   TO 

in  the  niortgngo  eioilitor,  he  must  sijjjn  ;i  ceTtiliciitL'  describing  the 
promises,  the  deed  of  mortgage  on  which  the  foreclosure  was  hud, 
the  book  and  page  of  record,  and  tlie  time  when  the  title  became 
absolute  ;  which  certificate  must  be  recorded  in  the  records  of 
the  town  wiiere  the  premises  are  situated.^  When  the  mortgage 
has  been  assigned,  the  title  to  the  premises,  upon  the  expiration  of 
the  time  limited  for  redemption  and  on  failure  to  redeem,  vests  in 
the  assignee,  in  the  same  manner  and  to  the  same  extent  as  it 
would  have  vested  in  the  mortgagee,  provided  the  person  so  fore- 
closing shall  fortlnvith  cause  the  decree  of  foreclosure  to  be  re- 
corded in  the  records  of  the  town  where  the  land  lies.^  The  pen- 
dency of  a  petition  for  the  foreclosure  of  any  mortgage  of  or  lien 
upon  any  real  or  personal  estate  is  not  notice  thereof  to  any  per- 
son who  shall  acquire  an  interest  in  such  estate  during  the  pen- 
dency of  sueii  petition,  unless  the  officer,  making  service  of  said 
petition,  shall  leave  a  true  and  attested  copy  thereof  at  the  office 
of  the  town  clerk  of  the  town  in  which  such  mortgage  or  lien  is 
recorded,  at  least  twelve  days  before  the  return  day  of  sucli  peti- 
tion ;  and  no  decree  of  foreclosure  obtained  upon  any  petition  of 
which  a  copy  shall  not  be  left  at  the  town  clerk's  office  as  herein 
provided,  can  in  anywise  affect  the  rights  of  any  person  acquiring 
interest  in  the  property  incumbered  by  such  mortgage  or  lien, 
during  the  pendency  of  the  petition  brought  for  the  foreclosure 
thereof.  It  is  the  duty  of  every  officer  serving  a  petition  for  the 
foreclosure  of  any  mortgage  or  lien  to  leave  a  true  and  attested 
copy  of  such  petition  at  the  town  clerk's  office  in  the  town  where 
such  mortgage  or  lien  is  recorded,  at  least  twelve  days  before  the 
return  day  of  said  petition.^  Whenever  any  foreclosure  or  other 
suit  in  equity  is  brought  asking  for  relief  in  relation  to  lands,  the 
petitioner  may  in  his  bill  pray  for  the  possession  of  such  lands, 
and  the  court  may,  if  it  grant  his  petition,  and  find  he  is  entitled 
to  the  possession  of  such  lands,  issue  its  execution  of  ejectment, 
commanding  the  officer  to  eject  the  person  in  possession  of  such 
lands,  and  to  place  the  petitioner  in  possession  thereof ;  and  such 
officer  shall  proceed  with  such  execution  in  the  same  manner  as 
in  executions  in  ejectment  at  law  ;  but  no  execution  can  issue 
against  any  persons  in  possession  who  are  not  made  parties  to  the 
petition.* 

1  G.  S.  1875,  p.  358,  §  3.  3  AcU,  1877,  c.  133. 

2  G.  S.  1875,  p.  358,  §  5.  «  Acts,  1875,  c.  54. 


FORECLOSURE    AXD   REDEMPTION.  [§  1327. 

1327.  Dakota  Territory.^ — Foreclosure  is  by  an  equitable 
suit  in  accordance  with  the  Code.  The  action  must  be  brought  in 
the  district  court  of  the  county  where  the  premises  or  some  part 
of  them  are  situated  ;  judgment  may  be  rendered  for  the  amount 
of  the  debt  against  the  mortgagor,  and  a  decree  may  be  made  for 
the  sale  of  the  premises,  or  of  such  part  as  may  be  sufficient  to  pay 
the  amount  of  the  judgment.  The  court  ma}'  order  and  compel 
the  delivery  of  the  possession  of  the  premises  to  the  purchaser 
after  the  expiration  of  one  year  from  the  sale  ;  and  may  direct  an 
execution  to  issue  for  the  balance  remaining  unsatisfied.  AVhile 
this  action  is  pending,  no  proceedings  at  law  can  be  had  for  the 
recovery  of  the  debt  or  any  part  of  it  unless  authorized  by  the 
court.  If  any  person  other  than  the  mortgagor  is  liable  for  the 
debt,  a  judgment  for  the  balance  remaining  unsatisfied  after  the 
sale  may  be  entered  against  him  as  well  as  the  mortgagor,  and 
may  be  enforced  by  execution  or  other  process.  The  complainant 
must  state  in  his  complaint  whether  any  proceedings  have  been 
had  at  law  or  otherwise  for  the  recovery  of  the  debt ;  and  if  any 
execution  has  been  issued  for  any  part  of  the  debt,  the  proceed- 
ings cannot  go  on  unless  the  execution  be  returned  unsatisfied  in 
whole  or  in  part,  and  that  the  defendant  has  no  property  whereon 
to  satisfy  it,  except  tlie  mortgaged  premises. 

Sales  under  a  decree  of  foreclosure  are  made  by  a  referee, 
sheriff,  or  deputy  sheriff  of  the  county,  or  other  person  appointed 
by  the  court,  in  the  county  or  subdivision  of  it  wliere  tlie  prem- 
ises or  some  part  of  them  are  situated.  The  oflScer  making  the 
sale  must  give  to  the  purchaser  a  certificate  in  writing,  setting 
forth  the  sum  paid  and  the  time  when  the  purchaser  will  be  en- 
titled to  a  deed,  unless  redeemed  ;  and  if  the  premises  are  not 
redeemed  within  one  year  from  the  time  of  sale,  he  executes  a 
deed  to  the  purchaser.  Redemption  within  that  time  may  be 
made  by  paying  the  purchaser  the  sum  for  which  the  premises 
were  sold,  witii  interest  at  the  rate  of  ten  per  cent,  per  annum. 
The  proceeds  of  the  sale  are  applied  to  the  payment  of  the  debt, 
and  any  surplus  there  may  be  is  brought  into  court  for  the  use  of 
the  persons  entitled  to  it. 

When  the  action  is  brought  for  an  instahiient  of  the  debt  or  of 
thu  interest,  and  otiier  instalments  are  not  tlien  due,  the  bill  is  dis- 
missed upon  payment  at  any  time  before  the  decree  of  sale  of  the 

>   11.  C.  1877,  ]<]>.  61G-G19. 

307 


^  l;128.]  STATUTORY    PROVISIONS    HKI.AllNG    TO 

principal  ami  iiitm-i'st  tluo,  with  costs.  If,  after  a  docroo  of  sale, 
the  luonev  is  brought  into  court,  the  proceedings  are  stayed  until 
a  further  default,  in  case  of  which  the  court  may  enforce  the  col- 
lection of  such  subsequent  instalment.  The  court  may  direct  a 
reference  to  a  master  to  ascertain  whether  the  premises  shall  be 
sold  in  jv.ircels  or  together,  and  may  direct  the  sale  to  be  made 
accordingly.  If  it  appears  that  a  sale  of  the  whole  together  will 
be  most  beneficial  to  the  .parties,  the  decree  may  be  in  the  first 
instance  entered  for  the  sale  of  the  whole.  In  that  case  the  pro- 
ceeds are  applied  to  the  payment  as  well  of  the  part  of  the  debt 
already  due  as  that  which  is  not  then  due ;  and  if  the  residue 
which  is  not  then  payable  does  not  bear  interest,  a  proper  rebate 
of  interest  is  made. 

1328.  Delaware.^  —  Foreclosure  is  by  scire  facias.  Upon 
breach  of  the  condition  of  a  mortgage  by  non-payment  of  the 
mortgage  money,  or  non-pei-formanee  of  the  conditions  stipulated 
in  such  mortgage,  at  the  times  and  in  the  manner  therein  pro- 
vided, the  mortgagee,  his  heirs,  executors,  administrator,  or  as- 
signs, may,  in  the  county  where  the  premises  are  situated,  sue 
out  a  writ  of  scire  facias,  directed  to  the  sheriff,  commanding  him 
to  make  known  to  the  mortgagor,  his  heirs,  executors,  or  adminis- 
trators, that  he  or  they  show  cause  why  the  premises  ought  not  to 
be  taken  on  execution  for  payment  of  said  money  and  interest,  or 
to  satisfy  the  damages  which  the  plaintiff  shall  suggest  for  the 
non-performance  of  said  conditions.  The  defendant  may  plead 
satisfaction  or  other  plea  in  avoidance  of  the  deed.  Judgment 
is  entered  that  the  plaintiff  have  execution  by  levari  facias,  under 
which  the  premises  are  sold,  and  after  confirmation  of  the  sale 
conveyed  to  the  purchaser,  who  takes  a  title  discharged  of  all 
equity  of  redemption,  and  all  other  incumbrances  made  by  the 
mortgagor,  his  heirs,  or  assigns.  Any  overplus  is  rendered  to  the 
debtor  or  defendant. 

But  if  there  be  no  sale  for  want  of  bidders  return  is  made  ac- 
cordingly, and  thereupon  a  liberari  facias  may  issue,  under  which 
the  otHcer  delivers  to  the  plaintiff  such  part  of  the  premises  as 
shall  satisfy  his  debt  or  damages  with  interest  and  costs,  accord- 
ing to  the  valuation  of  twelve  men,  to  hold  to  him  as  his  free  ten- 
ement in  satisfaction  of  his  debt,  or  so  much  of  it  as  the  premises 
by  the  valuation  amount  to.     If  they  fall  short  of  satisfying  the 

1  R.  C.  1874,  p.  687. 

308 


FORECLOSURE   AND   REDEMPTION.       [§§  1329,  1330. 

whole   debt,   the    plaintiff  may  have   execution  for  the  residue. 
The  execution  and  return  pass  the  title.^ 

1329.  District  of  Columbia.^  —  Foreclosure  is  under  the  gen- 
eral equity  jurisdiction  of  the  court.  The  only  statutory  provi- 
sion relating  to  it  is  that  publication  may  be  substituted  for  per- 
sonal service  of  process  upon  any  defendant  who  cainiot  be  found. 
Deeds  of  trust  are,  however,  almost  exclusively  used. 

1330.  Florida.^  —  Foreclosure  may  be  had  by  petition  in  a 
court  of  common  law,  although  the  courts  of  equity  also  have 
jurisdiction  of  the  subject ;  but  inasmuch  as  the  statutory  pro- 
visions for  foreclosing  by  petition  allow  a  personal  judgment  for 
any  balance  of  the  mortgage  debt  remaining  unsatisfied  after  a 
sale  of  the  premises,  this  is  the  more  convenient  method.^  The 
statutory  process  of  foreclosure  in  a  court  of  common  law  is  not 
distinctively  a  common  law  action  ;  it  is  in  fact  conducted  accord- 
ing to  equitable  principles.  It  is  brought  in  the  circuit  court  of 
the  county  where  the  lands  lie,  and,  like  a  bill  in  equity,  sets  forth 
the  parties  to  the  mortgage  and  the  petitioner's  title,  and  describes 
the  premises  and  the  debt  secured. 

The  object  of  the  statute  allowing  foreclosure  by  petition  was 
to  prevent  the  necessity  of  two  suits  ;  one  in  equity  to  foreclose, 
and  a  suit  at  law  on  the  bond  or  note.  The  proceedings  are  in 
rem  as  to  the  foreclosure,  and  in  pe7'Sonam  as  to  the  judgment  for 
the  debt  or  demand.  In  order  to  use  this  process  there  must  be 
property  upon  which  the  decree  of  foreclosure  can  act. 

Before  this  statute  the  mortgagee  had  his  option  to  proceed  in 
equity  against  the  property,  or  at  law  on  his  bond  or  note  ;  and 
he  may  now  as  formerly  pursue  either  remed}^  or  both  at  the  same 
time,  but  not  in  the  same  forum  or  in  the  same  suit.  This  can 
only  be  accomplished  by  means  of  the  statute-^ 

The  petition  prays  that  the  mortgagor  and  all  persons  claiming 
under  him  be  barred  of  all  equity  of  redemption.  The  original 
mortgage,  or  a  copy  of  it  duly  certified,  must  form  a  part  of  every 
petition  or  bill  of  complaint  for  foreclosure.^  It  is  filed  at  least 
four  months  before  the  term  of  the  court  at  which  the  judgment 
of  foreclosure  c;an  be  renderi'd.      When   the  mortgagor  or  person 

'   R.  f:.  p.  f,«2.  ■»  Jii<l{,'o  V.  ForHyth,  11  Klii.  257. 

2  U.  S.  1874,  p.  03.  ^  .1(1(1^0  V.  Fo-.-HVlh,  11  Kla.  '2r>7. 

»  Bimh's    Diir.  of    Slat.  |.p.   606,   607;         •  Laws  of  Florida,  1874,  p.  75. 
Laws,  1874,  p.  75. 

309 


§  1381.]  STATUTORY    I'KOVISIONS    KKI.A  IINT.    TO 

intorcstfd  in  tlio  equity  rcsidoa  (Uit.  of  the  st;ito,  notice  must  bo 
given  by  ]>ubliojition  in  some  newspaper  printed  within  the  dis- 
trict, or  that  next  adjoining,  once  every  two  weeks  for  at  least 
four  niontlis  before  the  first  (hiy  of  the  term.  Such  pubhcation 
must  also  be  made  when  the  party  resides  in  the  state  but  is 
beyond  the  reach  of  process.  In  all  other  cases  personal  service 
must  be  made. 

Juilgnient  on  the  foreclosure  of  a  mortgage  is  entered  up  and 
execution  issued  as  in  other  cases. 

The  court  has  power  to  adjudge  and  direct  the  payment  by  the 
mortgagor  of  any  residue  of  the  mortgage  debt  that  may  remain 
due  and  unsatisfied  after  a  sale  of  the  mortgaged  premises.^  In 
cases  in  which  the  mortgagor  is  personally  liable  for  the  debt 
secured  by  such  mortgage,  and  if  the  mortgage  debt  be  secured 
by  the  covenant  or  obligation  of  any  person  other  than  the  mort- 
gagor, the  plaintiff  uiay  make  such  person  a  party  to  the  action  ; 
and  the  court  may  adjudge  payment  of  the  residue  of  such  debt 
remaining  due  and  unsatisfied,  after  the  sale  of  the  mortgaged 
premises,  against  such  other  person,  and  may  enforce  such  judg- 
ment as  in  other  cases.  Upon  sale  under  execution  the  officer 
executes  a  deed  to  the  purchaser,  and  pays  any  surplus  to  the  de- 
fendant.    There  is  no  redemption.^ 

1331.  Georgia.^ —  Foreclosures  may  be  had  by  a  bill  in  equity 
when  the  mode  provided  by  statute  is  inadequate.*  Mortgages 
are  usually  foreclosed  by  petition,  which  must  be  to  the  court  in 
the  county  where  the  property  is  situated.     This  is  a  proceeding 

1  Dij;.  of  Stat.  pp.  489,  490.  sons  are  interfered  with,  they  are  not  al- 

2  Di<:.  of  Stat.  p.  .330.  lowed  to  interpose  any  claim  in  the  suit, 

3  Code,  1873,  §§3962-3968.  This  mode  but  may  have  their  remedy  when  the 
of  foreclosure  is  a  substitute  for  a  bill  in  mortgage  execution  is  sought  to  be  en- 
equity.  It  is  not  absolutely  necessary  as  forced  against  the  land.  Jackson  v.  Stan- 
in  equity  that  all  parties  in  interest  should  ford,  19  Ga.  14;  Howard  v.  Gresham,  27 
be  made  parties,  in  order  that  the  judg-  Ga.  347.  As  to  jurisdiction,  a  court  in 
ment  should  be  binding  upon  them  ;  as,  another  county,  though  it  be  the  county 
for  instance,  the  judgment  is  binding  upon  of  the  mortgagor's  residence,  has  none. 
a  purchaser  of  the  equity  of  redemption,  The  proceedings  of  such  court  would  be 
although  he  was  not  made  a  party  to  the  void.  Hackenhull  v.  Westbrook,  53  Ga. 
proceeding.     Knowles  v.  Lawton,  18  Ga.  285. 

476  ;  Johnston  v.  Crawley,  22  Ga.  348  ;         *  May  v.  Rawson,  21   Ga.  461  ;  Dixon 

S.  C.  25  Ga.  316;    Guerin  v.  Danforth,  v.  Cuyler,  27  Ga.  248,  251.     A  remedy  at 

45  Ga.  493,  496.     No  parties  to  the  suit  law  being  provided,  jurisdiction  in  equity 

are  necessary  other  than   the  mortgagor  is  lost  when  this  remedy  is  complete, 
and  mortgagee.    If  the  rights  of  other  per- 

310 


FORECLOSURE   AND   REDEMPTION.  [§  1381. 

at  law.  The  court  grants  a  rule  nisi  directing  the  principal,  in- 
terest, and  costs  to  be  paid  into  court  on  or  before  the  first  day  of 
the  next  terra  immediately  succeeding  the  one  at  which  the  rule 
is  granted,  which  rule  is  published  once  a  month  for  four  months, 
or  served  on  the  mortgagor,  or  his  special  agent  or  attorney,  at 
least  three  months  previous  to  the  time  at  which  the  money  is  di- 
rected to  be  paid  into  court.i  At  the  term  at  which  the  money  is 
directed  to  be  paid  the  mortgagor  may  set  up  and  avail  himself  of 
any  defence  which  he  might  lawfully  set  up  in  an  ordinary  suit 
instituted  on  the  debt  secured  by  such  mortgage.^  The  issue  is 
tried  by  a  special  jury. 

It  is  not  competent  for  any  third  person  to  interpose  a  defence  ; 
nor  will  the  court  itself,  of  its  own  motion,  do  so.^  When  the 
mortgagor  is  dead,  the  proceeding  may  be  instituted  against  his 
executor  or  administrator.^  Judgment  is  entered  for  the  amount 
due,  and  the  property  is  ordered  to  be  sold  in  the  manner  of  a  sale 
under  execution  from  which  there  is  no  redemption.^  The  pro- 
ceeds, after  paying  the  mortgage,  are  paid  to  the  mortgagor  or 
his  agent.  If  the  mortgage  is  given  to  secure  a  debt  due  by  in- 
stalments, and  is  foreclosed  before  they  are  all  due,  and  there  is  a 
surplus,  the  court  may  retain  the  funds,  or  order  the  same  to  be 
invested  to  meet  the  instalments  still  -unpaid.  A  creditor  of  the 
mortgagor  wishing  to  contest  the  validity  or  fairness  of  the  mort- 
gage debt  may  make  affidavit  of  the  facts  upon  which  he  relies, 
and  upon  filing  the  same  with  the  levying  officer,  with  a  bond 
and  good  security  payable  to  the  mortgagee,  conditioned  to  pay 
all  costs  and  damages  incurred  by  the  delay  if  the  issue  be  found 
against  him,  the  officer  returns  the  same  to  the  court  at  which  the 

1  When  the  rnle  hns  been  ma<lc  al.so-  ^  See  Dickerson  r.  Powell,  21  Ga.  143. 
lute  there  in  no  appeal  from  it.  Clifton  v.  This  proceed ini?  by  petition  is  not  confined 
Livor,  24  Ga.  91.  It  need  not  show  on  its  to  mort^'riKCS  made  to  secure  li(iiiidated 
face  what  particular  credits  were  allowed  demands.  Richards  v.  Bibb  Co.  Loan  As- 
ia fixinK  the  amount  of  the  debt.  Cherry  gociation,  24  Ga.  198.  The  juiii:ment  is 
V.  Home  Building  &  Loan  Asso.  57  Ga.  not  conclusive  against  one  interested  in  the 
.361 .  property  who  was  not  made  a  party  to  the 

^  Dixon  V.  Cuyler,  27  Ga.  248.  proceedings,  a.s,  for  instance,  one  who  has 

«  Sutton  V.  Sufton,  25  Ga.  .38.3  ;  .Tack-  purchased   the  property  prior  to  the  com- 

Hon  V.  Stanford,  19  Ga.  14.  mencement  of  proceedings.    Upon  the  levy 

♦  If  there  is  no  admini.ntrator,  and   the  of  the  execution    he  may  go   behind    the 

equity  of   redcm|)tion  has   been   assigned,  judgment,   and    claim   that   the   mortgage 

the  proceeding  should  Ijc  in  equity.     May  was  barred  by  the  statute  of  limitations. 

V.  Rawson,  21  Ga.  401.  Williams  i'.  Terrell,  54  (Ja.  462. 

311 


§  1332.]  STATUTORY    PROVISIONS    RELATING    TO 

nutrtgiij^t'  /?.,/"(?.  is  niMdi;  n'luriiablo  to  be,  tried. ^  Jf  tlio  iiiortgiige 
seouros  instjilmouts  or  several  debts  falling  due  at  different  times, 
the  mortgagee  may  foreclose  when  the  first  becomes  due,  and  the 
court  will  I'ontrol  the  surplus  so  as  to  protect  the  debts  not  due  ; 
and  so  if  there  be  several  mortgages  of  equal  date  embraced  in 
the  same  mortgage,  and  one  foreclose,  the  court  controls  the 
funds  to  distribute  to  the  several  mortgagees  according  to  their 
several  claims.^ 

1332.  Idaho  Territory.^  —  Thei-e  can  be  but  one  action  for  the 
recovery  of  any  debt,  or  the  enforcement  of  any  right  secured  by 
mortgage  upon  real  estate  or  personal  property,  in  which  action 
the  court  may  by  its  judgment  direct  a  sale  of  the  incumbered 
property,  or  so  much  thereof  as  may  be  necessary,  and  the  appli- 
cation of  the  proceeds  of  the  sale  to  the  payment  of  the  costs  of 
the  court  and  the  expenses  of  the  sale,  and  the  amount  due  to  the 
plaintiff ;  and  if  it  appear  from  the  sheriff's  return  that  the  pro- 
ceeds are  insufficient,  and  a  balance  still  remains  due,  judgment 
can  then  be  docketed  for  such  balance  against  the  defendant  per- 
sonallv  for  the  debt,  and  it  becomes  a  lien  on  the  real  estate  of 
such  judgment  debtor,  as  in  other  cases,  on  which  execution  may 
be  issued.  No  person  holding  a  conveyance  from  or  under  the 
mortgagor  of  the  property  mortgaged,  or  having  a  lien  thereon, 
which  conveyance  or  lien  does  not  appear  of  record  in  the  proper 
office  at  the  time  of  the  commencement  of  the  action,  need  be 
made  a  party  to  such  action  ;  and  the  judgment  therein  ren- 
dered, and  the  proceedings  therein  had,  are  as  conclusive  against 
the  party  holding  such  unrecorded  conveyance  or  lien  as  if  he 
had  been  made  a  party  to  the  action.  If  there  be  surplus 
money  remaining  after  payment  of  the  amount  due  on  the  mort- 
gage, lien,  or  incumbrance,  with  costs,  the  court  may  cause  the 
same  to  be  paid  to  the  person  entitled  to  it,  and  in  the  mean 
time  may  direct  it  to  be  deposited  in  court.  If  the  debt  for 
which  the  mortgage,  lien,  or  incumbrance  is  held  be  not  all  due, 
so  soon  as  sufficient  of  the  property  has  been  sold  to  pay  the 
amount  due,  with  costs,  the  sale  sliall  cease  ;  and  afterwards,  as 
often  as  more  becomes  due  for  principal  or  interest,  the  court  may, 
on  motion,  order  more  to  be  sold.  But  if  the  property  cannot  be 
sold  in  portions  without  injury  to  the  parties,  the  whole   may  be 

1  Code,  1873,  §  3979.  «  Rev.  Laws,  1875,  §§  267,  269,  of  Civil 

2  Code,  1873,  §§  196.5,  1966.  Proceedings,  p.  144. 

312 


FORECLOSURE   AND   REDEMPTION.  [§  1333. 

ordered  to  be  sold  in  the  first  instance,  and  the  entire  debt  and 
costs  paid,  there  being  a  rebate  of  interest  where  such  rebate  is 
proper. 

1333.  Illinois.  —  Mortgages  may  be  foreclosed  in  equity  al- 
though tlie  statutory  provisions  relate  chiefly  to  proceedings  by 
scire  facias,  and  to  sales  under  powers  contained  in  mortgages.^ 
In  equity  a  decree  may  be  rendered  for  any  balance  of  money 
that  may  be  found  due  over  and  above  the  proceeds  of  the  sale, 
and  execution  may  issue  for  the  collection  of  such  balance  in  the 
same  way  as  when  the  decree  is  solely  for  the  payment  of  money. 
Such  decree  may  be  rendered  conditionally  at  the  time  of  decree- 
ing the  foreclosure,  or  it  may  be  rendered  after  the  sale  and  the 
ascertainment  of  the  balance  due.^ 

The  court  in  proper  cases  will  decree  a  strict  foreclosure  ;  but 
this  is  not  allowed  in  case  of  mortgages  by  executors,  guardians, 
and  conservators.^ 

Foreclosure  hy  Scire  Facias.^ 

If  default  be  made  in  the  payment  of  a  mortgage  duly  executed 
and  recorded,  and  if  it  be  payable  by  instalments  and  the  last 
instalment  has  become  due,  a  writ  of  scire  facias  may  be  sued  out 
of  the  circuit  court  of  the  county  where  the  lands  or  any  part  of 
them  are  situated,  requiring  the  mortgagor,  or  his  representatives, 
to  show  cause  why  judgment  should  not  be  rendered  for  the 
amount  due  under  the  mortgage.  No  declaration  need  be  filed. 
The  defendant  may  set  off  any  demand  in  his  favor.^  Judgment 
is  rendered  for  the  amount  found  due,  and  the  premises  are  sold 
to  satisfy  it.  Such  judgment  does  not  create  a  lien  on  any  other 
lands  than  the  mortgaged  premises,  nor  is  any  other  property  of 

»  See  Statutes  on  Power  of  Sale  Mort-  not   be  shown  in    this  proceeding.     Fitz- 

pages,  chapter  xxxix.  gerald  v.  Forristal,48  III.  228  ;  Woodbury 

••'  U.  S.  1874,  p.  714;  R.  S.  1877,  p.  67C.  v.  Manlove,  14  111.   213.     This  is  a  pro- 

•  U.  S.  1877,  pp.  120,  .'J40,  e.'ja.  cecdinf;  upon  the  mortfrai^e,  and  must  be 

«  U.  S.  1874,  p.  714  ;  K.  S.  1877,  p.  677.  by  the  mortgagee  holding  the  legal  title. 

For  form  of  this  writ  see  Woodbury  v.  It  does  not  matter  that  the  note  has  been 

Manlove,  14  III.  21.3  ;  approved  in  Osgood  assigned.    Camp  v.  Small,  44  111.  37  ;  Olds 

V.  Stevens,  25  111.  89.    When  foreclosure  is  v.  Cummings,  31  111.  188. 
hy  Bcire  ffirifts,  subsequent  incumliranccrs         *  See  Henderson  i;.  Palmer,  71  III.  .')79. 
arc  cut  off,  though   not  made  direct  par-         No    defence   can    be    interposed    except 

ties  to  the  proceeding.    Kenyon  v.  Shreck,  payment,  or  that  the  mortgage  was  never 

.S2  111.  3S2;   Mattestf.n  r.  Thomas,  41  111.  a  valid  lien.     Camp  r.  Small,  «"/'ra. 
1 10     Failure  or  want  of  consideration  can- 

313 


§  13o3.]  STATUTOHY    PROVISIONS    RKLATINO    TO 

tlu>  iHiirtga^iU-  liable  \o  satisfy  llie  saino  cxoi^pt  such  otluM'  jti'op- 
ertv  as  tlio  m(irt<^Mixor  has  <jjiv(Mi  as  collateral  sc'cnrity  for  this  pur- 
poso.  This  is  purely  a  proeoediug  at  law,  and  is  governed  by  tlio 
jM-aetiee  of  courts  of  law  and  not  of  equity.^ 

The  action  must  be  brought  by  the  person  who  holds  the  legal 
title  to  the  mortgage,  and  consequently  if  the  note  alone  has  been 
assigned  the  suit  should  be  brought  by  the  mortgjigee.^  No  per- 
sons but  the  mortgagor,  or,  in  case  of  his  death,  his  executor  or 
administrator,  are  required  to  be  made  parties.  If  the  wife  joined 
in  the  mortgage  she  is  a  necessary  party.  Tlie  mortgagor's  assignee 
in  bankruptcy  is  not  a  necessai-y  party. ^  All  persons  beyond  the 
parties  to  the  suit  are  required  to  take  notice  of  the  proceedings 
and  to  protect  their  I'ights.*  No  defence  can  be  interposed  ex- 
cept payment  or  release,  or  that  the  mortgage  was  invalid.'^ 
Usury  cannot  be  set  up ;  ^  nor  the  want  or  failure  of  considera- 
tion.'^ This  form  of  foreclosure  cannot  be  used  in  case  of  a  mort- 
gage made  to  secure  the  delivei'y  of  specific  articles.  It  cannot  be 
maintained  till  the  last  instalment  of  the  mortgage  is  due,  and  this 
fact  should  be  alleged.  Any  remedy  before  this  must  be  sought 
by  ejectment,  or  by  bill  in  chancery.^  The  purchaser  at  a  sale 
under  a  judgment  in  such  action  takes  all  the  interest  in  the  land 
which  the  mortgagor  had  when  he  executed  the  mortgage.^  The 
mortgagor,  or  his  grantees  since  the  mortgage,  may  redeem,  as 
in  the  case  of  an  ordinary  sale  on  execution.  The  judgment  is 
against  the  property  and  not  against  the  person.^'' 

When  a  sale  is  made  by  virtue  of  an  execution,  judgment,  or 
decree  of  foreclosure,  the  officer  gives  a  certificate  of  sale.^^  The 
owner  of  the  equity  or  any  person  interested  in  it  may  redeem  at 
any  time  within   twelve   months   from   the   sale,   by  paying  the 

1  Tucker  r.  Conwell,  67  111.  552  ;  Wood-  llawlc  (Pn.),  lGG;Day  v.  Cushman,  1 
bury  V.  Manlove,  14  III.  213.  Scam.  475. 

2  Camp  V.  Small,  44  III.  37.  »  State  Bank  v.  Wilson,  9  111.  57.     See, 
»  Gilbert  i-.  Mapgord,  1  Scam.  471.             also,  Walbridge  v.  Day,  31  111.  379. 

*  Chickerinf;  v.  Failes,  26  111.  507.  ^'^  Osgood  v.  Stevens,  su/)rn  ;  Marshall  v. 

5  Camp  V.  Small,  si//>ra  ;  White  v.  Wat-  Maury,  1  Scam.  231  ;  Slate  Bank  of  III. 

king,  23  III.  480.  v.  Wil.son,  9  III.  57. 

^  Carpenter  v  Moocrs,  26  111.  162.  "  II.   S.  1877,  p.  596.     A  certificate  of 

■^  Hall  I'.  Byrne,  1  Scam.  140;  McCum-  purchase  issued  to  a  person  other  than  the 

ber  V.  Oilman,  13  111.  542.  one  who,  by  the  shcriflfs  return,  is  shown 

'  Osgood  V.  Stevens,  25  111,  89 ;  Carroll  to  be  the  purchaser,  is  void.     Dickerman 

V.  Ballance,  26  111.  9  ;  Fickes  v.  Erseck,  1  v.  Burgess,  20  111.  266. 
314 


FORECLOSURE   AND   REDEMPTION.  [§  1334. 

amount  bid,  with  interest  at  the  rate  of  ten  per  cent,  per  annum.^ 
A  judgment  creditor  may  redeem  after  twelve  months  and  within 
fifteen  months  after  the  sale,  and  there  may  be  successive  redemp- 
tions within  sixty  days  from  the  hist  redemption.^  After  the  ex- 
piration of  the  time  of  redemption  the  party  entitled  to  posses- 
sion, after  a  demand  in  writing,  may  have  summary  process  to 
recover  it. 

1334.  Indiana.^  —  Foreclosure  is  by  complaint  in  the  court  of 
common  pleas  or  circuit  court  where  the  land  lies.  If  the  land 
lies  in  more  than  one  county  the  court  of  either  has  jurisdiction.* 
It  is  sufficient  to  make  the  mortgagee,  or  the  assignee  shown  by 
said  record  to  hold  an  interest  therein,  defendants.  All  persons 
failing  to  cause  assignments  to  them  to  be  made  or  put  of  record, 
unless  they  cause  themselves  to  be  made  parties  pending  the  ac- 
tion, are  bound  by  such  decree  as  may  be  rendered,  the  same  as  if 
they  had  been  made  parties  to  the  suit.  And  any  purchaser  at  a 
judicial  sale  of  the  mortgaged  premises,  or  any  part  thereof,  under 
such  decree,  or  claiming  title  under  the  same,  buying  without  act- 
ual notice  of  any  assignment  not  then  of  record,  or  of  the  trans- 
fer of  any  note,  the  holder  whereof  was  not  a  party  to  the  action, 
holds  the  premises,  so  purchased,  free  and  discharged  of  such  lien. 

1  Selit,'man  v.  Laubheimer,  58  111.  124.  an   assignment  of  the  certificate  of  pur- 

The  payment  required  is  the  amount  bid  chase.     Grob   v.    Cushman,  45  111.    119; 

at  the   sale,  and  not  the  amount   of  the  Forcible    Entry  and  Detainer  Act,  §  2  ; 

mortgage  debt.     The  construction  of  the  Rev.  Stat.  1874,  p.  535. 
Iowa   statute  is  different,  requiring   pay-         ^  Revision,  1876.  vol.  2,  p.  259;  Gavin 

ment  of  the  amount  of  the  debt  instead  of  &  Hord,  1862,  vol.  2,  p.  289. 
the  amount  bid.     Stoddard  v.  Forlics,  1.3         *  Holmes  v.  Taylor,  48  Ind.  169.     The 

Iowa,  296;  Johnson  v.  Harmon,  19  Iowa,  form  of  complaint  given  by  statute  is  as 

56.     The  case  of  Bradley  v.   Snyd.r,   14  follows :  "  A.  B.  complains  of  C.  D.,  and 

III.  26.3,  is  not  contrary  to  this,  as  the  re-  says  that  the  defendant  executed  a  mort- 

demption   in  the  latter  was  not  strictly  a  gage  conveying  to  the  plaintiff  the  tract  of 

statutory  riL'ht.     There  can  be  no  decree  land  therein  described,  as  security  for  the 

for  sale  without   redemption.     Farrell   v.  payment  of  a  debt  evidenced  by  a  note,  a 

Parlier,  50  III.  274.  copy  of  each  of  which  is  filed  herewith, 

'  A  purchaser  of  the  equity  of  redemp-  amounting  to  dollars,  which  yet 

tion  is  allowed  the  twelvemonths  for  re-  remains  unpaid:  wherefore  he  asks  judg- 

<lemption  prescribed  for  the  mortgagor,  and  ment  for  dollars,  and  the  foreclosure 

not  the   fifteen  allowed  a  judgment  cred-  of  the  mortgage,  and  sale  of  the  |)roperty, 

itor.     Dunn  i\  IJodgers,  43  III.  260.     The  or  so  much  thereof  as  may  be  necessary  to 

judgment   creditor,    upon    redemption,    is  pay  his  debt,  and  for  other  relief."     Ih.  p. 

•ubrogated   to  all    the  rights  of  the  pur-  359.     There  can  be  no  foreclosure  except 

chaser  under  the    foreclosure  sale.      Lamb  by  judicial  sale,  and  therefore  [)Ower  of  sale 

V.  Rirbards,  43  111.  312.     He  may  redeem  mortgages  and  trust  deeds  are  not  in  use. 
against  a  second  mortgagee  who  has  taken 

315 


§  1834.]  STATUTORY    PROVISIONS   RELATING   TO 

r.ut  niiv  assigncf  or  transferee  may  rcnleem  said  premises,  like,  any 
other  creditor,  diirinjjj  the  period  of  one  year  allowed  by  statute 
after  such  sales. ^  If  there  be  no  express  agreeni(;nt  in  the  niort- 
gajjjo,  nor  any  s(>parate  instrument  secured,  the  remedy  is  confined 
to  the  projiertv  mortgaged.  The  premises,  or  so  much  thereof  as 
may  be  necessary,  are  sold  to  satisfy  the  mortgage.  Payment  of 
the  debt  with  interest  and  costs  at  any  time  before  sale  satisfies 
the  judgment.  In  the  order  of  sale  the  court  directs  that  the 
balance  due  on  the  mortgage  and  costs,  which  remain  unsatisfied 
after  sale,  shall  be  levied  of  any  property  of  the  mortgage  debtor. 
Actions  on  the  debt  or  note  and  to  foreclose  the  mortgage  cannot 
be  prosecuted  at  the  same  time.  When  the  comi)laint  is  in  conse- 
quence of  the  non-payment  of  an  instalment  of  interest  or  of  the 
principal,  and  the  whole  debt  is  not  due,  it  is  dismissed  on  pay- 
ment into  court  at  any  time  before  judgment  of  the  amount  then 
due  ;  if  the  payment  be  made  after  final  judgment,  proceedings 
thereon  are  stayed,  subject  to  be  enforced  upon  a  subsequent  de- 
fault. In  the  final  judgment  the  court  directs  at  what  time  execu- 
tion shall  issue.2  The  court  in  such  cases  ascertains  whether  the 
property  can  be  sold  in  parcels,  and  if  this  can  be  done  without 
injury,  it  directs  so  much  only  of  the  premises  to  be  sold  as  will 
be  sufficient  to  pay  the  amount  due  on  the  mortgage  with  costs. 
If  the  premises  cannot  be  sold  in  parcels  the  court  orders  the 
whole  to  be  sold,  and  the  proceeds  applied  first  to  the  payment  of 
the  principal  due,  interest,  and  costs,  and  then  to  the  residue  se- 
cured and  not  due,  with  a  proper  discount  of  interest.^ 

1  As  to  notice  of  pendency  of  suit  to  court  must  also  direct  the  order  of  sale. 
non-resident  holder  of  the  equity  of  re-  A  decree  j^iving  the  plaintiff  the  right  to 
demption,  see  2  R.  S.  1876,  p.  49;  Fon-  direct  the  sale  is  erroneous.  Knarr  v. 
taine  v.  Houston,  58  Ind.  316  ;  Acts,  1877,  Conaway,  42  Ind.  260.  The  failure  of  the 
c.  58,  §  2.  court  to  determine  whether  the  premises 

2  See  Skelton  v.  Ward,  51  Ind.  46.  are  divisible  does  not>  render  the  order  of 
'  Generally  when  divisible  the  premises  sale  void ;  but  it  may  be  set  aside  on  sea- 
should  be  sold  in  parcels.  Frame  v.  Bell,  sonabie  application.  Cassel  v.  Cassel  26 
16  Ind.  229  ;  Dale  v.  Bugh,  16  Ind.  2.33  ;  Ind.  90;  Thompson  v.  Davis,  29  Ind.  264. 
Piel  V.  Brayer,  30  Ind.  332.  This  statute.  The  sale  must  be  made  according  to  the 
however,  applies  only  to  cases  where  part  statute  in  force  when  the  mortgage  was 
of  the  mortgage  is  not  due.  Harris  v.  executed.  Wolf  v.  Heath,  7  Blackf.  154; 
Makepeace,  13  Ind.  560 ;  Smith  v.  Pierce,  Franklin  v.  Thurston,  8  Blackf.  160.  If 
15  Ind.  210  ;  Benton  v.  Wood,  17  Ind.  260  ;  the  land  is  situate  in  two  counties,  the  part 
Denny  v.  Graetcr,  20  Ind.  20.  Whether  in  each  must  be  sold  at  the  door  of  the 
the  premises  are  susceptible  of  division  is  court-house  of  the  county  where  it  is  situ- 
a  question  for  the  court  to  .decide.     The  ated.     Holmes  v.  Taylor,  48  Ind.  169. 

816 


FORECLOSURE   AND    REDEMPTION.  [§  1335. 

In  making  sale  the  sheriff  or  other  officer  issues  to  the  pur- 
chaser a  certificate,  which  entitles  the  holder  of  it  to  a  deed  of 
conveyance,  to  be  executed  by  the  officer  at  the  expiration  of  one 
year  from  the  date  of  the  sale,  if  the  property  has  not  been  pre- 
viously redeemed.!  The  debtor  is  in  the  mean  time  entitled  to 
the  possession  of  the  premises,  but  in  case  they  are  not  redeemed 
he  is  liable  to  the  purchaser  for  their  reasonable  rents  and  prof- 
its. Redemption  may  be  made  by  any  one  having  an  interest 
in  the  property  at  any  time  within  one  year  from  the  date  of 
sale,  by  paying  to  the  purchaser,  or  to  the  clerk  of  the  court 
from  which  the  order  of  sale  was  issued  for  the  use  of  the  pur- 
chaser, the  amount  of  the  purchase  money,  with  interest  at  the 
rate  of  ten  per  cent,  per  annum.^  When  a  mortgagee  or  judg- 
ment creditor  redeems,  he  retains  a  lien  on  the  premises  for  the 
amount  paid  for  redemption  against  the  owner  or  any  junior  in- 
cumbrancer.^ 

1335.  Iowa.*  —  All  deeds  of  trust  and  mortgages  of  real  estate, 
whether  they  contain  a  power  of  sale  or  not,  must  be  foreclosed 
by  an  equitable  proceeding  in  court.  In  such  action  judgment  is 
entered  for  the  entire  amount  found  due,  and  under  a  special  ex- 
ecution the  property,  or  so  much  as  is  necessary,  is  sold  to  satisfy 
it  with  interest  and  costs.  If  the  property  does  not  sell  for 
enough  to  satisfy  the  judgment,  a  general  execution  may  be  is- 
sued for  the  balance,  unless  the  parties  have  stipulated  otherwise.^ 
A  personal    judgment  cannot  be  rendered   against  a  subsequent 

'  The   certificate  of  purchase   may  be  r.  Lnngsdale,  41  Ind.  399.    A  mortgagee 

assigned,  and  the  deed  is  then  made  to  the  havin};  a  judgment  for  a  deficiency  may 

assignee.    Sphihn  u.  Gillespie,  48  Ind.  397  ;  also  redeem.     Greene  v.   Doane,  57  Ind. 

Davis  V.  Langsdale,  41  Ind.  399.     On   the  186.     Sec  §  1069. 

decease  of  the  holder  of  the  certificate,  the  ^  Statntes  of  Indiana,  Gavin  &  Ilord, 

deed  may  be  made    to  his  heirs  or  devi-  vol.  2,   p.   2.')1  ;   Revision,  1870,  vol.  2,  p. 

sees.     Sumner  i;.  Palmer,  10  Rich.  (S.  (!.)  220. 

L.  38  ;  McKlmurray  v.  Ardis,  3  Strob.  (S.  ••  See  Code,  1873,  §§  3319-3330.     This 

C.)  L.  212;  Swink.  r.  Thompson,  31    .Mo.  is    a    statutory  proceeding,  to  wliicli    the 

336.  court  will  apply  the  iirincijdes  both  of  law 

*  A  literal  construction  should  be  given  and    of    eipiiiy.       Kramer    v.   Rel)man,  9 

to  the  right  of  redemption.     A  holder  of  Iowa,  114;  McDowell  v.  Lloyd,  22  Iowa, 

one  of  Bcverai  mortgage   notes  who   has  448;    Ilartman  v.  Clarke,  11   Iowa,  510; 

filed   a  crossbill    in    proceedings   by  the  Packard  j;.  Kingman,  11  Iowa,  221. 

holder  of  another  note,  and   obtained   a  ^  Chittenden  d.  Gossage,  18  Iowa,  158; 

judgment  for  foreclosure   as   to  the  note  Konnion  y.  Kelsey,  10  Iowa,  443 ;  Elmore 

held  by  him,  may  redeem  from  the  fore-  v.  Uiggins,  20  Iowa,  250. 
closure  sale,  as  a  judgment  creditor.   Davis 

317 


§1335.]  STATU  lOKY    rUOVISIONS    RKLATING   TO 

pui-eliastn-  who  has  not  assuiiuHl  the  mortgage.'  But  a  subsequent 
purchaser  who  has  assuniecl  the  payment  of  the  mortgage  debt  is 
liable  to  a  personal  juilgment ;  and  parol  evidence  is  admissible  to 
prove  his  agreement  to  assume  the  debt.- 

At  any  time  prior  to  the  sale,  a  person  having  a  lien  subse- 
quent to  the  nun-tgage  is  entitled  to  an  assignment  of  all  the  in- 
terest of  the  holder  of  the  mortgage  on  paying  him  the  amount 
secured,  with  interest  and  costs,  together  with  the  amount  of 
any  other  liens  of  the  same  holder  which  are  paramount  to  his. 
The  holder  of  the  note  and  mortgage  may  bring  a  suit  at  law 
upon  the  note,  and  a  suit  in  equity  to  foreclose  the  mortgage, 
but  must  elect  upon  which  he  will  proceed.  So  far  as  prac- 
ticable, the  property  sold  must  be  sutticient  only  to  satisfy  the 
mortgage. 

A  bond  or  an  agreement  to  convey  may  be  treated  as  a  mort- 
gage and  foreclosed  in  the  same  manner.^ 

A  foreclosure  sale  is  subject  to  redemption  in  the  same  man- 
ner as  a  sale  under  general  execution.  The  owner  of  the  equity 
may  redeem  at  any  time  within  one  year  from  the  day  of  sale, 
and  in  the  mean  time  is  entitled  to  the  possession  of  the  property. 
For  the  first  six  months  his  right  to  redeem  is  exclusive  ;  but 
after  that  any  creditor  of  his  may  redeem  at  any  time  within 
nine  months  from  the  sale.  Creditors  may  redeem  from  each 
other  within  such  time.  The  terms  of  redemption  are  the  i-e- 
imbursement  of  the  amount  paid  by  the  person  who  then  holds 
under  the  sale,  together  with  the  amount  of  liis  own  lien,  with 
interest  at  the  rate  of  ten  per  cent,  per  annum,  together  with 
costs.  When  redemption  is  made  from  a  mortgagee  wliose  debt 
is  not  due,  he  must  rebate  interest  at  the  same  rate.  After  the 
expiration  of  nine  months,  creditors  can  no  longer  redeem  from 
each  other,  but  the  owner  of  the  equity  may  still  redeem  at  any 
time  before  the  end  of  the  year.  If  the  property  is  finally  held 
by  a  redeeming  creditor,  his  lien,  and  the  claim  out  of  which  it 
arose,  will  be  held  to  be  extinguished  unless  within  ten  days  after 
the  nine  months  limited  he  enters  on  the  sale  book  the  utmost 

1  Carleton  v.  Byington,  24  Iowa,  172.  also,  Blair  v.  Marsh,  8  Iowa,  144  ;  Page  v. 

2  Brown  v.  Kunz,  37  Iowa,  239.  Cole,  G  Iowa,  153;  Mullin  v.  Bloomer,  11 

3  Code,  §  3329.  But  the  vendor  may  Iowa, 360  ;  Guest  v.  Byington,  14  Iowa,  30; 
at  his  election  recover  the  purchase  money  Arms  v.  Stockton,  12  Iowa,  327;  Wall  v, 
at  law.     Hershey  v.  Ilershcy,  18  Iowa,  24  ;  Ambler,  11  Iowa,  274. 

Hartman  v.  Clarke,  11   Iowa,  511.     See, 

318 


FORECLOSURE   AND   REDEMPTION.        [§§  1336,  1337. 

amount  he  is  willing  to  credit  on  his  claim.  The  mode  of  mak- 
ing redemption  is  b}^  paying  the  money  into  the  clerk's  office  for 
the  use  of  the  persons  entitled  to  it.  At  the  end  of  the  year  the 
sheriff  makes  the  deed  to  the  person  entitled  to  it.  In  the  mean 
time  the  mortgagor  is  entitled  to  possession.^ 

1336.  Kansas.2 — Foreclosure  is  by  an  equitable  action  under 
the  Code.  The  action  is  a  local  one  and  must  be  brought  in  the 
county  in  which  the  land  is  situated.^  An  attachment  of  other 
property  may  be  made  in  the  foreclosure  suit  as  in  other  actions 
for  the  recovery  of  money,  upon  an  affidavit  setting  forth  sufficient 
grounds,  among  which  is  the  insufficiency  of  the  security.* 

In  actions  to  enforce  a  mortgage  deed  of  trust,  or  other  lien  or 
charge,  a  personal  judgment  is  rendered,  as  well  to  the  plaintiff 
as  other  parties  having  liens,  for  the  amount  due  with  interest, 
and  for  the  sale  of  the  property  and  application  of  the  proceeds.^ 
There  can  be  no  sale  of  the  real  estate  mortgaged,  except  in  pur- 
suance of  a  judgment  of  a  court  of  competent  jurisdiction  ordering 
such  sale.^  The  suit  is  always  for  the  debt,  whether  the  plaintiff 
asks  to  have  the  mortgaged  property  applied  in  payment  of  it  or 
not;  and  the  judgment  is  always  a  personal  judgment  for  the 
debt,  whetlier  an  order  is  obtained  to  have  the  property  sold  to 
satisfy  the  debt  or  not."  A  judgment  requiring  the  defendant  to 
pay  the  debt  and  costs  within  one  day  after  its  rendition,  and  re- 
quiring the  clerk  on  default  to  issue  a  special  execution  to  sell  the 
real  estate  to  satisfy  the  judgment,  is  not  erroneous  because  no 
more  time  is  allowed  him  to  pay  the  money  before  the  issuing  of 
the  special  execution.^ 

1337.  Kentucky.-' — Foreclosure  is  made  under  the   jurisdic- 
tion of  a  court  of  equity.     The  bill  may  be  brought  in  any  county 

1  Cofle,  1873,  §  3321  and  §§  .■5101-3129.     cuts  off   nil    ri-^ht.      Kirby  v.  Childs,  10 

2  Dii-ssk-r's    Slat.    187G,   c    80,    §§    40,      Kiins.  r>3<». 

399.  "!  Lichty  v.  McMiiitin,    11    Kans.    !SC>5 ; 

'  Shields  v.  Miller,  9  Kans.  397  ;  App  v.  Jenness  i-.  Cutler,  12  Ivans.  510  ;  Gillespie 

Bridge,  McCulion,  118.  v.  Lovell,  7  Kans.  423. 

*  Shedd  V.  McConnc-11,  18  Kans.  .594.  "  Blandin  i-.  Wade,  20  Kans.  251. 

*  Gen.    Stat.    1808,    p.    70.5;    Das.sler's  '•»  Civil  Code,  1876. 

Siat.  1876,  c.  80,  §  3029.     As  niortf,'ages  Tower  of  sale  mortgages  and  trust  deeds 

can  be  foreclosed  by  suit  only,  power  of  must  be  enforced  by  a  court  of  ciinity;  'mt 

sale  mortgages  and  trust  deeds  are  of  no  in   making  sale  the  court  will   lollow  the 

practical  advantage.  terms  of  iho  power.      Cami)beii  c.  John- 

*  There    is    no    redemption.      The  sale  ston,  4  Dana,  178. 

319 


§  1337.]  STATUTOHY    PUOVISIONS    RELATING    TO 

in  wliirh  anv  iKirt  of  the  mortgaged  land  lies.^  A  sale  of  the 
premises,  or  so  mucii  of  them  as  may  be  necessary,  must  in  all 
oases  be  deereed.-  Before  the  Code,  tlie  court  could  not  decree 
the  pavnient  of  any  balance  found  due  after  the  application  of 
the  proceeds  of  sale,  if  the  mortgagee  IkuI  a  legal  remedy  for  ob- 
taining this.^ 

Under  the  Code  foreclosure  of  a  mortgage  is  forbidden.^  In 
an  action  to  enforce  a  mortgage  or  lien,  judgment  may  be  ren- 
dered for  the  sale  of  the  propert}^  and  for  the  recovery  of  the 
debt  against  the  defendant  personally.^  A  sale  of  the  property 
may  be  ordered  without  giving  time  to  pay  money  or  do  other  act.^ 
Before  ordering  a  sale  of  real  property  for  the  payment  of  debt, 
the  court  must  be  satisfied  by  the  pleadings,  by  an  agreement  of 
the  parties,  by  affidavits  filed,  or  by  a  report  of  a  commissioner  or 
commissioners,  whether  or  not  the  property  can  be  divided  with- 
out materially  impairing  its  value  ;  and  may  cause  it  to  be  divided, 
with  suitable  avenues,  streets,  lanes,  or  alleys  ;  or  without  any  of 
them.  If  it  be  necessary  to  sell,  for  the  payment  of  debt,  a  par- 
cel of  real  property  which  cannot  be  divided  without  materially 
impairing  its  value,  the  officer  is  required  to  sell  the  whole  of  it, 
though  it  bring  more  than  the  sum  to  be  raised  ;  and  the  court 
shall  make  proper  orders  for  the  distribution  of  the  proceeds.  The 
plaintiff  in  an  action  to  enforce  a  lien  on  real  property  must  state 
in  his  petition  the  liens,  if  any,  which  are  held  thereon  by  others, 
and  make  the  holders  defendants ;  and  no  sale  of  the  property 
shall  be  ordered  by  the  court  prejudicial  to  the  rights  of  the 
holders  of  any  of  the  liens  ;  and  when  it  appears  from  the  peti- 
tion or  otherwise  that  several  debts  are  secured  by  one  lien,  or 
by  liens  of  equal  rank,  and  they  are  all  due  at  the  commence- 
ment of  the  action,  or  become  so  before  judgment,  the  court  shall 
order  the  sale  for  the  pro  rata  satisfaction  of  all  of  them  ;  but  if 
in  such  case  the  debts  be  owned  by  different  persons  and  be  not 
all  due,  the  court  shall  not  order  a  sale  of  the  property  until  they 
all  mature.     If  all   such   liens   be   held   by  the  same  party,  the 

1  Caufman  v.  Sayre,  2  B.  Mon.  207;  Martin  v.  Wade,  5  Mon.  78;  Morfran  v. 
Owings  V.  Be-all,  3  Litt.  103;  Shivclcy  v.  Wilkins,  6  J.  J.  Marsh.  28;  Crutclitield 
Jones,  6  B.  Mon.  274.  v.  Coke,  lb.  90 ;  Martin  v.  Wade,  5  Mon. 

2  Formerly,  under  the  general  jnrisdic-  79. 

tion    in   equity,  the  court  tnight   order  a         *  Civil  Code,  §  375. 
strict  foreclosure.     See  §  1547.  ^  Civil  Code,  §  376. 

3  Downing  v.  Palmateer,  1    Mon.  67 ;         ^  (jjvil  Code,  §  374. 

320 


FORECLOSURE   AND   REDEMPTION.  [§  1338. 

court  may  order  a  sale  of  enough  of  the  property  to  pay  the  debts 
then  due,  unless  it  appear  that  it  is  not  susceptible  of  advan- 
tageous division  ;  or  that,  for  some  other  reason,  tlie  sale  would 
cause  a  sacrifice  thereof,  or  seriously  prejudice  the  interests  of  the 
defendants.^  Every  sale  made  under  an  order  of  court  must  be 
public,  upon  reasonable  credits  to  be  fixed  by  the  court,  not  less, 
however,  than  six  months  for  real  property;  and  shall  be  made 
after  such  notice  of  the  time,  place,  and  terms  of  sale  as  the 
order  may  direct ;  and,  unless  the  order  direct  otherwise,  shall  be 
made  at  the  door  of  the  court-house  of  the  county  in  which  the 
property,  or  the  greater  part  thereof,  ma^y  be  situated  ;  and  the 
notice  of  such  sale  must  state  for  what  sum  of  money  it  is  to  be 
made.2  A  lien  exists  on  real  property  sold  under  an  order  of 
court,  as  security  for  the  purchase  money  ;  and,  upon  payment 
thereof,  the  clerk  releases  the  lien  on  the  margin  of  the  record  of 
the  deed  in  the  ofiice  of  the  clerk  of  the  county  court. ^ 

There  is  no  i-edemption  after  a  sale.  Formerly  the  practice 
was  to  render  in  the  first  place  a  decree  nisi  that  money  be  paid 
by  a  day  certain,  usually  some  day  in  the  succeeding  term  ;  and 
upon  failure  to  pay,  a  final  decree  foreclosing  absolutely,  or  direct- 
ing a  sale  of  the  property,  was  made.'* 

1338.  Louisiana.  —  The  civil  law  system  prevails  in  this  state, 
and  as  this  ditfers  so  Avidely  as  regards  the  law  of  mortgages  as 
well  as  in  other  respects  from. the  common  law  system  adopted  in 
the  other  states,  no  attempt  is  made  to  give  any  full  statement  of 
the  law  relating  to  mortgages  and  the  foreclosure  of  them.^  In 
general  it  may  be  said  that  a  mortgage  executed  according  to  the 
law  of  this  state  is  an  authentic  act  before  a  notary  public,  and 
imports  a  confession  of  judgment.  After  the  debt  is  due,  the 
mortgage  is  foreclosed  by  instituting  a  regular  suit  and  obtain- 
ing judgment  thereon  ;  or  upon  confession  of  judgment  the  court 
may  order  the  sheriff  to  proceed  at  once  to  seize  and  sell  the 
mortgaged    proj^erty.''     Tlie   hypothecary  action  by  which  mort- 

'  Civil  Code,  §  694.  Ann.  6.').     This  is  a  statutory  remedy,  but 

^  Civil  Code,  §  696.  docs  not  oust  the  cquitiiblc  jurisdiction  of 

'  Civil  Cotle,  §  699.  the  United  States  courts    to   enforce    the 

*  Downing;  r.  I'almHteiT,  1  Mon.  66;  mortgage.  Benjamin  u.  Cavsirac,  2  Woods, 
Martin    i;.   Wade,  5    Mon.  «0 ;  Hunks   v.     168. 

Greenwade,  5  J.  J.  Marsh.  2.')0.  o  Roguilic  v.  Faille,  1  La.  Ann.  U04  ;  and 

*  As  to  rights  of  Hccond  mortgagee  in     see  Story's  Eq.  §  1007. 
the  surplus,  sec  Querticr  v.  Hille,  18  La. 

VOL.   II.  21  321 


§§  1339,  1340.]       STATUTORY    PROVISIONS    KKLATING    TO 

gages  arc  forocloseil  is  a  real  acUou,  or  a  proceeding  in  rem, 
whereby  the  property  is  followed  wherever  it  may  be  found.  It 
may  be  instituted  before  a  court  of  ordinary  jurisdiction,  Tiiirty 
days'  notice  to  the  debtor  must  be  given  as  a  prerequisite  to  the 
bringing  of  the  action.^  If  the  property  does  not  sell  for  enough 
to  satisfy  the  mortgage,  the  mortgagee  becomes  an  ordinary  cred- 
itor for  the  balance.'^ 

1339.  Maine.  —  A  bill  in  equity  cannot  be  sustained  to  fore 
close  a  mortgage.     The  modes  provided  by  statute  must  be  pur 
sued.     These  are  by  entr}-^  and  possession,  by  advertisement,  and 
by  writ  of  en  try  .^ 

The  mortgagor  or  any  person  claiming  under  him  may  redeem 
at  any  time  within  three  years  after  the  mortgagee  has  obtained 
possession  by  entry,  or  by  action,  or  after  the  first  publication  of 
notice,  or  the  service  of  it,  as  provided  in  that  mode  of  foreclos- 
ure ;  but  when  the  mortgagor  and  mortgagee  have  in  the  mortgage 
agreed  upon  a  less  time,  but  not  less  than  one  year,  in  which  the 
mortgage  shall  be  foreclosed,  redemption  must  bo  had  accord- 
ingly.* Such  redemption  applies  to  each  and  all  the  modes  pre- 
scribed by  statute  for  the  foreclosure  of  mortgages  of  real  estate.^ 
After  payment  or  tender  of  the  amount  due  on  the  mortgage,  a 
bill  in  equity  may  be  maintained  for  redemption  and  to  compel 
the  mortgagee  to  release  his  right.  When  the  bill  is  founded  on 
a  tender  made  before  the  commencement  of  the  suit,  it  must  be 
commenced  within  one  year  after  the  tender.^ 

1340.  Maryland.''  —  Mortgages  are  foreclosed  by  suit  in  chan- 
cery, in  which  there  may  be  a  deci'ee  tliat  unless  the  debt  and 
costs  are  paid  by  the  time  fixed  by  the  deci'ee  there  shall  be  a 

1  Gentis  V.  Blasco,  15  La.  Ann.  104;  La.  Ann.  42.  As  to  the  disposition  of 
Taylor  y.  Pearce,  lb.  564.  the    surplus,   see    Quertier    v.    Hille,    18 

2  Salzman  r.  His  Creditors,  2  Rob.  (La.)  La.  Ann.  C5  ;  Lacoste  v.  West,  19  La. 
241.     In   order  to  make  a  valid   sale  of  Ann.  446. 

land  under  a  foreclosure  of  a  mortgage,  ^  Ireland  v.  Abbott,  24  Me.  155;  Shaw 

it   is   indispensably  necessary  that   in  all  v.  Gray,  23  Me.  174  ;  Chase  v.  Palmer,  25 

parishes,  except    Jefferson    and   Orleans,  Me.  341.     See  §§  1238-9,  1277. 

there  should  be  an  actual  seizure  of   the  <  R.  S.  1857,  c.  90,  §  6  j  Act  1872,  c.  37. 

land;  not  perhaps  an  actual  turning  out  '  Laws,  1876,  c.  113. 

of  the  party  in  possession,  but  some  taking  ^  For  proceedings  to  redeem,  see  Rev. 

possession  of  it  by  the  sheriff  not  merely  Stat.    1857,   c.  90,  §§    13-20;    and  Act, 

constructively.     Watson  v.  Bondurant,  21  1872,  c.  41  ;  Acts,  1874,  c.  243. 

"Wall.  123.     As  to  where  the  sale  should  ^  Code,  1860,  p.  98,  art.  16,  §  125. 

take  place,  see  Walker  v.  Villavaso,  26 

322 


FORECLOSURE    AND    REDEMPTION.  [§   1341. 

sale  of  the  property,  or  of  so  much  of  it  as  may  be  necessary.^ 
This,  however,  is  merely  a  cumulative  remedy,  and  does  not  do 
away  with  a  strict  foreclosure.  The  heirs  of  the  mortgagee  need 
not  be  made  parties  to  the  bill,  but  any  decree  upon  a  bill  filed 
by  the  executor  or  administrator  of  the  mortgagee  has  the  same 
effect  as  if  his  heirs  were  parties  to  it.^  When  a  sale  is  made, 
no  credit  is  given  except  with  the  consent  of  the  complainant. 
The  sale  is  made  in  the  county  or  city  where  the  premises  are 
situated  ;  but  if  situated  in  more  than  one  county,  the  sale  may 
be  made  in  either.^  If  the  property  sells  for  less  than  the  amount 
of  the  debt,  no  decree  can  be  made  for  the  balance  of  the  debt, 
but  an  action  at  law  may  be  had  to  recover  such  balance.^  There 
is  no  redemption. 

If  the  mortgage  is  payable  by  instalments,  a  sale  will  be  de- 
creed of  so  much  of  the  property  as  will  pay  the  amount  due,  and 
the  decree  will  stand  as  security  for  other  instalments  as  they 
fall  due  ;  and  if  it  cannot  be  sold  in  parcels,  the  court  may  order 
it  sold  entire,  and  the  whole  debt  paid,  with  a  rebate  of  interest 
for  sums  not  due.^ 

1341.  Massachusetts.  —  Foreclosure  in  equity  is  very  rare,  al- 
though jurisdiction  of  the  subject  is  given  by  statute  in  cases 
where  there  is  not  a  plain,  adequate,  and  complete  remedy  at 
common  law.^  Mortgages  are  generally  foreclosed  by  entry  and 
possession,  or  by  writ  of  entry,  or  under  powers  of  sale  contained 
in  the  mortgages. 

Redemption  '  may  be  had  at  any  time  within  three  years  after 
the  mortgagee  has  obtained  jjossession  for  the  purpose  of  fore- 
closure. If  a  tender  be  made  of  the  whole  sum  due  on  the  mort- 
gage within  the  three  years  limited  for  redemption,  and  it  be  not 
accepted,  a  suit  in  equity  for  redemption  may  be  brought  within 
one  year  after  the  tender  is  ina<le.  If  in  such  suit  the  |)laintill: 
alleges  a  tender,  he  must  when  he  commences  his  suit  pay  the  sum 

•  This  provision,  that  the  court  may  de-  *  Code,  1860,  p.  447. 

cree  a  sale  uiili-MS  thcdibt  bcpuid  h_v  a  day  *  Itij;  v.  Cromwell,  4  Md.  .'(1;    Kiiliel- 

fixed  in  the  decree,  may  he  waived  by  the  ber{,'err.  Harrison,  3  Md.  Ch.  39  ;  Andrews 

mortK«Kor  in  hifl  answer,  or  by  previous  v.  Scotton,  2  Bland,  067. 

assent  in  the  mortna^'e  itself;  as  by  a  slip-  '  Peyton  v.  Ayres,  2  Md.  Ch.  64. 

ulation  that  upon   any  default   the  mort-  *  G.  .S.  1860,  c.  113,  §  2  ;  Shaw  v.  Nor- 

gajjec  "may  forthwith  forecloHC  this  mort-  folk  Co.  U.  H.  Co.  5  Gray,  162  ;  Lowell 

ga^c  and   sell   the  property."     Dorucy  v.  v.  Daniels,  2  Cusb.  234. 

Dorsey,  30  Md.  522.  ^  Gen.  Stat.  c.  140,  §§  13-35. 

'  Code,  1800,  p.  94. 

323 


§  134-.]  STATUTOKY    THOVISIONS    KKLATING    TO 

tlins  toiuloircl  to  the  clerk  of  the  court  for  the  iiso  of  tlio  party 
entitloil  thereto.  But  he  may,  at  any  time  within  the  tliree  years, 
and  either  before  or  after  entry  for  breach  of  the  condition,  bring 
a  suit  for  redemption  without  a  previous  tender,  and  muy  therein 
offer  to  perform  the  eontlition  of  the  mortgage.  If  suit  is  brought 
without  a  previous  tender,  and  it  appears  that  anything  is  due  on 
the  mortgage,  the  phiintilT;  must  pay  the  costs,  unless  the  mort- 
gagee lias  unreasonably  refused  or  neglected  when  requested  to 
render  a  just  and  true  account  of  the  money  due  on  the  mortgage, 
and  of  the  rents  and  profits  and  sums  paid  for  taxes,  repairs,  and 
improvements  ;  or  unless  he  has  prevented  the  plaintiff  from  per- 
forming or  tendering  performance  of  the  condition.  If  the  tender 
be  insufficient,  the  plaintiff  is  nevertheless  entitled  to  redemption 
if  the  suit  has  been  commenced  within  the  three  years.  If  too 
much  be  tendered,  the  surplus  is  restored  to  the  plaintiff.  If  it 
appears  that  the  mortgagee  has  received  from  the  rents  and  profits 
or  otherwise  more  than  is  due  on  the  mortgage,  judgment  and 
execution  ai"e  awarded  against  him  for  the  sum  due  the  plaintiff. 

1342.  Michigan.^ —  Bills  for  foreclosure  are  filed  in  the  circuit 
court  in  cliancery  of  the  county  where  the  premises,  or  any  part 
of  them,  are  situated.  The  court  has  power  to  decree  a  sale  of  the 
mortgaged  premises,  or  such  part  of  them  as  may  be  sufficient  to 
discharge  the  amount  due  on  the  mortgage,  and  the  costs  of  suit ; 
but  no  lands  are  to  be  sold  within  one  year  after  the  filing  of  the 
bill  of  foreclosure.^  The  court  may  compel  the  delivery  of  the 
possession  of  the  premises  to  the  purchaser,  and  on  the  coming  in 
of  the  report  of  sale  may  decree  the  j)ayment  by  the  mortgagor-of 
any  balance  of  the  mortgage  debt  that  may  remain  unsatisfied  after 
a  sale  of  the  premises,  in  the  cases  in  which  such  balance  is  recov- 
erable at  law ;  and  for  that  purpose  may  issue  the  necessary  exe- 
cutions as  in  other  cases  against  other  property  of  the  mortgagor. 

No  proceedings  at  law  for  the  recovery  of  the  debt  can  be  had 
while  the  bill  is  pending,  unless  authorized  by  the  court.  If  the 
debt  be  secured  by  the  obligation  or  other  evidence  of  debt  of  any 
person  besides  the  mortgagor,  the  complainant    may  make  such 

1  Compiled  Laws,  1871,  pp.  1549-1552.  has  been  filed,  even  though  it  has  been  on 

"^  The  piirjjose  of  this  provision  being  file  for  six  months  previous.     The  court 

to  give  the  mortgagor  time  to  make  pay-  may  postpone  the  sale  until  the  expiration 

ment  and  save  the  lands,  that  purpose  is  of  a  year  from  service  of  the  subpoena.    De- 

not  served  by  allowing  a  sale  within  six  troit  F.  &  M.  Ins.  Co.  v.  Kenz,  33  Mich, 

months  after  he  first  has  notice  that  a  bill  238. 

324 


FORECLOSURE   AND    REDEMPTION.  [§  1342. 

person  a  party  to  the  bill,  and  the  court  may  decree  payment  of 
the  balance  of  the  debt  unsatisfied  after  a  sale  of  the  premises,  as 
well  against  such  other  person  as  against  the  mortgagor.  Upon 
the  filing  of  the  bill,  the  complainant  must  state  in  it  whether 
any  proceedings  have  been  had  at  law  for  the  recovery  of  the 
debt,  or  any  part  of  it,  and  whether  any  part  of  it  has  been  paid. 
If  any  judgment  has  been  obtained  at  law,  no  proceedings  can  be 
had,  unless  return  is  made  that  the  execution  is  unsatisfied  in 
whole  or  in  part,  and  that  the  defendant  has  no  property  whereof 
to  satisfy  the  execution  except  the  mortgaged  premises.^ 

All  sales  are  made  by  a  circuit  court  commissioner  of  the 
county  in  which  the  decree  was  rendered,  or  the  land  or  some 
part  of  it  is  situated,  or  by  some  other  person  authorized  by  the 
order  of  the  court.  The  sales  are  at  public  vendue  between  the 
hour  of  nine  o'clock  in  the  morning  and  the  setting  of  the  sun, 
at  the  court-house  or  place  of  holding  the  circuit  court  in  the 
county  in  which  the  estate  or  some  part  of  it  is  situated,  or  at 
such  other  place  as  the  court  may  direct.  Deeds  ai-e  executed  by 
the  commissioner,  or  other  person  making  the  sale,  specifying  the 
names  of  the  parties  to  the  suit,  the  date  of  the  mortgage,  when 
and  where  recorded,  with  a  description  of  the  premises  sold,  and 
the  amount  bid  for  the  same,  which  vest  in  the  purchaser  the 
same  estate  that  would  have  vested  in  the  mortgagee  if  the  equity 
of  redemption  had  been  foreclosed,  and  no  other  or  greater ;  and 
the  deeds  are  as  valid  as  if  executed  by  the  mortgagor  and  mort- 
gagee, and  are  an  entire  bar  against  each  of  them,  and  against  all 
parties  to  the  suit  in  which  the  decree  was  made,  and  against 
their  heirs  and  all  persons  claiming  under  them. 

The  proceeds  of  a  sale  under  the  decree  are  applied  to  the  dis- 
charge of  the  debt  adjudged  by  the  court  to  be  due,  and  of  the 
coftts  awarded  ;  any  surplus  there  may  be  is  brought  into  court 
for  the  use  of  the  defendant,  or  of  the  person  entitled  to  it,  sub- 
ject to  the  order  of  the  court.  If  this  remains  for  three  months 
without  being  ap})li('d  for,  the  court  may  direct  it  to  be  put  out  at 
interest,  under  the  direction  of  the  court,  for  the  bcincfit  of  the 
defendant.      Wlien;  a  portion  of  tlie   mortgage  debt  is  not  duo  at 

'  A   J)ill    cnnnot   be  mnintnincd  which  hnil  hvcn  issued  ami  rftiirnci!  unsntisfied 

■hows  thiit  n  jii(lj;tm-nt  Juis  been  recovered  in  whole  or  in  part,  and  did  not  wiiivc  a 

on  one  of  the  notes,  and  that  it  was  nearly  decree  ns  to  that  note.    Dennis  v.  Heiniiig- 

jmid,  but  did  not  show  that  an  execution  wav,  Walker's  Ch.  387. 

325 


§  l;Ur>.]  STATUTORY    IMtOVISIONS    RKLATING    TO 

the  tinio  of  tlio  filiiiijj  of  the  bill,  it  is  disinissod  upon  the  defend- 
ant's brinjTjinc;  into  court,  at  any  time  before  the  decree  of  sale,  the 
principal  and  interest  due,  with  costs. ^  If  he  bring  this  in  after  a 
decree  of  sale  has  been  entered  the  proceedings  are  stayed  ;  but 
the  court  enters  a  decree  of  foreclosure  and  sale,  to  be  enforced  by 
a  further  order  of  court  upon  a  subsequent  default.^ 

The  court  may  direct  a  reference  to  a  master,  to  ascertain  and 
report  the  situation  of  the  premises,  or  may  determine  the  same 
on  oral  or  other  testimony  ;  and  if  it  appear  that  they  can  be  sold 
in  parcels  without  injury,  the  decree  directs  so  much  of  the  prem- 
ises to  be  sold  as  will  be  sufficient  to  pay  the  amount  then  due  on 
the  mortgage,  with  costs  ;  and  such  decree  remains  as  security  for 
any  subsequent  default.  If  there  be  any  default  subsequent  to 
the  decree,  the  court  may,  upon  the  petition  of  the  complainant, 
by  further  order  direct  a  sale  of  so  much  of  the  premises  as  will 
be  sufficient  to  satisfy  the  amount  due,  with  the  costs  of  the  peti- 
tion ;  and  such  proceedings  may  be  had  as  often  as  a  default  may 
happen.  If  it  appear  that  a  sale  of  the  whole  of  the  premises 
will  be  more  beneficial  to  the  parties,  the  decree  in  the  first  in- 
stance is  entered  for  the  sale  of  the  whole.  Upon  a  sale  of  the 
whole,  the  proceeds  are  applied  as  well  to  the  portion  of  the  debt 
due  as  towards  that  not  due,  with  a  rebate  of  legal  interest  in  case 
the  residue  do  not  bear  interest ;  or  the  court  may  direct  the  bal- 
ance of  the  proceeds  of  such  sale,  after  the  payment  of  the  portion 
due,  to  be  put  out  at  interest  for  the  benefit  of  the  complainant,  to 
be  paid  him  as  the  instalments  may  become  due,  and  the  surplus  for 
the  benefit  of  the  defendant,  to  be  paid  on  the  order  of  the  court. 

1343.  Minnesota.3  —  Actions  for  the  foreclosure  of  mortgages 
are  governed  by  the  rules  and  provisions  of  statute  applicable  to 
civil  actions.  Service  by  publication  for  six  weeks,  as  in  the  case 
of  a  sale  under  power,  may  be  made  upon  all  parties  to  the  action 
against  whom  no  personal  judgment  is  sought,  and  such  judgment 
may  be  taken  at  the  expiration  of  twenty  days  after  the  comple- 
tion of  publication.  Such  judgment  is  entered  for  the  amount 
due  with  costs,  and  directs  the  sheriff  to  proceed  to  sell  the  same 

1  Brown  v.  Thompson,  29  Mich.  72.  in   the  same  manner  as  in   the   oiifjinal 

2  The  proceedings  for  a  further  decree  suit.  No  decree  can  be  entered  without 
are  essentially  a  new  suit  in  all  respects  proof,  as  in  other  cases.  Brown  v.  Thomp- 
except  form  ;  and  notice  must  be  given  to  son,  29  Mich.  72. 

all  persons  whose  interests  will  be  affected         ^  Slat,  at  Large,  1873,  p.  905. 

326 


FORECLOSURE   AND    REDEMPTION.       [§§  1344,  1345. 

as  on  execution  and  make  report  to  the  court.  Upon  the  coming 
in  of  the  report  the  court  may  confirm  the  sale,  and  the  clerk 
shall  then  enter  satisfaction  of  the  judgment  to  the  extent  of  the 
sum  bid,  less  expenses  and  costs,  and  execution  may  issue  for  the 
balance.  Redemption  may  be  made  as  in  case  of  sales  under  a 
power  ;  that  is  for  one  year.^  After  the  expiration  of  the  time 
allowed  for  redemption,  a  final  decree  is  entered  that  the  title  is 
in  the  purchaser  free  of  all  redemption,  and  this  decree  being 
recorded  passes  the  title  to  the  property  as  against  the  parties. 
Any  surplus  is  subject  to  the  order  of  the  court  for  the  benefit  of 
the  person  entitled  to  it.  When  the  action  of  foreclosure  is  for 
an  instalment  due,  it  may  be  dismissed  on  payment  before  judg- 
ment of  the  amount  due  ;  or  after  judgment,  proceedings  may  be 
stayed,  to  be  enforced  by  further  order  upon  subsequent  default. 

A  strict  foreclosure  may  be  decreed  in  cases  where  such  remedy 
is  just  or  appropriate  ;  but  in  such  case  no  final  decree  can  be 
rendered  until  the  lapse  of  one  year  after  the  judgment  determin- 
ing the  amount  due  on  the  mortgage.^ 

1344.  Mississippi.^  —  Foreclosure  is  under  the  jurisdiction  of 
courts  of  equity.  Reference  is  made  to  the  clerk  of  court  or  to  a 
master,  to  compute  and  report  the  amount  due  on  the  mortgage.* 
The  bill  may  be  maintained  for  an  instalment  of  the  mortgage 
debt  before  the  balance  of  it  becomes  due  ;  but  the  whole  debt 
may  be  included  in  the  decree  if  it  becomes  due  before  the  final 
hearing.^  The  decree  may  direct  the  sale  of  all  the  mortgaged 
property,  or  of  so  much  of  it  as  may  be  necessary  to  pay  the  debt 
and  costs.     There  is  no  redemption  after  sale. 

1345.  Missouri.^  —  Foreclosure  is   by  petition  in   the  circuit 

1  See  §  1743  for  provisions  respecting  governed  by  the  rules  of  proceedings  at 
certificate  of  sale  and  mode  of  redemption,  law  and  not  by  those  in  equity.  Thayer 
See,  also,  Laws,  1876,  c.  .38.  v.  Campbell,  9  Mo.  277.     These  statutory 

2  Laws,  1870,  c.  58;  Wilder «.  Haughey,  provisions  are  very  similar  to  those  of 
21  Minn.  101,  per  Berry,.!.:  "The  cases  other  states  which  are  there  enforced  in 
arc  very  rare  in  which  a  strict  foreclosure  equity. 

should  be  adjudged."  Tlie  courts  in  this  state  have  sometimes 

»  R.  C.  1871,  §  974.  found  it  a  matter  of  uncertainty  wlicthcr 

♦  U.  C.  1857,  p.  .')47,  art.  48  ;  Bcville  v.  a  foreclosure  suit  in  a  jiarticulur  instance 
Mcintosh,  41   Miss.  ."ilG.  is  under  the  statute,  or  under  tlie  jurisdic- 

'  Magruder  v.  Egglcston,  41    Miss.  284.  lion  of  a  court  of  ecpiity,  it  being  tlie  gcn- 

Sec  provisions  as  tosales,  §§840-854,  Kev.  eral  opinion  that  notwitiislanding  the  stat- 

Code,  1871.  utory    remedy,    a   party  may    pursue    his 

•  Wagner's  Stat.  1872,  pp.  95.3-957.  rights  in  a  court  of  chancery.     Although 
This  is  a  statutory  proceeding,  and  is  a  petition  was  addiesscd  to  the  judge  "  in 

327 


§i;u.-..] 


STATUTORY    I'KOVISIONS    KKLATING    TO 


court  against  the  ini>rt<j;a<^<)r  ami  tlio  actual  tenants  or  occupiers  of 
till'  real  estate,  setting  forth  the  sultstanee  of  tlu;  mortgage  deed, 
ami  praying  that  judgment  may  be  rendered  for  the  debt  or  dam- 
ages, and  that  the  equity  of  redemption  may  be  foreclosed,  and 
the  property  sold  to  satisfy  the  amount  due.  The  petition  may 
be  filed  in  any  county  where  any  part  of  the  mortgaged  premises 
is  situated.  In  case  of  the  death  of  the  mortgagee  or  his  assignee, 
or  of  the  mortgagor,  either  before  or  after  the  action  is  brought, 
the  personal  representatives  of  the  deceased  must  be  made  a  party 
to  the  suit ;  and  when  the  personal  representative  of  the  mort- 
gagor is  made  a  party  to  the  suit,  and  the  property  is  insufficient 
to  satisfy  the  debt  and  costs,  as  to  the  residue  the  judgment  has 
the  effect  of  a  judgment  against  the  executor  or  administrator  as 
such.^  Any  person  claiming  an  interest  in  the  mortgaged  prop- 
erty may,  on  motion,  be  made  defendant  in  such  proceedings.^ 
When  the  mortgagor  is  not  summoned,  but  notified  by  publica- 
tion, and  has  not  appeared,  the  judgment  against  him  is  for  the 
debt  and  damages,  or  damages  found  to  be  due,  and  costs,  to  be 
levied  of  the  mortgaged  propert3^  described  as  in  the  mortgage. 


chancery  sitting,"  and  contained  language 
peculiar  to  bills  in  equity,  yet  the  mode  of 
proceeding  having  been  that  prescribed  by 
the  statute,  it  was  regarded  as  a  statutory 
proceeding.  The  chief  distinction  between 
the  two  modes  is  this,  that  in  equity  there 
can  be  no  judgment  for  a  deficiency,  while 
this  is  provided  for  by  the  statute.  Riley 
V.  McCord,  24  Mo.  265  ;  Fithian  v.  Monks, 
43  Mo.  502. 

A  judfrment  for  the  residue  of  the  debt 
not  satisfied  by  the  mortgage  can  be  ren- 
dered only  against  the  mortgagor  or  his 
personal  representative ;  and  cannot  he 
rendered  against  a  purchaser  who  has  as- 
sumed the  payment  of  the  mortgage  as 
a  j>art  of  the  consideration  of  purchase. 
This  proceeding  being  purely  statutory 
cannot  be  extended  beyond  the  express 
provisions  of  the  statute.  Fithian  v. 
Monks,  43  Mo.  502. 

In  some  cases  a  foreclosure  may  be  had 
in  equity  when  no  remedy  can  be  had  un- 
der the  statute,  as  in  case  of  a  deed  made 
by  mistake  to  the  grantor  himself,  to  be 
void  upon  the  payment  of  a  debt  by  him  ; 

328 


it  cannot  be  treated  as  a  mortgage  in  a 
court  of  law,  but  in  equity  may  be  re- 
formed and  foreclosed  upon  the  same  bill. 
Rackliffe  v.  Seal,  36  Mo.  317.  And  so  also 
on  a  bill  in  equity  to  redeem,  the  decree 
may  be  that  on  failure  to  redeem  within 
the  time  limited  the  property  shall  be  sold, 
this  being  in  such  case  a  foreclosure  in 
equity.     Davis  v.  Holmes,  55  Mo.  349. 

The  more  common  form  of  security  in 
this  state  is  a  trust  deed  or  a  power  of  sale 
mt)rtgage.  These  may  be  foreclosed  un- 
der the  statute,  as  well  as  under  the  pow- 
ers in  these  instruments. 

1  Perkins  v.  Woods,  27  Mo.  547.  His 
heirs  are  not  necessary  parties. 

2  They  are  allowed  to  become  parties  so 
that  they  may  protect  their  own  interests, 
not  the  interests  of  others.  Wall  v.  Nay, 
30  Mo.  494.  One  of  several  mortgagees 
may  proceed  to  foreclose  without  making 
the  other  mortgagees  parties  to  the  pe- 
tition. He  has  no  right  to  join  them,  but 
they  may  come  in  voluntarily.  Thayer  v. 
Campbell,  9  Mo.  277. 


FORECLOSURE   AND   REDEMPTION.  [§  1346. 

When  he  has  been  duly  summoned,  or  appears  in  the  suit,  the 
judgment  further  provides  that  if  the  mortgaged  property  be  not 
sufficient  to  satisfy  the  debt  and  damages,  or  damages  and  costs, 
then  the  residue  shall  be  levied  of  other  goods,  chattels,  lands,  and 
tenements  of  the  mortgagor. 

The  execution  is  a  special  fieri  facias^  and  is  served  and  re- 
turned as  executions  in  ordinary  civil  suits.  The  purchaser  at  a 
foreclosure  sale  takes  a  title  against  the  parties  to  the  suit,  but  he 
cannot  set  it  up  against  the  subsisting  equities  of  those  who  are 
not  parties. 

If  redemption  be  made  before  sale,  the  officer  makes  a  certifi- 
cate which  is  acknowledged  and  recorded  in  the  office  where  the 
mortgage  is  recorded,  and  has  the  same  effect  as  satisfaction  en- 
tered on  the  margin.     There  is  no  redemption  after  sale.^ 

1346.  Montana  Territory.^  —  An  action  for  the  foreclosure  of 
a  mortgage  of  real  property  must  be  tried  in  the  county  in  which 
the  subject  of  the  action  or  some  part  of  it  lies.  There  is  but 
one  action  for  the  recovery  of  any .  debt,  or  the  enforcement  of 
any  rights  secured  by  mortgage  upon  real  estate.  In  actions  for 
the  foreclosure  of  mortgages  the  court  has  the  power  by  its  judg- 
ment to  direct  a  sale  of  the  incumbered  property,  or  as  much  as 
may  be  necessary,  and  the  application  of  the  proceeds  of  the  sale 
to  the  payment  of  the  costs  of  the  court,  and  expenses  of  the  sale, 
and  the  amount  due  the  plaintiff;  and  if  it  appear  from  the 
sheriff's  return  that  the  proceeds  are  insufficient,  and  a  balance 
still  remains  due,  judgment  is  docketed  for  such  balance  against 
the  defendant  personally  liable  for  the  debt,  and  thus  becomes  a 
lien  on  the  real  estate  of  such  judgment  debtor.  Any  ]iarty  not 
appearing  on  record  need  not  be  made  a  party  to  the  suit.  If 
there  ])e  a  surplus,  it  is  i)aid  to  the  person  entitled  to  it,  and  in 
the  mean  time  it  is  to  be  deposited  in  court.  If  the  debt  be 
not  all  due,  sufficient  of  the  property  is  sold  to  satisfy  the  amount 
due,  interest,  and  costs,  and  the  court  may  on  motion  order  a 
further  sale.  But  if  the  property  cannot  be  sold  in  portions  with- 
out injury,  the  whole  may  be  sold,  and  the  entire  debt  with  in- 
terest and  costs  paid,  there  being  a  proper  rebate  of  interest  when 
the  part  not  due  does  not  bear  interest. 

»  Sec  WnKiicr's  Statutes,  1872,  pp.  609,         «  Codified   Stat.  1872,  p.  92;  Code  of 
f.U,  §§  42-f..'i,  for  provisions  as  to  sales.     Civ.  Proced.  1877,  §§  50,  .•J4G-.'J48. 
Except  as  in  §  1745. 

329 


§  1847.]  STATUTORY    PROVISIONS    RKLATING    TO 

1347.  Nebraska.^  —  On  })otition  for  foreclosure  the  court  in 
cluinoerv  may  tlecroe  that  the  premises  be  sold,  and  upon  the  cora- 
in!2:  '"  ^^f  the  report  of  sale,  that  the  mortgagor  pay  any  balance  of 
the  debt  that  may  remain  after  the  sale,  and  execution  may  issue 
against  other  property  of  the  mortgagor.  Other  persons  liable  for 
the  mortgage  debt  may  be  made  parties,  and  the  court  may  render 
judgment  against  them  for  any  balance  of  the  debt  remaining  un- 
satisfied. After  the  filing  of  the  petition  no  proceedings  at  law 
for  the  reeovery  of  the  debt  shall  be  had  unless  authorized  by  the 
court.  If  there  has  already  been  a  suit  at  law,  there  must  be  a 
return  by  the  proper  officer  that  the  defendant  has  no  property 
whereof  to  satisfy  such  execution  except  the  mortgaged  prem- 
ises .^ 

A  sale  under  a  decree  in  chancery  must  be  made  by  a  sheriff, 
or  some  other  person  authorized  by  the  court  in  the  county  where 
the  premises  or  some  part  of  them  ai'e  situated.  A  sheriff  mak- 
ing the  sale  acts  in  his  official  capacity  and  is  liable  on  his  bonds 
for  his  acts.  The  deed  executed  in  pursuance  of  the  sale  is  an 
entire  bar  against  both  the  mortgagor  and  mortgagee,  and  all 
parties  to  the  suit  and  their  heirs.  Any  surplus  is  subject  to  the 
order  of  court  for  three  months. 

When  a  petition  is  filed  for  the  payment  of  interest,  or  any  in- 
stalment of  the  principal  before  the  whole  is  due,  the  petition  is 
dismissed  upon  the  defendant's  bringing  into  court  the  amount 
due  and  costs,  at  any  time  before  decree  of  sale ;  and  after  such 
decree,  upon  payment  of  the  amount  due,  the  proceedings  are 
stayed  ;  but  may  be  enforced  by  further  order  upon  any  subse- 
quent default  occurring.  If  in  such  case  payment  is  not  made, 
the  court  directs  the  sale  of  so  much  of  the  mortgaged  premises 
as  will  be  sufficient  to  pay  the  amount  then  due,  and  the  decree 
remains  a  security  for  any  subsequent  default,  when  a  further  sale 

1  G.  S.  1873,  pp.  655-658.     Laws,  1875,  mortgages,  the  amount  due  on  each,  and 

p.  42.  the  priority  of  liens,  and  renders  a  decree 

The  proceedings  are  governed  by  the  of  foreclosure  and  hale,  the  proceeds  of  the 
statute.  All  persons  having  an  interest  sale  to  be  applied  in  the  order  of  such  pri- 
in  the  premises  not  adverse  to  the  mort-  ority.  Tootle  v.  White,  4  Neb.  401. 
gagor  are  necessary  parties  to  the  suit,  in  ^  fhe  petition  must  show  whether  there 
order  that  a  perfect  title  may  pass  by  a  has  been  a  suit  at  law  and  whether  any 
sale  under  the  decree.  On  the  hearing  the  part  of  the  debt  has  been  collected.  Sim- 
court  finds  the  amount  due  on  the  note  mons  Hardware  Co.  v.  Brokaw,  7  Neb. 
and  mortgage,  or  in  case  of  two  or  more  405. 

330 


FORECLOSURE   AND   REDEMPTION.  [§  1348. 

may  be  ordered.  If  a  sale  of  the  whole  of  the  mortgaged  prem- 
ises will  be  most  beneficial  to  the  parties,  the  decree  directs  the 
sale  of  the  whole  in  the  first  instance  ;  and  in  this  ease  the  pro- 
ceeds are  applied  to  the  payment  of  the  whole  mortgage  debt, 
with  a  proper  rebate  of  interest  if  the  balance  not  dne  does  not 
bear  interest.  The  decree  operates  directly  upon  the  mortgaged 
property  ;  no  order  of  sale  need  be  issued.^  There  is  no  redemp- 
tion after  sale. 

1348.  Nevada.2  —  Qnly  one  action  can  be  had  for  the  recovery 
of  the  debt  or  enforcement  of  the  mortgage.^  In  such  action 
judgment  is  rendered  for  the  amount  found  due,  and  for  a  sale  of 
the  property,  and  application  of  the  proceeds  to  payment  of  the 
3ebt ;  execution  may  issue  for  any  balance  there  may  appear  to 
be  due  by  the  sheriff's  return.  Any  surplus  the  court  may  cause 
to  be  paid  to  the  persons  entitled  to  it,  and  in  the  mean  time 
may  direct  it  to  be  deposited  in  court.  If  the  debt  be  not  all  due 
only  so  much  of  the  property  as  is  necessary  to  satisfy  the  amount 
due  shall  be  sold  ;  but  if  it  cannot  be  sold  in  portions  without 
injury,  the  whole  may  be  ordered  to  be  sold  in  the  first  instance, 
and  the  entire  debt  paid  with  a  proper  rebate  of  interest. 

A  certificate  of  the  sale  is  made  by  the  sheriff,  and  after  the 
time  allowed  for  redemption  has  expired,  a  deed  is  executed. 
The  debtor,  or  his  successor  in  interest,  may  redeem  within  six 
months,  on  paying  the  amount  of  the  bid  in  the  money  or  cur- 
rency specified  in  the  judgment,  with  eighteen  per  cent,  thereon 
in  addition,  with  any  amount  paid  for  taxes  ;  and  also,  if  the  pur- 
chaser be  a  creditor  having  a  lien  prior  to  that  of  a  redemptioner 
other  than  the  judgment  under  which  the  purchase  was  made,  the 
amount  of  such  lien,  with  interest.  There  may  be  successive  re- 
demptions by  judgment  or  mortgage  creditors  within  sixty  days 
after  the  last  redemption.* 

Tbe  statute  in  this  state  entirely  changes  the  common  law 
rule  that  the  mortgagee  may  pursue  all  his  remedies  siiiinltiiiio- 
ously,  by  action  upon  the  d(^bt,  by  bill  to  foreclose,  and  ejectment. 
Here  ejectment  is  wholly  forbidden.  No  action  of  debt  can  be 
resorted  to  unless  the  mortgage  lien  be  abandoned.     The  remedy 

>  Rector  V.  Uotton,  .T  Neli.  171.  would   not  prevent  n  snle  under  a   power. 

2  Compiled   LftwH,  1873,  vol.  I,  j).  :ir,7,  Hryimt  v.  Carson  Uiver  Luuilxriiif,'  Co.  3 

§§1309-1311.  Ncv.  313. 

8  It   would    Hcem    tliat    tliiH    jirovision  *  Compiled  Laws,  1873,  §§  1292-1295. 

331 


§§  1849,  1  ;>")().]       SIATUTOUY    TKOVISIONS    RKI.ATINCl    TO 

:»i:::unst  tlio  i>ro|)"rly  is  conruuHl  to  fonn-lostii-o  and  sale.^  A  judg- 
nuMit  for  tlu-  (li'lit  caiuiot  W'.  enforced  until  the  remedy  against 
tlie  property  is  exhausted.  The  plaintilT  may  if  he  choose  take 
simply  a  decree  in  equity,  without  a  common  law  judgment,  and 
then  if  tlie  property  falls  short  of  paying  the  entire  debt  he  may 
afterwards  have  execution  for  the  bahuice.  If  a  common  law 
judgment  be  taken  in  the  first  instance,  it  constitutes  no  lien  upon 
other  property  until  a  deficiency  is  duly  ascertained  and  docketed.^ 
Equity  has  jurisdiction  of  a  bill  to  foreclose,  although  the  debt 
has  been  presented  and  allowed  against  the  estate  of  the  deceased 
mortgagor.^ 

1349.  New  Hampshire.  —  Foreclosure  may  be  had  by  bill  in 
equity  when  the  complicated  relations  of  the  parties  render  pro- 
ceedings at  law  inadequate.*  The  modes  of  foreclosure  in  com- 
mon use  are  by  entry  under  process  of  law  ;  by  peaceable  entry 
and  publication  of  notice  of  the  same  ;  or  by  advertisement  when 
the  mortgagee  is  already  in  possession.  In  either  case  actual 
peaceable  possession  continued  for  one  year  from  the  time  of 
entry,  or  from  the  day  specified  in  the  notice  in  the  latter  mode, 
forever  bars  the  right  of  redemption.^ 

1350.  New  Jersey. — Foreclosure  is  under  the  general  jurisdic- 
tion of  the  courts  of  chancery  ;  but  where  all  the  premises  are  sit- 
uate in  the  same  county,  the  circuit  court  of  the  county  has  the 
same  jurisdiction  and  power  as  the  court  of  chancery.^  The  court 
may  decree  a  sale  of  the  mortgaged  premises,  or  of  such  part  of 
them  as  shall  be  sufficient  to  discharge  the  debt  and  costs  ;  which 
sale  shall  be  made  either  by  one  of  the  masters  of  the  court  or  by 
the  sheriir  of  tlie  county  where  the  premises  are  situated  by  virtue 
of  a  writ  of  fieri  facias.  The  officer  making  the  sale  executes 
the  proper  deed.  An  absent  defendant  may  at  any  time  before 
the  sale  cause  his  appearance  to  be  entered,  and  upon  the  payment 
of  costs  the  proceedings  may  be  stayed,  and  may  afterwards  go 
on  as  if  his  appearance  had  been  duly  entered  in  the  beginning. 
When  a  decree  is  had  for  the  non-payment  of  an  instalment  of 

1  Hyman  v.  Kelly,  1  Nev.  179.  1877,  p.  705.     In  an  action  of  ejectment 

2  Weil  V.  Howard,  4  Nev.  .384.  for  the  recovery  of  mortgaged  lands,  and 

3  Corbett  v.  Rice,  2  Nev.  3.30.  in  actions  upon  the  bond,  a  tender  of  the 
*  Aiken  v.  Gale,  37  N.  II.  510.  sum  due  with  costs  is  a  satisfaction  of  the 
6  G.  S.  1867,  c.  122;  G.  L.  1878,  c.  136,  mortgage,  and  the  mortgagee  may  there- 

§§  14-16.     See  §§  1241-1243.  ujjon   be  compelled   to   reconvey.      Rev. 

6  Nixon's  Dig.  18G8,  pp.  608,  612  ;  Rev.     1877,  pp.  701,  702. 
332 


FORECLOSURE   AND   REDEMPTION.  [§  1350. 

interest    or  principal,  before    the  whole    mortgage   debt  is   due, 
and  it  shall  appear  to  the  court   that  a  part  of  the  mortgaged 
premises  cannot  be  sold  to  satisfy  the  amount  without  material  in- 
jury to  the  remaining  part,  and  that  it  is  just  and  reasonable  that 
the  whole  should  be  sold  together,  the  court  may  decree  a  sale  of 
the  whole,  and  apply  the  proceeds  of  the  sale,  or  so  much  as  may 
be  necessary,  as  well  to  the  payment  of  the  amount  then  due  as  to 
the  payment  of  the  whole  or  residue  of  the  debt,  making  a  proper 
rebate  of  interest  upon  the  part  of  the  debt  not  then  due  and 
payable.     When  the  defendant  has  entered  an  appearance  but  has 
filed  no  answer,  execution  for  sale  is  not  issued  until  the  expira- 
tion of  such  time  as  may  be  fixed  by  the  rules  of  the  court,  not 
less  than  two,  nor  moi-e  than  four  months.^     If  the  mortgagor  or 
any  of  those  holding  under  him  has  absconded,  or  is  unknown  to 
the  holder  of  the  mortgage,  service  may  be  made  by  publication.^ 
The  chancellor  may  decree  the  payment  of  any  excess  of  the  mort- 
gage debt  above  the  proceeds  of  sale,  by  any  of  the  parties  to  the 
suit  who  may  be  liable  for  it  either  at  law  or  in   equity .^     The 
practice  in  such  cases  is  to  issue  an  order  after  sale,  reciting  the 
proceedings  under  the  execution,  and  the  existence  and  amount  of 
the  deficiency  as  ascertained  by  the  statement  of   the  officer  by 
whom  the  decree  of  sale  was  executed,  and  to  award  an  execution 
to  make  the  amount  with  interest  and  costs  of  the  order  and  exe- 
cution.* 

When  a  foreclosure  is  sought  for  an  instalment  only  of  the  debt, 
the  remainder  not  being  due,  the  court  will  not  direct  the  whole 
premises  to  be  sold,  if  they  can  be  divided ;  and  if  a  decree  has 
been  entered  for  the  sale  of  the  whole  premises  when  they  are 
manifestly  divisible,  the  court  may  in  its  discretion  regulate  the 
execution  of  the  decree.^ 

When  no  one  is  necessarily  interested  in  the  mortgaged  prem- 
ises other  than  the  mortgagor  and  mortgagee,  and  the  premises 
are  subject  to  one  mortgage  only,  foreclosure  may  be  had  by  scire 
facias  in  the  Supreme  Court  or  court  of  common  pleas  of  the 
county  where  the  lands  lie.''     Under  this  process,  after  judgment, 

>  llev.  1877,  j.p.  1 16-118,  §§  71-77.  '  Am.  Life  &  Fire  Ins.  &  Trust  Co.  v. 

2  Laws,  l«7.'J,  ]).  ir.l  ;  llev.  1877,  p.  704.  Ryerson,  6  N.  J.  Eq.  (2  Ilulst.)  9. 

'Nixon's   IXifr.    18C8,   p.  119;   Act  of  «  Nixon's  Dig.  18G8,  p.  G09  ;  Kev.  1877, 

March  29,  1860  ;  llev.  1877,  p.  118  §  76.  p.  703. 

♦  Mut.  Life  lua.  Co  v.  .Soullmrd,  25  N. 
J.  Eq.  .3.37. 

333 


§  1351.]  STATUTORY    PROVISIONS    RKI.AllNG    TO 

tlio  |)ri'misi'.s  are  soM  in  tlu;  same  maniu'r  as  uuiler  other  execu- 
tions for  the  sah'  dI"  real  estate,  siud  conveyeil  to  the  purchaser.^ 
If  there  is  any  aiirphis  after  paying  the  mortgage  debt,  it  is  paid 
into  court  by  the  sheritl"  or  other  ollicer  making  the  sale;  and  the 
court  orders  it  to  be  applied  in  satisfaction  of  any  judgment  or 
other  lien  upon  the  property,  if  there  be  any,  but  otherwise  to 
be  paid  by  the  debtor. 

There  is  no  redemption  after  sale. 

1351.  New  York.-  —  On  a  bill  in  equity  for  the  foreclosure  of 
a  mortgage,  the  court  decrees  a  sale  of  the  property,  or  such  part 
of  it  as  may  be  sufficient  to  discharge  the  debt  and  costs  of  suit. 
The  court  may  compel  a  delivery  of  the  possession  of  the  premises 
to  the  purchaser ;  and  on  the  coming  in  of  the  report  of  sale,  the 
court  may  decree  the  payment,  by  the  mortgagor,  of  any  balance 
of  the  mortgage  debt  that  may  remain  unsatisfied  after  a  sale  of 
the  premises,  in  cases  in  which  such  balance  is  recoverable  at 
law ;  ^  and  for  that  purpose  may  issue  the  necessary  executions 
against  other  property  of  the  mortgagor,  or  against  his  person. 
After  the  bill  is  tiled,  and  while  it  is  pending,  and  after  a  decree 
is  rendered,  no  proceedings  can  be  had  at  law  for  the  recovery  of 
the  debt,  unless  authorized  by  the  Court  of  Chancery.*  Any 
other  person  besides  the  mortgagor,  who  is  under  obligation  to 
pay  the  debt,  may  be  made  a  party  to  the  bill,  and  the  court  may 
decree  payment  of  the  debt  remaining  unsatisfied,  as  well  against 
him  as  against  the  mortgagor.  Upon  the  filing  of  the  bill,  the 
complainant  must  state  whether  any  proceedings  at  law  have  been 
had ;  and  if  it  appear  that  a  judgment  has  been  obtained  in  a  suit 
at  law  no  proceedings  can  be  had  unless  the  sheriff  has  returned 
the  execution  unsatisfied  in  whole  or  in  part,  and  that  the  de- 
fendant has  no  property  whereof  to  satisfy  it,  except  the  mort- 
gaged premises.^ 

1  As  to  advertising  and  a'djourning  the  *  A  suit  at  law  need  not  be  actually  dis- 
sale,  see  Nixon's  Dig.  1S68,  p.  866;  Hewitt  continued  bei'orc  filing  the  bill ;  but  upon 
V.  Montclair  R.  R.  Co.  25  N.  J.  Eq.  392.  the  filing  of  it  the  suit  is  suspended.   Wil- 

2  .3  R.  S.  IS?.""),  pp.  198-200;  Fay's  Dig.  liamson  i;.  Champlin,  8  Taige,  70. 

of  Laws,  1876,  vol.  .3,  pp.  406-408.  ^  Tliis  pruliibition  is  not  limited  to  a 

8  A  contingent  decree  for  the  payment  suit  against  the  mortgagor,  but  applies  to 

of  any  deficiency  may  be  made  before  sale,  a  suit  against  a  surety  or  one  who  has  as- 

McCarthy  v.  Graham,  8  Paige,  480.  sumed  to  pay  the  mortgage.     Pattison  v. 

The  master's  deed  passes  the  title  from  Powers,  4  Paige,  .549.    If  the  plaintiff  un- 

the  time  of  its  delivery.     Fuller  v.  Van  truly  aver  that  no  proceedings  have  been 

Geesen,  4  Hill,  171.  had,  the  defendant  may  plead  a  judgment 

334 


FORECLOSURE   AND   REDEMPTION. 


[§  1351. 


Sales  are  made  by  the  sheriff  of  the  county  where  the  prem- 
ises or  some  part  of  them  are  situated,  unless  otherwise  ordered 
in  the  decree.^  Deeds  are  executed  by  the  sheriff"  which  vest  in 
the  purchaser  the  estate  that  would  have  vested  in  the  mortgagee 
if  the  equity  of  redemption  had  been  foreclosed.^  Any  surplus 
after  discharging  the  debt  is  brought  into  court  for  the  use  of  the 
defendant,  or  of  the  person  entitled  to  it.^  If  not  applied  for 
within  three  months,  the  courts  direct  it  to  be  put  at  interest  for 
the  benefit  of  those  interested. 

When  a  bill  is  filed  for  the  foreclosure  of  a  mortgage,  upon 
which  some  instalments  are  not  due,  the  bill  is  dismissed  upon 
the  defendant's  bringing  into  court,  at  any  time  before  the  decree 
of  sale,  the  principal  and  interest  due,  with  costs ;  if  brought 
after  the  decree,  the  proceedings  are  stayed  ;  but  the  court  enters 
a  decree  of  foreclosure  and  sale,  to  be  enforced  by  a  further  order 
of  the  court,  upon  a  subsequent  default.*  Where  a  part  only  of 
the  debt  is  due  before  sale,  the  court  directs  a  reference  to  a 
master,  to  ascertain  and  report  the  situation  of  the  premises  ;  ^ 
and  if  it  appear  that  they  can  be  sold  in  parcels,  without  injury, 
the  decree  directs  so  much  to  be  sold  as  will  be  sufficient  to  pay 

at  law  without  averring  that  no  execution  v.  Brown,  lb.  370 ;  Engle  v.  Underliill,  3 

has  been  issued  on  it.     North  Kivcr  Bank  Edw.  Ch.  249. 

I',  lloger-s,  8   Paitje,  648.     See,  also,  as  to  i  If  the  sale  be  made  by  a  referee  ap- 

the  etfeet  of  a  judgment,  Grosveuort-.  Day,  pointed   for   the   purpose,  his   duties   are 

Clarke  Ch.  109.  ministerial  in  their  nature,  and  he  must 

The  mere  commencement  of  proceedings  follow  the  terms  of  sale,  and  is  personally 

at  law,  if  no  judgment  has  been  recovered,  liable  if  he  disregards  them.     Day  v.  Ber- 

wiil  not  prevent  the  tiling  of  a  bill  to  fore-  gen,  53  N.  Y.  404. 

close.     But  the  suit  cannot  be  pro-sccuted  -  When  the  sale  is  made  by  a   master. 


without  the  permission  of  court.  This 
may  bo  given  in  some  cases,  as,  for  in- 
stance, where  the  suit  is  against  a  third 
person  liable  for  the  debt,  l)ut  who  is  not 
a   i)arty    to   the   bill   of  foreclosure,   and 


no  report  or  confirmation  is  necessary  bo- 
fore  making  the  deed.  Monell  v.  Law- 
rence, 12  Johns.  521. 

8  Bostwick  V.  Pulver,  3  How.  Pr.  69. 

*  Sec,  also,  Brinkerhoflf  v.  Thallhimcr, 


might  not  be  liable  to  a  decree  for  the  de-  2  Jolins.  (N.  Y.)  Ch.  486;  Ellis  v.  Craig, 

ficiency  if  he  were  a  party,  and  where  tlic  7  lb.  7. 

premises  are  not  suflicient  to  j)ay  the  debt.  ^  An   onler  of  sale  will    not    be    made 

The  court  will    permit  the  suit  at  law  to  without  reference.  Ontario  Bank  r.  Strong, 

proceed  so  far  as  to  test  the  validity  of  a  2  Paige,  301. 

defence  set  ui>,  but  will  not  allow  an  e.xc-  If    tiic   master   has   reported    that   the 

cution  to   be   taken  out  on  the  judgment  premises  cannot  be  .sold  in  parcels,  on  an- 

without   further  order  of  court.     Suydam  other  instalment   becoming  duo  a  second 

V.  Bartle,  9  Paige,  294.    See,  also,  Thomas  reference    is    not   necessary.      Knapp   v. 

Buniliain,  1 1  Paige,  .'t.'IO. 

335 


§  1352.] 


STATUTORY   PROVISIONS  RELATING   TO 


the  di'bt  ami  costs  ;  '  ami  the  decree  remains  as  security  for  any 
subsequent  dctaull.- 

If  it  ai)i)ears  tliat  a  sale  of  the  whole  will  be  most  beneficial  to 
the  parties,  the  decree  is  entered  in  the  lirst  instance  for  the 
sale  of  the  whole  accordingly.^  In  such  case  the  proceeds  are  ap- 
plied to  the  payment  of  the  whole  debt  secured  whether  due  or 
not,  with  a  proper  rebate  of  interest  if  the  part  not  due  does  not 
beiu"  interest ;  or  the  court  may  direct  the  balance,  after  paying 
the  amount  due,  to  be  put  at  interest  for  the  benefit  of  the  com- 
plainant, to  be  paid  when  the  balance  shall  become  due,  and  the 
surplus  for  the  benefit  of  the  defendant,  to  be  paid  on  the  order 
of  the  court. 

No  decree  of  foreclosure  is  made  unless  proof  is  given  that  no- 
tice of  the  pendency  of  the  suit  has  been  filed  in  the  office  of  the 
county  clerk  at  least  twenty  days  before  the  decree  is  made.* 

1352.  North  Carolina.  —  Mortgages  are  foreclosed  by  action 
in  the  nature  of  a  bill  in  equity.^     The  suit  must  be  brought  in 


1  The  master  is  not  bound  to  sell  in 
parcels  unless  tlie  decree  so  directs.  Wood- 
hull  V.  Osborne,  2.  Edw.  Ch.  614  ;  Lansing 
V.  Capron,  1  Johns.  Ch.  617. 

2  If  the  mortgage  be  conditioned  for  the 
support  of  the  mortgagee  during  life,  no 
decree  for  subsequent  breaches  can  be 
made  without  supplementary  proceedings. 
Ferguson  v.  Ferguson,  2  N.  Y.  360. 

So  where  interest  only  is  due.  Brinkcr- 
hoff  i;.  Thallhinier,  2  Johns.  Ch.  486  ;  Ly- 
man i;.  Sale.  lb.  487  ;  Campbell  v.  Ma- 
comb, 4  Johns.  Ch.  534  ;  Delabigarre  v. 
Bush,  2  Johns.  490;  Brevoort  v.  Jackson, 
1  Edw.  Ch.  447. 

2  A  sale  of  the  whole  may  be  decreed 
when  the  mortgage  is  inade(juate  security, 
and  the  mortgagor  is  irresponsible,  al- 
though the  whole  debt  be  not  due,  unless 
the  mortgagor  will  pay  the  amount  due, 
or  give  security  for  the  residue.  Suffern 
V.  Johnson,  1  Paige  (N.  Y.),  450.  The 
court  may  order  a  sale  of  the  whole  prem- 
ises, with  a  view,  not  to  the  satisfaction  of 
the  mortgage,  but  to  the  better  protection 
of  the  subsequent  parties  in  interest.  Liv- 
ingston V.  Mildrum,  I'J  N.  Y.  440,  443; 
Snyder  v.  Stafford,  11  Paige,  71 ;  Deforest 
V.  Farley,  4  ilun  (N.  Y.),  640. 

336 


So  when  there  is  a  second  mortgage  on 
the  same  premises,  which  is  due,  upon  the 
foreclosure  of  the  first  mortgage,  although 
a  part  only  of  that  is  due,  the  court  will 
direct  a  sale  of  the  whole  premises,  or  so 
much  as  will  satisfy  the  whole  of  both 
mortgages,  unless  the  defendant  pay  the 
amount  due  with  costs  before  sale.  Hall 
V.  Bamber,  10  Paige  (N.  Y.),  296.  Al- 
though the  premises  consist  of  two  or 
more  parcels,  if  they  have  previously  been 
held,  used,  and  conveyed  together  as  one 
farm,  a  sale  of  the  whole  in  one  parcel  is 
good.  Anderson  v.  Austin,  34  Barb.  319  ; 
and  see  Wolcott  v.  Schenck,  23  How.  Pr. 
385  ;  Woodliull  v.  Osborne,  2  Edw.  Ch. 
615. 

*  R.  S.  1875,  p.  486  ;  Dig.  of  Laws,  vol. 
3,  p.  664.  A  decree  without  such  ^jroof, 
though  irregular,  is  not  void.  Potter  v. 
Rowland,  8  N.  Y.  448;  Curtis  v.  Hitch- 
cock, 10  Paige,  399  ;  Whiten.  Coulter,  1 
Hun  (N.  Y.),357. 

^  All  distinction  between  actions  at  law 
and  suits  in  equity  is  abolished.  Coiisti- 
tion,  sec.  1,  art.  14  ;  Battle's  Hevisal  (1873), 
137. 


FORECLOSURE  AND  REDEMPTION.         [§  1353. 

the  county  in  which  the  pi'emises  or  some  part  of  them  are  situ- 
ated.^  If  any  party  having  an  interest  in  the  mortgaged  prem- 
ises or  a  lien  upon  them  is  unknown  to  the  plaintiff,  and  his 
residence  cannot  with  reasonable  diligence  be  ascertained,  upon 
affidavit  of  such  fact  the  court  grants  an  order  that  the  summons 
be  served  by  pubhshing  the  same  for  six  weeks,  once  in  each  week 
successively,  in  one  newspaper  printed  in  Raleigh,  and  in  one 
printed  in  the  county  where  the  premises  lie.^  In  actions  to  fore- 
close mortgages,  the  court  has  power  to  adjudge  and  direct  the 
payment  by  the  mortgagor  of  any  residue  of  the  mortgage  debt 
that  may  remain  unsatisfied  after  a  sale  of  the  mortgaged  prem- 
ises, in  cases  in  which  the  mortgagor  shall  be  personally  liable  for 
the  debt  secured  by  such  mortgage  ;  and  if  the  mortgage  debt  be 
secured  by  the  covenant  or  obligation  of  any  person  other  than 
the  mortgagor,  the  plaintiff  may  make  such  person  a  party  to 
the  action,  and  the  court  may  adjudge  payment  of  the  residue  of 
such  debt  remaining  unsatisfied  after  the  sale  against  such  other 
person,  and  may  enforce  the  judgment  as  in  other  cases. ^  The 
premises  are  sold  at  the  court-house  in  the  county  where  situated, 
after  advertisement  and  notice,  by  the  sheriff  of  the  county,  or 
by  a  referee  appointed  by  the  court  for  the  purpose,  whose  con- 
veyance to  the  purchaser  is  effectual  to  pass  the  rights  and  inter- 
ests of  the  parties  adjudged  to  be  sold.*  There  is  no  redemption 
after  sale.  Under  the  present  Code  a  judgment  may  be  rendered 
against  any  one  personally  liable  for  the  mortgage  debt,  for  a 
deficiency  after  the  sale,  though  this  could  not  be  done  under  the 
former  equity  practice.^ 

1353.  Ohio.*'  —  In  the  foreclosure  of  a  mortgage  a  sale  of  the 
premises  is  ordered  in  all  cases.  If  the  mortgage  embraces  an 
entire  tract  of  land,  or  separate  tracts  situated  in  two  or  more 
counties,  the  sheriff  of  each  county  in  which  the  lands  are  situ- 
ated is  ordered  to  make  sale  of  the  land  situated  in  the  county  of 

'  Battle's  Hevisal,  1873,  p.  157.  1853;  but  the  mode  of  proceeding  is  in 

^  lb.  p.  162.  accordance  with  general  equity  principles. 

»  lb.  p.  171,  §  126.  The  former  statute  remedy  i>y  scire  facias 

*  lb.  203,  3'Jl.  (lid   not    jirecludo    foreclosure  by  bill    iu 

'  lb.  200;  Fleming  r.  Sitton,  1  l)ev.  &  equity.     Anonymous,  1   Ohio,  235.     The 

But.  Eq.  621.  system  of   procedure  by  scire  facias   v/aa 

•■•  Sayler's  Stat.  1876,  p.  2380.    Sec,  also,  adopted  by   the  territorial  government  in 

U.  S.  (Sup.  S.  &  S.)  561  ;  Laws,  1870,  p.  17'.»5,  from  the  Statutes  of  I'enn.sylvania. 

114.    The  distinction   between  actions  at  Biggerstaff  y.  Loveland,  8  Ohio,  45. 

law  and  suits  in  equity  was  abolished  in 

VOL.  n.                             22  337                         • 


§  1353.]  STATUTORY    PROVISIONS   RELATING   TO 

which  ho  is  sliorilT,  uiili'ss  in  the  ()j)iiru)ii  of  the  court  the  circum- 
stances of  the  case,  or  the  interests  of  the  parties,  appear  to  re- 
quire the  sale  to  be  made  by  a  single  otHcer  ;  in  which  case  the 
court  may  order  the  sale  to  be  made  by  the  sheriff  of  either 
county  in  wiiich  any  part  of  the  mortgaged  premises  may  be  situ- 
ated, or  by  a  master  commissioner,  and  the  court  may  order  the 
lands  to  be  sold  entire  or  in  parcels,  as  the  interests  of  the  parties 
may  require  ;  and  in  such  cases  the  mortgaged  premises  must  be 
appraised  by  three  disinterested  freeholders  of  either  or  any  of  the 
counties  in  which  the  lands  may  be  situated,  and  notice  of  the 
sale  given  by  advertisement  in  such  of  said  counties  as  is  required 
in  the  case  of  the  sale  of  real  estate  on  execution  ;  and  the  court 
may,  in  the  order  of  sale  or  on  confirmation  of.  the  sale,  make 
such  order  touching  the  distribution  of  the  proceeds  of  sale  as 
may  be  necessary  to  protect  and  preserve  the  relative  rights  and 
privileges  of  all  lien  holders  on  such  premises,  or  on  the  several 
parcels  thereof.  Where  the  lands  or  any  parcels  thereof  have 
been  twice  advertised  and  offered  for  sale,  and  shall  remain  un- 
sold for  want  of  bidders,  the  court  being  satisfied  thereof,  on 
motion  of  the  plaintiff  or  defendant  at  the  time  of  ordering  such 
new  appraisement,  may  also  order  that  said  land  be  sold  on  time 
as  follows :  one  third  cash  in  hand,  one  third  in  nine  months  from 
the  day  of  sale,  and  the  remaining  third  in  eighteen  months  from 
the  day  of  sale,  the  deferred  payments  to  draw  six  per  cent,  in- 
terest, and  to  be  secured  by  mortgage  on  the  premises.^ 

The  plaintiff  may  also  ask  in  his  petition  for  a  judgment  for 
the  money  claimed  to  be  due  ;  and  such  proceedings  shall  be  had 
and  judgment  rendered  as  in  other  civil  actions  for  the  recovery 
of  money  only.^ 

Notice  of  the  sale  must  be  given  for  at  least  thirty  days  before 
the  sale  in  some  newspaper  printed  and  of  general  circulation  in 
the  county ;  or  in  case  there  be  none,  then  in  one  of  general  cir- 
culation therein  and  by  posting  upon  the  court-house  door,  and  in 
five  other  public  places  in  the  county,  two  of  which  must  be  in 
the  township  \yhere  the  lands  lie.     If  the  newspaper  be  published 

1  R.  S.  (Sup.  S.  &  S.)  575.  Ohio,  456.    There  may  be  judgment  against 

2  Laws,  1870,  p.  114,  §  5.    See  Keller  u.  all  the  makers  of  the  note,  although  the 
Wenzell,  23  Ohio  St.  579;  Wood  v.  Stau-  mortgage  is   cxeeuted  by  only  a  part  of 
berry,  21  Ohio  St.  142;  Hamilton  v.  Jef-  them.     King  v.  Safford,  19  Ohio  St.  587. 
ferson,  13  Ohio,  427  ;  Myera  v.  Hewitt,  10 

•  838 


FORECLOSUKE   AND   REDEMPTION.  [§  1354. 

weekly,  the  notice  must  be  inserted  in  five  consecutive  numbers. 
Sales  made  without  such  advertisement  are  set  aside  on  motion. 
A  confirmation  of  the  sale  is  necessary,  after  which  the  shevitf  or 
other  officer  makes  a  conveyance  to  the  purchaser,  which  is  effect- 
ual to  pass  all  the  title  of  the  mortgagor  at  the  time  of  making 
the  mortgage.     There  is  no  redemption  afterwards.^ 

1354.  Oregon.-  —  Mortgages  are  foreclosed  by  suit  and  the 
property  adjudged  to  be  sold.  If  a  promissory  note  or  other  per- 
sonal obligation  for  the  payment  of  the  debt  has  been  given,  the 
court  also  decrees  a  recovery  of  the  amount  of  such  debt.  Any 
person  having  a  lien  subsequent  to  the  plaintiff  upon  the  same 
property,  and  any  person  who  has  given  a  promissory  note  or 
other  personal  obligation  for  the  payment  of  the  debt,  must  be 
made  a  defendant  in  the  suit ;  and  any  person  having  a  prior  lien 
may  be  made  defendant  at  the  option  of  the  plaintiff.  Any  de- 
fendant having  a  lien  may  have  a  decree  in  the  same  manner  as  if 
he  were  plaintiff. 

When  a  decree  is  given  foreclosing  two  or  more  liens  upon  the 
same  property'  or  any  portion  thereof  in  favor  of  different  persons 
not  united  in  interest,  such  decree  must  determine  and  specify 
the  order  of  time,  according  to  their  priority,  in  which  the  debts 
secured  by  such  liens  shall  be  satisfied  out  of  the  proceeds  of  the 
sale  of  the  property.  The  decree  may  be  enforced  by  execution 
as  an  ordinary  decree  for  the  recovery  of  money,  except  that  when 
a  decree  of  foreclosure  and  sale  is  given,  an  execution  may  issue 
thereon  against  the  property  adjudged  to  be  sold.  If  the  decree 
is  in  favor  of  the  plaintiff  only,  the  execution  may  issue  as  in  or- 
dinary cases  ;  but  if  it  be  in  favor  of  different  persons,  not  united 
in  interest,  it  shall  issue  upon  the  joint  request  of  such  persons, 
or  upon  tlje  order  of  the  court  or  judge  thereof,  on  the  motion  of 
either  of  tliem  ;  when  the  decree  is  also  against  the  defendants  or 
any  one  of  them  in  person,  and  the  proceeds  of  the  sale  of  the 
property  upon  which  the  lien  is  foreclosed  is  not  sufficient  to  sat- 
isfy the  decree,  as  to  the  sum  remaining  unsatisfied,  the  decree 
may  be  enforced  by  execution  as  in  orchnary  cases.  When  in 
such  case  the  decree  is  in  favor  of  different  persons  not  united  in 
interest,  it  shall  be  deemed  a  se[)arate  decree  as  to  such  persons, 
and  may  be  enforced  accordingly. 

'  Codeof  Civil  I'rocediin,-,  1874,  §§  436-         2  Qen.  Laws  (1872),  p.  I'JG. 
438.     Sec  Mc Arthur  v.  Franklin,  16  Ohio 
St.  1 93 ;  Carter  v.  Wulkcr,  2  Ohio,  St.  339.  330 


§  1355.]  STATUTORY   PROVISIONS   RELATING   TO 

During  the  pendency  of  an  action  of  law  for  the  recovery  of  a 
debt  secured  by  any  lien,  a  suit  cannot  be  maintained  for  the  fore- 
closure of  such  lien,  nor  thereafter,  unless  judgment  be  given  in 
such  action  that  the  plaintiff  recover  such  debt  or  some  part 
thereof,  and  an  execution  thereon  against  the  property  of  the  de- 
fendant in  the  judgment  is  returned  unsatisfied  in  whole  or  in 
part.  When  a  suit  is  commenced  to  foreclose  a  lien  by  which  a 
debt  is  secured,  which  debt  is  payable  in  instalments  either  of  in- 
terest or  principal,  and  any  of  such  instalments  is  not  then  due, 
the  court  sliall  decree  a  foreclosure  of  the  lien,  and  may  also  de- 
cree a  sale  of  the  property  for  the  satisfaction  of  the  whole  of 
such  debt,  or  so  much  thereof  as  may  be  necessary  to  satisfy  the 
instalment  then  due,  with  costs  of  suit ;  and  in  the  latter  case  the 
decree  of  foreclosure  as  to  the  remainder  of  the  property  may  be 
enforced  by  an  order  of  sale  in  whole  or  in  part,  whenever  default 
shall  be  made  in  the  payment  of  the  instalments  not  then  due. 
If,  before  a  decree  is  given,  the  amount  then  due,  with  the  costs  of 
suit,  is  brought  into  court  and  paid  to  the  clerk,  the  suit  shall  be 
dismissed  ;  and  if  the  same  be  done  after  decree  and  before  sale, 
the  effect  of  the  decree  as  to  the  amount  then  due  and  paid  shall 
be  terminated,  and  the  execution,  if  any  have  issued,  be  recalled 
by  the  clerk.  When  an  instalment  not  due  is  adjudged  to  be 
paid,  the  court  shall  determine  and  specify  in  the  decree  what 
sum  shall  be  received  in  satisfaction  thereof,  which  sum  may  be 
equal  to  such  instalment  or  otherwise,  according  to  the  present 
value  thereof. 

1355.  Pennsylvania.  —  In  the  case  of  mortgages  given  by  cor- 
porations the  Supreme  Court  of  the  commonwealth  may  exercise 
all  the  power  and  jurisdiction  of  a  court  of  chancery. ^  There  has 
never  been  any  distinct  chancery  tribunal  in  this  state,  and  the 
chancei-y  powers  conferred  previous  to  the  above  statute  never 
embraced  the  subject  of  mortgages;  therefore  there  was  no  juris- 
diction to  decree  a  foreclosure  or  sale  under  a  mortgage  ;  but  as 
the  court  had  jurisdiction  of  trusts,  it  could  in  behalf  of  a  cestui 
que  trust  compel  trustees  under  a  mortgage  with  a  power  of 
sale  to  execute  the  power  according  to  its  terms.     The  court  de- 

1  Brightly '8   Purdon'a  Dig.  1872,  593;  dy's  Appeal,  65  Pa.  St.  290;  McElrath  v. 

Act  of  April  11,  1862.     This  provision  is  Pittsburg  &  Steubenville  R.  R.  Co.  55  Pa. 

constitutional,   as   applied   to    mortgages  St.  189. 
made  before  the  act  was  passed.     McCur- 

340 


FORECLOSURE   AND   REDEMPTION.  [§  1355. 

clined,  however,  to  do  more  than  to  control  or  direct  the  execution 
of  a  power  of  sale  ah-eady  conferred,  and  would  not  itself  exer- 
cise the  power.i  xhe  above  provision  was  accordingly  enacted  in 
order  that  there  might  be  a  remedy  more  adequate  for  the  admin- 
istration of  the  large  mortgages  which  corporations  are  in  the 
habit  of  making,  than  was  furnished  by  the  writ  of  scire  facias 
by  which  mortgages  are  generally  foreclosed. 

The  mode  of  foreclosing  mortgages  in  other  cases  is  by  scire 
facias.  When  default  has  been  made  on  a  mortgage,  the  holder  of 
the  mortgage,  at  any  time  after  the  expiration  of  twelve  months  ^ 
next  ensuing  the  last  day  when  the  mortgage  money  ought  to  be 
paid,  or  other  condition  performed,  may  sue  forth  a  writ  of  scire 
facias^  from  the  court  of  common  pleas  for  the  county  or  city 
where  the  lands  lie,  directed  to  the  proper  officer,  requiring  him 
to  make  known  to  the  mortgagor  or  his  heirs,  executors,  or  ad- 
ministrators, that  he  show  cause  why  the  mortgaged  premises 
should  not  be  seized  and  taken  on  execution  for  payment  of  the 
mortgage  money,  with  interest.  If  the  defendant  appears,  he  may 
plead  satisfaction  of  part  or  all  of  the  mortgage  money,  or  make 
any  other  lawful  plea,  in  avoidance  of  the  deed  or  debt ;  but  if  he 
do  not  appear  on  the  day  the  writ  is  made  returnable,  if  dam- 
ages only  are  recoverable,  an  inquest  is  to  be  forthwith  charged 
to  inquire  thereof,  and  judgment  is  entered  that  the  plaintiff  have 
execution  by  levari  facias ;  by  virtue  of  which  the  premises  are 
taken  in  execution  and  exposed  to  sale  and  conveyed  to  the  buyer, 

1  Bradley  v.  Chester  Valley  R.  R.  Co.  Rawle,  166  ;  Ewart  v.  Irwin,  1  Phila.  78. 
36  Pa.  St.  141;  Ashhurstr.  Montour  Iron  But  if  the  nnortgage  provides  that  on  a 
Co.  35  Pa.  St.  30.  failure  to  pay  any  instalment  for  a  certain 

2  Brightly'a  Dig.  1872,  p.  482.  This  period  the  whole  debt  should  become  due 
limitation  may  be  waived  in  the  mort-  and  collectible,  scire  facias  may  issue 
gage  subsefiucntly.  But  the  waiver  must  forthwith  upon  the  default  for  the  whole 
be  explicit  and  by  the  party  authorized  to  debt.  Hosie  v.  Gray,  71  Pa.  St.  193. 
make  it ;  and  must  Ite  in  the  mortgage  it-  The  provisions  of  a  stay  law  may  be 
•elf  and  not  in  the  bond.  Kennedy  v.  waived  in  the  mortgage  by  express  pro- 
Rons,  25  Pa.  St.  356;  Huiing  v.  Drexell,  vision.  Drcxel  v.  Miller,  49  Pa.  St.  246. 
7  WaU8,  128  ;  Walker  v.  Tracey,  1  Phila.  Upon  any  default  ejectment  may  be  main- 
225;  Whitecar  i;.  Worrell,  I  Phila.  44;  taincd  for  possession  of  the  land.  Smith 
Black  1-.  Gal  way,  24  Pa.  St.  18.  v.    Shuler,   12    S.   &   R.   240;    Fickos  v. 

'The   mortgagee    cannot    proceed    by  Ersick,  2  Rawle,  166  ;  Martin  i'.  Jackson, 

tcire  fncicu   to   recover   successive  instal-  27  Pa.  St.  504.      But  this   process    only 

ments  of  a  mortgage  debt.     This    remedy  gives  possession,  which  may  bo  maintained 

puts  an  end  to  the  security,  and  disposes  until  the  debt  is  paid.     Colwell  v.  Ham- 

of  the  whole  estate.     Fickes  v.  Ersick,  2  ilton,  10  Watts,  417. 

341 


§  1855.]  STATUTORY    TROVISIONS  RELATING   TO 

and  the  money  rendered  to  the  niortujage  creditor  ;  but  for  want 
of  buyers  to  bo  delivered  to  the  creditor,  in  the  same  manner  as 
hmd  taken  upon  execution  for  other  debts.  When  the  lands  are 
sold  or  delivered  they  are  held  discharged  of  all  equity  of  redemp- 
tion, and  all  incumbrances  made  or  suffered  by  the  mortgagor, 
his  heirs  or  assigns;  but  before  sale  is  made,  notice  must  be  given 
in  writing  of  the  time  and  place  of  sale  in  the  same  manner  as 
is  directed  concerning  sales  upon  execution.^  Any  surplus  realized 
above  the  debt  and  costs  must  be  returned  by  the  officer  to  the 
defendant.  On  a  reversal  of  the  judgment  under  vs^hich  a  sale 
has  been  made,  the  purchaser  is  protected  in  his  title,  unless  the 
process  was  void.^  When  an  action  is  broijght  on  a  mortgage,  a 
memorandum  of  the  names  of  the  parties  and  date  of  the  action 
is  furnished  to  the  recorder  and  entered  upon  the  record  of  the 
mortgage.  An  assignee  of  the  mortgage  may  sue  in  his  own 
name  or  in  the  name  of  the  mortgagee  for  the  use  of  the  assignee  ; 
or  the  record  may  be  amended  after  suit  has  been  commenced, 
and  the  proper  persons  made  parties.  Mortgages  of  leasehold 
estates  are  foreclosed  in  the  same  manner.^ 

If  the  mortgagee  has  released  a  portion  of  the  premises,  the  de- 
fendant in  scire  facias  may  plead  that  the  balance  claimed  is 
greater  than  in  a  just  proportion  should  be  levied  on  the  premises 
described  in  the  writ.^  In  general  as  to  the  defences  that  may  be 
taken,  although  the  action  be  one  at  law,  equitable  defences  are 
not  necessarily  excluded.^  Any  defence  may  be  set  up  in  this  ac- 
tion that  may  be  set  up  against  the  mortgage  debt ;  as  that  there 

1  This  is   a   proceeding  in   rem.     The     Wilson   v.  McCulIough,  19   Pa.    St.    77  ; 
effect  of  the  sale  is  to  extinguish  the  equity     Burd  v.  Dansdale,  2  Binn.  80. 

of  redemption  and  transfer  the  estate  as  »  Before  this  statute  after  an  assign- 
fully  as  it  existed  in  the  mortgagor  before  ment  duly  executed  and  recorded,  no  suit 
the  mortgage.  Ilartman  v.  Ogborn,  54  could  be  maintained  in  the  name  of  the 
Pa.  St.  120.  The  wife's  dower  is  barred  assignor  for  the  use  of  those  having  the 
though  she  did  not  join  in  the  mortgage,  equitable  interest  in  the  mortgage.  Pryor 
Scott  V.  Crosdale,  2  Dall.  127.  The  sale  v.  Wood,  31  Pa.  St.  142.  If  the  assign- 
must  be  by  the  sheriff  of  the  county  where  ment  was  not  formal  and  legal,  the  suit 
the  land  lies.  He  can  sell  the  thing  out-  could  be  rauintained  by  the  assignor. 
side  of  it.  Menges  i;.  Oyster,  4  W.  &  S.  Partridge  v.  Partridge,  38  Pa.  St.  78 ; 
20.  Ab  to  distribution  of  surplus,  see  Moore  v.  Harrisburg  Bank,  8  Watts,  138. 
Selden's  Appeal,  74  Pa.  St.  323.  151. 

2  See  Caldwell  v.  Walters,  18  Pa.  St.  *  Dig.  of  Stat,  supra,  p.  480. 

84;  Evans   v.   Meylert,    19  Pa.    St.  402;         ^  Ewart  v.  Irwin,  1  Phila.  78;  S.  C.  7 


Leg.  Int.  134. 


342 


FORECLOSURE   AND   REDEMPTION. 


[§  1355. 


was  no  consideration,  or  that  this  was  void  or  illegal,^  or  that  the 
consideration  has  failed,  as  in  the  case  of  a  purchase  money  mort- 
gage, when  the  mortgagor  has  been  ejected  by  reason  of  a  para- 
mount title  in  another.^  But  a  purchaser  of  several  lots  of  land 
having  secured  the  unpaid  purchase  money  by  a  mortgage  upon 
one  of  the  tracts  of  which  he  has  taken  a  separate  deed,  cannot  set 
up  as  a  defence  to  the  mortgage  a  failure  of  the  title  of  the  lots 
not  included  in  the  mortgage.^ 

This  is  a  local  action  and  must  issue  in  the  county  where  the 
land  lies.*  It  is  regarded  chiefly  as  a  proceeding  in  rem,  to  fore- 
close the  mortgage  and  convert  the  security  into  money.  It  is  a 
proceeding  in  personam  only  so  far  as  notice  to  the  parties  is  pre- 
scribed by  the  act.^  The  action  is  applicable  to  all  mortgages 
whether  recorded  or  not.  It  is  founded  on  the  instrument  itself » 
and  not  upon  the  record  of  it.  The  proper  plea  in  denial  of  the 
instrument  is  non  est  factum  and  not  nul  tiel  record.  But  on  the' 
trial  an  exemplification  of  the  record  may  be  used  as  evidence 
of  the  instrument  itself.^     No  one  except  the  mortgagor,  or  upon 


1  Raguet  V.  Roll,  7  Ohio,  77.  In  this 
case  the  defence  was  that  the  considera- 
tion was  in  part  for  the  forbearance  of  a 
criminal  prosecution. 

2  Morris  v.  Biicklej,  11  S.  &  R.  168. 
Otherwise  in  Illinois.  McFadden  v.  For- 
tier,  20  111.  509. 

'  Fisk  V.  Duncan,  83  Pa.  St.  196. 

*  Tyron  v.  Munson,  77  Pa.  St.  2.50. 
When  the  real  estate  bound  by  a  mortgage 
is  situate  in  two  or  more  counties,  it  is  law- 
ful for  the  mortgagee  or  his  assignee  to 
issue  his  writ  of  scire  facias,  to  enforce  the 
collection  of  said  mortgage  in  the  courts  of 
either  of  the  said  counties  where  the  mort- 
gage may  be  recorded,  and  proceed  to  ob- 
tain judgment  thereon  ;  provided  that  the 
sale  made  under  a  writ  of  levari  facias, 
issued  on  the  judgment  in  the  county 
where  the  judgment  shall  have  been  ob- 
tained, shall  be  sufiicient  to  vest  in  the  piir- 
chaMcr  the  entire  estate  of  the  mortgagor 
in  the  premises  bound  by  the  mortgage, 
as  well  as  in  the  county  where  the  scire  fa- 
cias may  have  ln-en  issued  as  in  the  other 
counties  where  the  mortgage  may  have 
been  recorded  ;  and  provided,  further,  that 


before  sale  be  made  under  the  writ  of  le- 
vari facias,  an  exemplification  of  the  rec- 
ord of  the  judgment  shall  be  taken  from 
the  county  where  the  same  was  obtained, 
and  entered  in  the  courts  of  the  other 
counties  where  said  mortgage  may  have 
been  recorded  ;  and  advertisement  of  the 
sale  shall  be  made  by  the  sheriff,  in  at 
least  one  newspaper  published  in  each  of 
the  other  counties,  in  addition  to  the  ad- 
vertisement as  now  directed  by  law  in  the 
county  in  which  the  sale  is  to  be  made. 
The  court  of  the  county  in  which  the 
judgment  may  be  obtained  upon  any  such 
mortgage  as  aforesaid  may  make  any  or- 
der which  may  appear  to  them  just  and 
efjuitable,  directing  the  lands  to  be  sold  in 
parcels,  as  divided  by  the  county  lines  or 
otherwise,  as  may  best  suit  the  interest  of 
parties  having  liens  upon  the  land  in  the 
different  counties.  I'urdon's  Ann.  Dig. 
p.  2111,  §§  6,  8. 

<■•  Ilartman  v.  Ogborn,  .')4  Pa.  St.  120; 
Wilson  V.  McCullough,  19  Pa.  St.  77; 
Brown  v.  Scott,  .')1  Pa.  St.  3.57. 

«  McLaughlin  v.  Ihmscn,  83  Pa.  St.  3(54 ; 
Tyron  i;.  Munson,  77  Pa.  St.  250;  Lan- 
343 


§§  lo5t),  lo5T.]       STATUTORY    PROVISIONS   RELATING   TO 

liis  death  his  porsonal  representatives,  is  a  necessary  party  to  the 
action.  A  purchaser  from  tlie  mortgagor  or  other  terre-tenant 
need  not  be  made  a  party  to  the  suit ;  though  it  is  the  general 
practice  to  give  such  purchaser  or  tenant  notice  of  it,  and  to  per- 
mit him  to  make  any  equitable  or  k^gal  defence  to  which  he  may 
be  entitleil,^  in  which  case  he  should  be  required  to  give  a  stipula- 
tion for  costs,  otherwise,  the  judgment  being  exclusively  in  rem, 
he  is  not  personally  responsible  for  them.  The  writ  takes  the 
place  of  a  declaration  and  should  show  on  its  face  an  immediate 
cause  of  action.^  The  judgment  cuts  off  all  rights  and  interests 
under  the  mortgage  which  are  not  paramount  to  it,  although  the 
parties  holding  rights  subsequent  to  the  mortgage  are  not  made 
parties  to  the  action,  and  have  no  notice  of  it.^  The  sale  under 
the  judgment  does  not  affect  prior  rights  and  liens,  but  is  subject 
to  them.^     The  judgment,  moreover,  extinguishes  the  debt.^ 

1356.  Rhode  Island.  —  There  is  jurisdiction  in  equity  of  the 
foreclosure  of  mortgages.  The  bill  should  be  brought  in  the 
supreme  court  for  the  county  in  which  the  premises  are  situ- 
ated. It  is  heard  and  determined 'according  to  the  principles  of 
equity.^ 

The  statutory  remedies  are  entry  and  possession,''  and  actions 
at  law  of  ejectment,  or  of  trespass  and  ejectment  for  obtaining 
possession.^  Redemption  may  be  made  within  three  years  after 
possession  is  acquired  in  either  way.^ 

1357.  South  Carolina.^o  —  Mortgages  are  foreclosed  by  ordi- 
nary suit  of  complaint  and  summons  in  the  nature  of  a  proceeding 
in  equity.  The  action  must  be  brought  in  the  county  where  the 
premises  or  some  part  thereof  are  situated.  If  any  party  inter- 
ested in  the  lien  or  in  the  property  is  unknown  to  the  plaintiff, 
and  his  residence  cannot,  with  reasonable  diligence,  be  ascertained 
by  him,  the  court  upon  affidavit  of  such  fact  may  grant  an  order 

caster  v.  Smith,  67  Pa.  St.  427  ;    Roberts  '  Reedy  v.  Burgert,  1  Ohio,  157. 

V,  Halstead,9Pa.  St.33;Freari;.Drinker,  «  G.  S.  1872,  c.  166,  §  14. 

8  Pa.  St.  520.  ^  See  §  1245. 

1  Mcvey's  Appeal,  4  Pa.  St.  80 ;  Hinds  8  gee  §  1279. 

V.  Allen,  34  Conn.  185.  »  G.  S.  1872,  c.  165. 

2  Swift  i;.  Allegheny  Building  Ass.  82  «  R.  s.  1873,  pp.  597,  610.  All  distinc- 
Pa.  St.  142.  tion  between  actions  at  law  and  in  equity 

8  Dennison  v.  Allen,  4  Ohio,  496.  is  abolished. 

*  Wertz's  Appeal,  65  Pa.  St.  306 ;  Hel- 
frich  V.  Weaver,  61  Pa.  St.  385. 

344 


FORECLOSURE   AND  REDEMPTION.  [§  1357. 

that  the  summons  be  served  on  such  party  by  publishing  the  same 
for  six  weeks,  once   in  each  week  successively,  in  a  newspaper 
printed  in  the   county  where  the   premises   are   situated.     The 
court  has  power  to  adjudge  and  decree  the  payment,  by  the  mort- 
gagor, of  any  residue  of  the  mortgage  debt  that  may  remain  un- 
satisfied after  a  sale  of  the  mortgaged  premises,  in  cases  in  which 
he  is  personally  liable  for  the  debt  secured  ;  and  if  the  debt  be 
secured  by  the  covenant  or  obligation  of  any  other  person,  the 
plaintiff  may  make  him  a  party  to  the  action,  and  the  court  may 
adjudge  payment  of  the  residue  remaining  unsatisfied  after  a  sale 
against  such  other  person,  and  may  enforce  such  judgment  as  in 
other  cases.     When  judgment  has  been  obtained   on  the  bond, 
note,  or  debt  secured  by  the  mortgage,  in  case  of  any  judgment 
having  been  obtained   subsequent   to   the   property  being   mort- 
gaged, and  prior  to  the  obtaining  judgment  on  the  mortgage  debt, 
the  court  may  order  the  sale  of  the  mortgaged  property  for  the 
satisfaction  of  the  moneys  secured  by  the  mprtgage,  and  may  give 
a  reasonable  extension  of  the  time  when  the  same  is  to  take  place, 
not  exceeding  the  term  of  six  months  from  the  judgment,  and  also 
may  give  a  reasonable  credit  on  the  sale  not  exceeding  the  terra 
of  twelve  months  from  the  sale ;  and  the  mortgagor  is  forever 
barred  and  foreclosed  by  such  sale.     If,  at  any  time  before  such 
sale,  the  mortgagor  tenders  or  pays  to  the  plaintiff  or  his  attor- 
ney, or  to  the  sheriff,  all  the  principal  money  and   interest  se- 
cured by  the  mortgage,  and  also  the  costs  of  suit,  the  sale  does 
not  take  place,  but  the  mortgagee  must  enter  satisfaction  of  the 
mortgage. 

The  sale  must  be  made  in  the  county  where  the  land  lies,  by 
the  sheriff  of  the  county,  who  executes  a  conveyance  to  the  pur- 
chaser, which  is  effectual  to  pass  the  rights  and  interests  of  the 
parties  adjudged  to  be  sold.^     There  is  no  redemption. 

No  mortgagee  is  entitled  to  maintain  any  possessory  action  for 
the  real  estate  mortgaged,  even  after  the  time  allotted  for  the 
payment  of  the  money  secured  by  mortgage  has  elapsed  ;  but 
the  mortgagor  is  still  deemed  owner  of  the  land,  and  the  mort- 
gagee, owner  of  the  money  lent  or  due,  and  is  entitled  to  recover 
satisfaction  for  the  same  out  of  the  land.     On  judgment  being 

'  U.S.  1873,  p.  042,  §  .310.     Trior  to     that  purpose.     Armstrong  y.  Humphreys, 
this  proviftion  tho  sale  inif;ht  hIso  he  made     5  S.  C.  128. 
l>y  a  referee   appointed  l>y  the  court  for 

345 


§  1358.]  STATUTORY    PROVISIONS  RELATING   TO 

obtaimul  in  the  oimvt  of  eonunoii  })l(>;is  on  any  bond,  note,  or  debt, 
secured  by  mortgage  of  real  estate,  it  is  lawful  for  the  court, 
in  case  of  any  judgnuMit  having  been  obtained  subsecjuent  to  the 
property  being  mortgaged,  and  prior  to  the  obtaining  judgment 
in  the  action  hereby  allowed  to  be  commenced,  to  order  the  sale 
of  the  mortgaged  property  for  the  satisfaction  of  the  moneys  se- 
cured by  the  said  mortgage,  and  to  give  a  rei\sonable  extension  of 
the  time  when  the  same  is  to  take  place,  not  exceeding  the  term 
of  six  months  from  the  judgment,  and  also  to  give  a  reasonable 
credit  on  the  sale  of  the  mortgaged  premises,  not  exceeding  the 
term  of  twelve  months  from  the  sale ;  and  the  mortgagor  is  for- 
ever barred  and  foreclosed  by  such  sale  from  his  equity  of  re- 
demption. If,  at  any  time  before  such  sale,  the  mortgagor  shall 
tender  to  or  pay  into  the  hands  of  the  plaintiff  or  his  agent  or 
attorney,  or  to  the  sheriff,  all  the  principal  money  and  interest 
meant  to  be  secured  by  such  mortgage,  and  also  all  the  costs  of 
suit,  the  sale  shall  not  .take  place,  but  the  mortgagee  shall  enter 
satisfaction  on  the  said  mortgage,  and  the  mortgaged  premises 
are  forever  exempt  from  the  said  mortgage.  When  the  same 
lands  are  mortgaged  at  divers  times,  the  debts  meant  to  be  se- 
cured by  such  mortgages  must  be  paid  in  the  order  the  same  are 
recorded. 1 

1358.  Tennessee.2  —  Foreclosure  is  by  bill  in  chancery  and 
sale  under  decree.  The  officer  whose  duty  it  is  to  make  the  sale 
must,  in  the  absence  of  any  special  provision  in  the  decree,  pub- 
lish the  sale  at  least  three  different  times  in  some  newspaper  pub- 
lished in  the  county  where  it  is  to  be  made,  the  first  of  which 
publications  shall  be  at  least  twenty  days  previous  to  the  sale. 
The  publication  is  dispensed  with  when  the  owner  of  the  prop- 
erty so  directs,  or  when  no  newspaper  is  published  in  the  county, 
in  which  cases  notice  is  posted  for  thirty  da^'S  in  at  least  five  of 
the  most  public  places  in  the  county,  one  of  which  must  be  the 
court-house  door,  and  another  the  most  public  place  in  the  civil 
district  where  the  land  lies.  The  advertisement  or  notice  must 
give  the  names  of  the  plaintiff  and  defendant,  or  parties  inter- 
ested, and  describe  the  land  in  brief  terms,  and  mention  the  time 
and  place  of  sale.  A  sale  without  such  notice  is  not  on  that  ac- 
count void  or  voidable  ;  but  the  officer  failing  to  comply  with 
these  provisions  is  guilty  of  a  misdemeanor  and  punishable  accord- 

1  R.  S.  1873,  c.  116,  §§  1-4.  2  Code,  §§  2145-2155. 

346 


FORECLOSURE  AND  REDEMPTION.         [§  1359. 

ingh',  and  is  moreover  liable  to  the  party  injured  for  damages. 
At  any  time  before  ten  in  the  forenoon  on  the  day  of  sale,  the 
owner  of  the  property  may  deliver  to  the  officer  making  the  sale 
a  plan  or  division  of  the  lands,  subscribed  by  him  and  bearing 
date  subsequent  to  the  advertisement,  according  to  which  so  much 
of  the  land  as  maj  be  necessary  to  satisfy  the  debt  and  costs,  and 
no  more,  shall  be  sold.  If  no  such  plan  is  furnished,  the  land 
may  be  sold  without  division.  The  sale  must  be  made  between 
the  hours  of  ten  in  the  forenoon  and  four  in  the  afternoon  of  the 
day  appointed.^ 

The  real  estate  sold  may  be  redeemed  at  any  time  within  two 
years,  unless  upon  application  of  the  complainant  the  court  order 
it  to  be  sold  on  a  credit  of  not  less  than  six  months,  nor  more 
than  two  years,  and  that,  upon  confirmation  by  the  court,  no  right 
of  redemption  shall  exist  in  the  debtor  or  his  creditor,  but  that 
the  title  of  the  purchaser  shall  be  absolute.  This  right  of  re- 
demption extends  to  sales  made  under  a  deed  of  trust  or  mort- 
gage by  virtue  of  a  power,  without  a  judicial  sentence,  provided 
such  right  is  not  expressly  waived  or  surrendered  by  the  deed  or 
mortgage.^  Redemption  is  made  by  paying  the  purchaser  the 
amount  paid  by  him,  with  interest  at  the  rate  of  six  per  cent, 
per  annum,  together  with  all  other  lawful  charges.  If  the  pur- 
chaser is  a  creditor  by  judgment,  decree,  or  acknowledged  by  deed, 
and  within  twenty  days  after  the  sale  makes  an  advance  on  his 
bid,  and  credits  his  debt,  he  may  hold  the  property  subject  to  re- 
demption at  the  price  bid  and  such  advance.  Any  creditor  may 
redeem  in  the  same  manner  by  advancing  at  least  ten  per  cent, 
on  the  sum  bid,  or  crediting  that  amount  on  the  debt  owing  to 
him.'' 

1359.  Texas.  —  Foreclosure  is  by  suit  in  which  judgment  is 
rendered  and  a  sale  ordered.^  The  ordinary  proceeding  for  fore- 
closure is  by  petition  in  the  clerk's  office  of  the  district  court  of 

'  Upon   nny  foreclosure  of  a  niortf,MKe  Tenn.  400.    Before  this  provision  a  waiver 

or  of  a  deed  of  trust  the  court  inny  order  of  redemption  was  not  hindinj;.    Caldwell 

tliat  the  property  be  sold  on  a  credit  of  v.  IJowen,  4  Sneed  (Tenn.),  41!). 

not  less  than  six  month.s  nor  more  than  "  Code,  §§  2124-21.37. 

two  years  ;  that  there  shall  be  no  rijjht  of  *  Power  of  sale  mortga;;os  arc  in  use, 

redemption,  but  the  purchaser's  title  shall  but  the  plaintiff  may  also  foreclose  under 

be  absolute ;  and  that  the  surplus  be  paid  the  statute.     The  power  of  sale  i.s  only  a 

to  the  debtor.      Compiled    Stat.    1871,  §  cumulative  remedy.      Morrison  v.  Bean, 

4489.  15  Tex.  269. 

2  Sec    Chadbourn     v.     Heudergon,  58 

347 


§  1360.]  STATUTORY   PROVISIONS  RELATING   TO 

the  county  wliero  such  laml  or  a  part  of  it  is  situated,  stating  the 
case  and  the  amount  of  the  demaml,  and  describing  the  property 
mortgaged.  Whereupon  the  mortgagor  is  summoned  to  appear  at 
the  next  term  of  the  court,  to  show  cause  why  judgment  should 
not  be  rendered  for  the  sum  due  on  the  mortgage  with  interest 
and  costs.  Judjrment  is  rendered  and  execution  issued  as  in  other 
cases.i  The  judgment  against  other  persons  tlian  executors  or 
administrators  is  that  the  plaintiff  recover  his  debt,  damages,  and 
costs,  and  tliat  an  order  of  sale  issue  to  the  sheriff  of  the  county 
directing  him  to  sell  as  under  execution,  and  if  the  proceeds  be  in- 
sufficient to  pay  the  judgment  and  costs,  further  execution  may 
issue  for  the  balance.^ 

Redemption  may  be  had  until  the  sale,  but  not  afterwards. 
After  the  death  of  the  mortgagor  the  order  of  sale  must  be  ob- 
tained from  the  probate  court.^  The  executor  or  administrator 
is  cited  to  appear  at  the  next  term  of  the  court  to  show  cause.  In- 
stead of  ordering  a  sale  the  court  may  order  payment  to  be  made 
out  of  the  general  assets  if  this  be  beneficial  to  the  estate.  If  one 
joint  mortgagor  or  owner  of  the  equity  be  dead,  the  mortgagee 
must  pursue  his  remedy  against  the  representatives  of  the  de- 
ceased in  the  probate  court,  so  far  as  his  interest  is  concerned, 
and  the  interest  of  the  other  mortgagor,  who  is  living,  must  be 
foreclosed  in  the  ordinary  way  in  the  district  court.^ 

1360.  Utah  Territory.^  There  is  but  one  action  for  the  re- 
covery of  any  debt,  or  the  enforcement  of  any  right  secured  by 
mortgage.  In  such  action  judgment  is  rendered  for  the  amount 
found  due  the  plaintiff,  and  a  decree  is  entered  for  the  sale 
of  the  property  and  the  application  of  the  proceeds  to  the  pay- 
ment of  the  expenses  of  sale,  the  costs  of  suit,  and  the  amount 
due  the  plaintiff.  A  judgment  is  entered  for  any  deficiency  there 
may  be  against  the   mortgagor  and   others  liable  for  the   debt. 

1  Paschal's  Dig.  1873,  arts.  4675,  4676.  order  the  sale,  even  if  the  mortgage  con- 
Sec  as  to  jurisdiction,  Cavenaugh  v.  Peter-  tains  a  power.  This  is  revoked  by  the 
son,  47  Tex.  197.  mortgagee's  death.     Fortson  v.   Caldwell, 

2  lb.  art.  1480.  17   Tex.  627;  Boggess  v.  Lilly,  18  Tex. 
See,  as  to   the  decree  of  sale,  Goss  v.     200;  Buchanan  v.  Monroe,  22  Tex.  542  ; 

Pilgrim,  28  Tex.  267  ;  Bishop  v.  Petty,  Webb  v.  Mallard,  27  Tex.  83  ;  Giddings 

28  Tex.  321.     As  to  form  of  decree,  see  u.  Crosby,  24  Tex.  299.     See  §  1792. 

Kinney  v.  McCleod,  9  Tex.  79,  80.  *  Martin  v.  Harrison,  2  Tex.  458 ;  Bu- 

3  Paschal's  Dig.  1873,  arts.  1329,  5705,  chanan  v.  Monroe,  22  Tex.  542  ;  Wiley  v. 
and  5706 ;  Cannon  v.  McDaniel,  46  Tex.  Pinson,  23  Tex.  486. 

303.   In  such  case  the  probate  court  must        ^  civil  Practice  Act,  1870,  §§  246-248. 

348 


FORECLOSURE  AND  REDEMPTION.  [§  1361. 

Any  surplus  proceeds  of  sale  must  be  paid  to  the  person  entitled 
to  it,  and  in  the  mean  time  deposited  in  court.  When  the  debt  is 
not  all  due,  the  sale  must  cease  as  soon  as  sufficient  property  has 
been  sold  to  satisfy  the  amount  due  ;  and  as  often  as  more  be- 
comes due  for  principal  or  interest,  the  court  may  on  motion 
order  a  further  sale.  But  if  the  property  cannot  be  sold  in  por- 
tions without  injury  to  the  parties,  the  whole  may  be  ordered  to 
be  sold  in  the  first  instance,  and  the  entire  debt  and  costs  paid 
with  a  proper  rebate  of  interest  when  necessary. 

1361.  Vermont.  1  —  Foreclosure  maybe  had  in  equity  under 
general  chancery  jurisdiction.  Whenever  a  decree  shall  have  been 
made  by  the  court  to  foreclose  the  right  in  equity  of  redeeming 
mortgaged  premises,  if  the  premises  are  not  redeemed  agreeably 
to  the  decree,  the  clerk  of  the  court  of  chancery  may  issue  a  writ 
of  possession  to  put  the  complainant  in  possession  of  the  premises, 
which  is  executed  in  the  same  manner,  and  with  the  same  effect, 
as  similar  writs  issued  by  a  court  of  law,  after  judgment  in  an 
action  of  ejectment.  A  petition  in  equity  for  foreclosure  may  be 
made  with  the  same  effect  as  by  bill.^ 

When  the  time  of  redemption  has  expired,  the  decree  in  chan- 
cery or  a  copy  of  it  must  be  recorded  in  the  town  clerk's  office 
where  the  land  is  situated,  within  thirty  days  after  the  expira- 
tion of  the  time  of  redemption.  The  foreclosure  is  not  effectual 
against  subsequent  purchasers,  mortgagees,  or  attaching  creditors, 
unless  the  decree  is  so  recorded,  or  afterwards  left  for  record  be- 
fore they  acquire  any  rights. 

Foreclosure  may  also  be  made  by  action  of  ejectment,^  in  which 
the  court  ascertains  the  sum  equitably  due  to  the  plaintiff  on  the 
mortgage  or  deed  with  defeasance,  and  orders  that  if  the  defendant 
or  his  representatives  shall  pay  or  cause  to  be  paid  the  amount 
then  due  the  plaintiff  with  legal  interest,  to  the  clerk  of  the  court, 

1  G.  8.  1802,   c.  29,   §§  74-79;    c.  40,  taineJ  although  the  statute  of  limitatioua 

§§7-11.     This  is  a  strict  foreclosure.  has  run  a{;ainst  the  debt.     Heed  v.  Shep- 

^  In  hill  or  petition  to  foreclose,  any  ley,  0  Vt.  r)02.  The  note  secured  by  the 
8ubse(iuentattacliing  creditor  may  be  made  mortgage  must  be  produced  ;  and  a  van- 
defendant.     St.  1804,  No.  29.  ance  between   the  note  produced  and  that 

'  G.  S.  1802,  c.  40,  §§  7-11.    This  mode  described  in  the  mortgage  cannot  be  cx- 

of  forcclosuro  is  applicable  only  where  the  plained  by  parol,  as  a  mistake.     Kdgell 

conveyance  is  teclmically  a  mortgage  by  v.  Stanfords,  3  Vt.  202.     But  it  need  not 

deed,  to  be  void  upon  condition,  or  having  be  produced  when  the  mortgagor  has  re- 

a  defeasance  under  seal.     Miller  v.  Ham-  leased   the  equity  in   satisfaction  of    the 

blct,  11  Vt.  499.    The  action  may  be  main-  note.     Marshall  v.  Wood,  5  Vt.  250. 

349 


13G±] 


STATUTORY   PROVISIONS  RELATING   TO 


by  a  time  liiuitotl  by  tlie  court,  not  exceeding  one  year  from  the 
renditimi  of  the  judgnient,  then  such  judgment  shall  be  vacated. 
If  the  debt  is  })ayable  by  instabnents,  a  part  of  which  is  not  due 
at  the  time  the  judgment  is  rendered,  the  court  may  order  and  de- 
cree a  redemption  at  any  future  period,  by  instalments  or  other- 
wise, as  to  the  court  shall  appear  just  and  equitable,  not  more 
than  one  year  after  the  last  instalment  shall  become  due.  If  the 
defendant  pays  within  the  time  limited  by  the  court  the  sums  so 
ordered  to  be  paid,  the  clerk  delivers  to  him  a  certificate  of  pay- 
ment, which  when  recorded  in  the  proper  registry  of  deeds  defeats 
the  mortgage.  If  the  defendant  does  not  pay  as  ordered  by  the 
time  limited,  the  plaintiff  has  his  writ  of  possession  for  the  prem- 
ises recovered,  and  for  his  damages  and  costs,  and  holds  the  prem- 
ises discharged  from  all  right  and  equity  of  redemption.  When 
the  time  of  redemption  has  expired,  the  plaintiff  must  record  in 
the  town  clerk's  office  where  the  land  is  situated,  within  thirty 
days  after  the  expiration  of  the  time  of  redemption,  a  certified 
copy  of  the  record  of  the  suit.  The  foreclosure  is  not  effectual  as 
against  subsequent  purchasers,  mortgagees,  or  attaching  creditors, 
unless  such  record  is  so  recorded  or  afterwards  left  for  record  prior 
to  the  acquiring-  of  any  interest  in  the  lands  by  subsequent  parties.^ 

It  is  held  that  if  the  mortgage  embraces  several  parcels  which 
have  subsequently  been  transferred  to  different  persons  the  mort- 
gage must  be  apportioned  upon  the  land  according  to  their  value, 
and  the  owner  of  each  given  a  time  to  redeem  his  portion,  and 
upon  failure  to  do  so  he  is  foreclosed.  If  neither  of  such  owners 
redeem,  that  is  the  end  of  it.  If  one  redeems  his  portion,  and 
the  others  do  not,  then  the  one  redeeming  must  also  redeem  the 
portion^  of  the  others,  or  forfeit  the  whole  estate,  and  if  he  does 
so  redeem  he  takes  the  whole  estate.^ 

1362.  Virginia.'^  —  Foreclosure  is  under  the  general  jurisdic- 
tion of  courts  of  equity.  Mortgages,  however,  are  now  seldom  or 
never  used  in  this  state,  deeds  of  trust  being  substituted  in  their 
place.*  There  are  no  provisions  of  statute  relating  specificially  to 
the  foreclosure  of  mortgages.  There  are  special  provisions  relat- 
ing to  deeds  of  trust,'^  and  courts  of  equity  may  be  invoked  in 
any  case  to  supervise  the  execution  of  them.^     There  are  general 


1  G.  S.  c.  29,  §§  78,  79. 

2  Gates  V.  Adams,  24  Vt.  70. 

3  Code,  1873,  p.  1122. 

350 


4  Pitzer  V.  Burns,  7  W.  Va.  63,  74. 

^  See  chapter  xxxix. 

«  Miehie  v.  Jeffries,  21  Gratt.  334. 


FORECLOSURE   AND   REDEiMPTION.  [§  1363. 

provisions  relating  to  judicial  sales  which  would  be  applicable  to 
a  foreclosure  sale  under  decree  of  court,  and  to  sales  under  trust 
deeds  when  made  under  direction  of  court.  These  authorize  the 
court  to  direct  the  sale  to  be  made  for  cash,  or  on  such  credit  and 
terms  as  it  may  deem  best ;  and  it  may  appoint  a  commissioner  to 
make  the  sale,  who  must  give  bonds  before  receiving  any  money 
under  the  decree.  When  no  special  commissioner  is  appointed  the 
sherifl:  or  sergeant  may  act.^ 

1363.  Washington  Territory.  —  When  default  is  made  in  the 
performance  of  any  condition  contained  in  a  mortgage,  the  mort- 
gagee or  his  assigns  may  proceed  in  the  district  court  of  the  dis- 
trict or  county  where  the  land  or  some  part  thereof  lies,  to  fore- 
close the  equity  of  redemption.  When  there  is  no  express  agree- 
ment in  the  mortgage,  nor  any  separate  instrument  given  for  the 
payment  of  the  sum  secured  thereby,  the  remedy  is  confined  to 
the  property  mortgaged.  In  rendering  judgment  of  foreclosure 
the  court  orders  the  mortgaged  premises,  or  so  much  thereof  as 
may  be  necessary,  to  be  sold  to  satisfy  the  mortgage  and  cost  of 
the  action.  The  payment  of  the  mortgage  debt,  with  interest  and 
costs,  at  any  time  before  sale,  satisfies  the  judgment.  When  there 
is  an  express  agreement  for  the  payment  of  the  sum  of  money 
secured  contained  in  the  mortgage  or  any  separate  instrument,  the 
court  directs  in  the  order  of  the  sale  that  the  balance  due  on  the 
mortgage,  with  costs  remaining  unsatisfied  after  the  sale,  shall  be 
levied  on  any  property  of  the  mortgage  debtor.  A  copy  of  the 
order  of  sale  and  judgment  is  issued  and  certified  by  the  clerk, 
under  the  seal  of  the  court,  to  the  sheriff,  who  thereupon  proceeds 
to  sell  the  mortgaged  premises,  or  so  much  thereof  as  may  be 
necessary  to  satisfy  the  judgment,  interest,  and  costs,  as  upon  exe- 
cution ;  and  if  any  part  of  the  judgment,  interest,  and  costs  re- 
main unsatisfied,  the  slierilf  forthwitli  proceeds  to  levy  the  residue 
upon  the  property  of  the  defendant.  The  sheriff  indorses  upon 
the  order  of  sale  the;  time  when  he  received  it,  and  all  subse- 
fpient  proceedings  und(;r  tli(i  order  must  conform  to  the  provisions 
regulating  sales  of  property  upon  execution.     A  notice  must  be 

■  All   sales   for  the  pnyment  of  debts  sale  must  be  paid  in  cash.     The  commis- 

contrnrteil,  or  lialiilitics  incurred  prior  to  sioner    cannot    sell   for    less   than    tbrco 

April  10,  1865,  must  be  upon  a  credit  of  fourths  of  the  assessed  value.    Code,  1873, 

not  less  than  three   nor   more   than   six  p.  1123.     The  commis>i(mer  or  officer  is 

equal  instalments  annually  from  the  day  allowed  for  services  5%  on  the;  lirst  $300, 

of  gale,  except  that  the  costs  of  the  suit  and  and  2%  on  all  above  that. 

3')1 


§  1363.]  SIATUTORY    PROVISIONS  RELATING   TO 

posted,  });utu'ulaily  cU'scribing  tlie  property,  for  four  weeks  suc- 
cessively, in  three  public  places  of  the  county  where  the  property 
is  to  be  sold,  and  must  be  published  once  a  week  for  the  same 
period,  in  a  newspaper  of  the  county,  if  there  be  one,  or  if  there 
be  none,  then  in  a  newspaper  published  nearest  to  the  place  of 
sale.  The  pUiintilT  cannot  proceed  to  foreclose  his  mortgage  while 
he  is  prosecuting  any  other  action  for  the  same  debt  or  matter 
which  is  secured  by  the  mortgage,  or  while  he  is  seeking  to  obtain 
execution  of  any  judgment  in  such  other  action  ;  nor  can  he  pros- 
ecute any  other  action  for  the  same  matter  while  he  is  foreclosing 
his  mortgage  or  prosecuting  a  judgment  of  foreclosure.  When- 
ever a  complaint  is  filed  for  the  foreclosure  of  a  mortgage  upon 
which  there  shall  be  due  any  interest  or  instalment  of  the  princi- 
pal, and  there  are  other  instalments  not  due,  if  the  defendant  pay 
into  court  the  principal  and  interest  due,  with  costs,  at  any  time 
before  the  final  judgment,  proceedings  thereon  shall  be  staj^ed, 
subject  to  be  enforced  upon  a  subsequent  default  in  the  payment 
of  any  instalment  of  the  principal  or  interest  thereafter  becoming 
due.  In  the  final  judgment,  the  court  directs  at  what  time  and 
upon  what  default  any  subsequent  execution  shall  issue.  In  such 
cases,  after  final  judgment,  the  court  ascertains  whether  the  prop- 
erty can  be  sold  in  parcels,  and  if  it  can  be  done  without  injury 
to  the  interests  of  the  parties,  the  court  directs  so  much  only  of 
the  premises  to  be  sold  as  may  be  sufficient  to  pay  the  amount 
then  due  on  the  mortgage,  with  costs,  and  the  judgment  remains 
and  may  be  enforced  upon  any  subsequent  default,  unless  the 
amount  due  shall  be  paid  before  execution  of  the  judgment  is 
perfected.  If  the  mortgaged  premises  cannot  be  sold  in  parcels, 
the  court  orders  the  whole  to  be  sold,  and  the  proceeds  of  the  sale 
applied  first  to  the  payment  of  the  principal  due,  interest,  and  costs, 
and  then  to  the  residue  secured  by  the  mortgage  and  not  due ;  and 
if  the  residue  do  not  bear  interest,  a  deduction  is  made  therefrom 
by  discounting  the  legal  interest ;  and  in  all  cases  when  the  pro- 
ceeds of  the  sale  are  more  than  sufiicient  to  pay  the  amount  due 
and  costs,  the  surplus  is  paid  to  the  mortgage  debtor,  his  heirs,  and 
assigns.  In  all  cases  of  foreclosure  where  there  is  a  decree  for  the 
sale  of  the  mortgaged  premises  or  property,  and  a  judgment  over 
for  any  deficiency  remaining  unsatisfied  after  applying  the  pro- 
ceeds of  the  sale  of  mortgaged  property,  further  levy  and  sales 
upon  other  property  of  the  judgment  debtor  may  be  made  under 
352 


FORECLOSUKE    AND    REDEMPTION.       [§§  1364,  1365. 

the  same  order  of  sale.  In  such  sales  it  is  necessary  to  advertise 
notice  for  two  weeks  only  in  a  newspaper  published  in  the  county, 
or  in  the  most  convenient  newspaper  having  a  circulation  in  such 
county.  An  execution  may  issue  as  in  ordinarj^  cases,  either  for 
the  whole  mortgage  debt  or  such  deficiency,  after  applying  the 
proceeds  of  the  sale  of  mortgaged  property.  When,  however,  an 
execution  shall  issue  upon  a  judgment  recovered  for  a  debt  secured 
by  mortgage,  a  schedule  of  the  mortgaged  property,  real  or  per- 
sonal, shall  be  indorsed  upon  such  execution,  and  the  sale  thei*eof 
under  such  order  shall  foreclose  the  equity  of  redemption  or  the 
mortgage  therein.  Judgments  over  for  any  deficiency  remaining 
unsatisfied  after  application  of  the  proceeds  of  sale  of  mortgaged 
property  are  similar  in  all  respects  to  other  judgments  for  the  re- 
covery of  money,  and  may  be  made  a  lien  upon  the  property  of 
the  judgment  debtor  as  other  judgments,  and  the  collection  thereof 
enforced  in  the  same  manner.^ 

1364.  West  Virginia.  —  The  foreclosure  of  mortgages  in  this 
state,  the  same  as  in  Virginia,  is  by  bill  in  chancery;  and  as  is  the 
case  in  that  state,  deeds  of  trust  have  been  generally  substituted 
for  mortgages.^  There  are  no  statutory  provisions  in  regard  to 
enforcing  the  latter ;  though  there  are  such  in  regard  to  sales 
under  deeds  of  trust, ^  which  may  be  made  in  accordance  with 
the  provisions  of  the  deed  and  the  statute  without  the  interven- 
tion of  the  court,  or  may  be  supervised  by  it  in  equity.  All  judi- 
cial sales  may  be  for  cash,  or  on  such  credit  and  terms  as  the  court 
may  deem  best ;  and  it  may  appoint  a  special  commissioner  to 
make  such  sale.  If  no  commissioner  is  appointed  for  the  purpose 
the  shfrifF  or  sergeant  executes  the  decree.* 

1365.  Wisconsin.'' — In  actions  for  the  foreclosure  of  mort- 
gages upon  real  estate,  if  the  phiintifT  recover,  the  court  shall 
render  judgment  of  foreclosure  and  sale  of  the  mortgaged  prem- 
ises. 

The  proceeds  of  every  sale  made  under  such  judgment  are  ap- 
pli(Hl  to  the  discharge  of  the  debt  adjudged  to  be  due,  and  the 
costs  awarded;  and  if  there  be  any  surplus,  it  is  brought  into  court 

'  Laws,   1877,  §§014-021,023,625;  §  mortjraf^e   in   that  instance  was  made  in 

862,  I.I.  2.  New  York. 

'  Pit7XT    r.   Burns,    7    W.    Va.    OT,   74.  "  Soc  chapter  xxxix. 

Only  one   case    relatin^j   to   mortKaKCS  is         *  Code,  p.  7-34. 
found  in  the  reports  of  this  .state,  and  the         '  U.  S.  1878,  c.  135. 
VOL.  M.  23  353 


§  1305.]  STATUTORY    PROVISIONS   RELATING   TO 

iov  tlu'  list'  of  tlu'  (loft'iidiiiit,  or  of  any  person  who  may  be  enti- 
tled tluM-eto,  subject  to  the  order  of  the  court.  If  such  surplus, 
or  iiMv  inirt  thereof,  remain  in  court  for  the  term  of  three  months 
without  being  applied  for,  the  court  directs  the  same  to  be  put  out 
at  interest  for  the  benefit  of  the  defendant,  his  representatives  or 
assis^ns,  to  be  paid  to  them  by  the  order  of  such  court. 

In  all  such  actions,  the  plaintiff  may,  in  his  complaint,  unite 
with  his  claim  for  a  foreclosure  and  sale  a  demand  for  judgment 
for  anv  deiiciency  which  may  remain  due  to  the  plaintifT,  after  sale 
of  the  mortgaged  premises,  against  every  party  who  may  be  per- 
sonally liable  for  the  debt  secured  by  the  mortgage,  whether  the 
mort«'-agor  or  other  persons,  if  upon  the  same  contract  which  the 
mortgage  is  given  to  secure;  and  judgment  of  foreclosure  and  sale, 
and  also  for  any  such  deficiency  remaining  after  applying  the  pro- 
ceeds of  sale  to  the  amount  adjudged  to  be  due  for  principal,  in- 
terest and  costs,  may  in  such  case  be  rendered.  Such  judgment 
for  deficiency  is  ordered  in  the  original  judgment,  and  separately 
rendered  against  the  party  liable,  on  or  after  the  coming  in  and 
confirmation  of  the  report  of  sale,  and  is  docketed  and  enforced 
as  in  other  cases. 

Whenever  there  is  due  any  interest,  or  any  instalment  of  the 
principal,  and  there  be  other  portions  or  instalments  to  become 
due  subsequently,  the  action  is  dismissed  upon  the  defendant's 
bringing  into  court,  at  any  time  before  judgment,  the  principal 
and  interest  due,  with  the  costs.  If  after  judgment  is  entered  the 
defendant  bring  into  court  the  principal  and  interest  due,  with  the 
costs,  proceedings  on  the  judgment  are  stayed  ;  but  the  court  may 
enforce  the  judgment  by  a  further  order  upon  a  subsequent  de- 
fault in  the  payment  of  any  instalment  of  the  principal,  or  of  in- 
terest. The  court,  before  rendering  judgment,  directs  a  reference 
to  some  proper  person,  to  ascertain  and  report  the  situation  of  the 
mortgaged  premises,  and  whether  they  can  be  sold  in  parcels  with- 
out injury  to  the  interests  of  the  parties ;  and  if  it  appear  that  they 
can  be  so  sold,  the  judgment  directs  a  sale  in  parcels,  specifying 
them,  or  so  much  thereof  as  will  be  sufficient  to  pay  the  amount 
then  due  ;  and  such  judgment  remains  as  security  for  any  subse- 
quent default.  If  there  be  any  default  subsequent  to  such  judg- 
ment, the  court  may,  upon  petition  of  the  complainant,  by  a  fur- 
ther order,  founded  upon  such  first  judgment,  direct  a  sale  of  so 
much  of  the  mf)rtgaged  premises  to  be  made  under  the  said  judg- 
354 


FORECLOSURE   AND   REDEMPTION.  [§  1365. 

ment  as  will  be  sufficient  to  satisfy  the  amount  so  due,  with  the 
costs  of  such  petition  and  the  subsequent  proceedings  thereon  ;  and 
the  same  proceedings  are  had  as  often  as  a  default  happens.  If  it 
appear  to  the  court  that  the  mortgaged  premises  are  so  situated 
that  they  cannot  be  sold  in  parcels  without  injury  to  the  interests 
of  the  parties,  or  that  the  sale  of  the  whole  will  be  most  benefi- 
cial to  them,  the  court  may  adjudge  the  sale  of  the  whole  accord- 
ingly, in  which  case  the  proceeds  of  sale,  after  deducting  the  costs 
of  the  action  and  of  sale,  are  applied  to  the  payment  of  the  sums 
then  due  and  also  to  become  due  thereafter;  deducting  from  all 
sums  not  due,  which  do  not  bear  interest,  interest  from  the  time 
of  payment  to  the  time  when  the  same  are  payable  ;  or  the  court 
may  direct  the  balance  of  the  proceeds  of  sale,  after  paying  the 
sum  then  due,  with  such  costs,  to  be  placed  at  interest  for  the  ben- 
efit of  the  plaintiff,  to  be  paid  to  him  as  such  subsequent  instal- 
ments become  due,  with  the  interest  thei-eon. 

The  judgment  fixes  the  amount  of  the  mortgage  debt  then  due, 
and  also  the  amount  of  each  instalment  thereafter  to  grow  due, 
and  the  several  times  when  they  will  become  so  due,  and  ad- 
judges that  the  mortgaged  premises  be  sold  for  the  payment  of 
the  amount  adjudged  to  be  then  due,  and  of  all  instalments  which 
shall  thereafter  grow  due  before  the  sale,  or  so  much  thereof  as 
may  be  sufficient  to  pay  such  amount,  including  costs  of  sale ;  but 
no  such  sale  shall  be  made  until  the  expiration  of  one  year  from 
the  date  of  such  judgment  or  order  of  sale;  and  when  judgment 
is  for  instalments  due  and  to  grow  due,  and  payment  shall  be 
made  within  the  year  of  the  instalments  found  due  at  the  date  of 
the  judgment,  with  interest  and  costs,  no  sale  shall  be  made  upon 
any  instalment  growing  due  after  the  date  of  the  judgment,  until 
the  expiration  of  one  year  after  the  same  shall  become  due ;  but 
in  all  cases  the  parties  may,  by  stipulation  in  writing,  to  be  filed 
with  the  clerk,  consent  to  an  earlier  sale.  These  provisions  do  not 
apply  to  judgments  of  foreclosure  and  sale  of  mortgages  given  by 
any  railroad  corporation  ;  but  such  sales  may  be  made  inmiediately 
after  the  rendition  of  the  judgment. 

If  any  defendant  appear  and  answer  that  any  portion  of  the 
mortgagf'd  premises  is  a  homestead,  the  court  ascertains  whether 
such  be  the  fact,  and  if  so,  wliether  the  part  of  the  mortgaged 
premises,  not  included  in  the  homestead,  can  be  sohl  separately 
then-from   without  injury  to   the  interests  of  the  parties,  and  in 

355 


§  loOf).]  STATUTOUY    PKOVISIONS    KKLATING    TO 

that  e:iso  diivcts  tluit  the  honiostcad  shall  not  be  sold  until  all  the 
otluT  niorlgiiLiji'd  laiuls  have  beiM)  sold. 

Tho  aiiuiunl  adjudi^cil  to  W  diu'  in  tlio  judgment  draws  interest 
at  tho  rate  of  ten  per  cent.  |)er  annum,  from  its  date  until  the 
date  of  sale  or  payment,  and  all  instalments  which  become  due 
after  the  date  of  such  judgment  draw  interest  at  the  same  rate 
from  the  time  the  same  become  due.  The  court  may  also,  in  the 
judgment,  enjoin  the  defendants  and  all  persons  claiming  under 
them  from  committing  any  waste,  or  doing  any  act  that  may  im- 
pair the  value  of  such  premises  at  any  time  after  the  date  of  the 
judgment. 

The  mortgagor,  his  heirs,  personal  representatives,  or  assigns, 
may  redeem  the  mortgaged  premises  from  the  effect  of  said  judg- 
ment, and  the  lien  of  the  mortgage  thereon,  at  any  time  before 
the  sale  of  such  premises,  by  paying  to  the  clerk  of  the  court,  or 
to  the  plaintiff"  therein,  or  any  assignee  thereof,  or  to  his  attorney, 
the  amount  of  such  judgment,  interest  thereon  as  aforesaid,  and 
costs,  and  any  costs  subsequent  to  such  judgment,  and  any  sums 
paid  by  the  plaintiff  subsequent  to  the  judgment,  for  or  in  re- 
demption of  taxes  assessed  upon  the  mortgaged  premises,  with  in- 
terest thereon  from  the  date  of  payment  at  the  same  rate.  On 
payment  to  such  clerk  as  aforesaid,  or  on  filing  the  receipt  of  the 
plaintiff,  or  his  assigns  or  attorney,  for  such  payment,  in  the  office 
of  said  clerk,  he  thereupon  discharges  such  judgment,  and  a  cer- 
tificate of  such  discharge,  duly  recorded  in  the  office  of  the  regis- 
ter of  deeds,  discharges  such  mortgage  of  record,  to  the  extent  of 
the  sum  so  paid. 

In  case  the  mortgagor,  his  heirs,  representatives,  or  assigns  desire 
to  pay  a  portion  of  such  judgment,  taxes,  interest,  and  costs,  so  as 
to  relieve  any  distinct  lot  or  parcel  of  the  premises  which  can  be 
sold  separately  under  such  judgment  from  the  lien  thereof,  and  of 
such  mortgage  thereon,  the  court,  on  application  of  such  person, 
and  on  notice  to  the  parties  to  the  action,  may,  if  the  amount  to 
be  paid  therefor  is  not  agreed  upon,  ascertain  and  adjudge  the 
proportion  of  such  judgment,  taxes,  interest,  and  costs  to  be  paid 
for  the  purpose  aforesaid;  and  when  the  amount  so  adjudged  shall 
be  paid,  it  relieves  such  distinct  lot  or  parcel  from  such  judgment 
and  lien.  Any  heir,  devisee,  grantee,  or  assignee  of  the  mort- 
gagor, owning  an  undivided  interest  in  the  mortgaged  premises, 
subject  to  the  lien  of  the  mortgage,  may  redeem  such  undivided 
356 


FORECLOSURE   AND   REDEMPTION.  [§  1365. 

interest  by  paying  a  sum  that  will  bear  the  same  proportion  to  the 
whole  of  such  judgment,  taxes,  costs,  and  interest  as  the  interest 
proposed  to  be  redeemed  bears  to  the  whole  of  the  mortgaged 
premises. 

Any  person  having  a  lien,  acquired  at  any  time  before  the  sale» 
upon  the  mortgaged  premises,  or  any  part  thereof,  or  interest 
therein,  subsequent  to  the  lien  of  any  such  mortgage,  may  also  at 
any  time  before  such  sale  pay,  as  above  provided,  the  amount 
of  such  judgment,  taxes,  interest  thereon  as  aforesaid,  costs,  and 
any  costs  subsequent  to  such  judgment,  and  thereupon  be  subro- 
gated to  all  the  rights  of  the  plaintiff  as  to  such  judgment,  with 
full  power  to  enforce  the  same,  unless  the  same  shall  have  been 
paid  by  the  mortgagor,  or  person  personally  liable  for  the  mort- 
gage debt. 

The  sheriff  or  referee  who  makes  sale  of  mortgaged  premises 
under  a  judgment  therefor  shall  give  notice  of  the  time  and  place 
of  sale,  in  the  manner  provided  by  law  for  the  sale  of  real  estate 
upon  execution,  or  in  such  other  manner  as  the  court  shall  in  the 
judgment  direct.  He  shall,  within  ten  days  thereafter,  file  with 
the  clerk  of  the  court  a  report  of  the  sale,  and  immediately  after 
the  sale  shall  pay  to  the  parties  entitled  thereto,  or  their  attorneys, 
the  proceeds  of  the  sale,  after  deducting  the  cost  thereof,  unless 
otherwise  ordered  by  court. 

Upon  any  such  sale  being  made,  the  sheriff  or  referee  making 
the  same,  on  compliance  with  its  terms,  shall  make,  execute,  and 
deliver  to  the  purchaser  a  deed  of  the  premises  sold,  setting  forth 
eacli  parcel  of  laud  sold  to  him,  and  the  sum  paid  therefor,  which 
deed,  upon  the  confirmation  of  such  sale,  vests  in  the  purchaser  all 
the  right,  title,  and  interest  of  the  mortgagor,  his  heirs,  personal 
representatives,  and  assigns,  in  and  to  the  premises  sold,  and  is  a 
bar  to  all  claim,  right,  or  equity  of  redemption  therein,  of  and 
against  the  parties  to  such  action,  their  heirs  and  personal  repre- 
sentatives, and  also  against  all  persons  claiming  under  tliem  sub- 
sequent to  the  filing  of  the  notice  of  the  pendency  of  the  action 
in  which  such  judgment  was  rendered  ;  and  the  purchaser  is  let 
into  the  possession  of  the  premises  so  sold,  on  production  of  such 
deed,  or  a  duly  certified  copy,  and  the  court  may,  if  necessary, 
issue  a  writ  of  assistance  to  delivtu*  such  possession.^ 

The  register  of  deeds  shall,  upon  tiie  filing  of  any  Us  pendens 
I  H.  S.  1878,  c.  135. 

357 


§  1300.]  STATUTOUY    PROVISIONS,    KTC. 

for  the  foreclosure  of  a  mortgage,  enter  upon  the  margin  of  tlie 
record  of  such  mortgage  a  memorandum  of  the  iiUng  of  such 
notice  ami  the  date  thereof.' 

1366.  Wyoming  Territory.^  —  Mortgages  are  foreclosed  in 
equity.  In  ai-tions  to  enforce  mortgages,  a  personal  judgment  is 
rendered  for  the  amount  due  with  interest,  and  for  the  sale  of  the 
property  and  the  application  of  the  proceeds,  or  such  application 
may  be  reserved  for  further  order  of  the  court.  When  the  mort- 
gage embraces  separate  tracts  of  land  situated  in  two  or  more 
counties,  the  sheriff  of  each  county  must  make  sale  of  the  lands 
situated  in  the  county  of  which  he  is  sheriff. 

i  R.  S.  1878,  c.  37,  §  76.  2  Compiled  Laws,   1876,    c.    13,  §  381, 

of  the  Civil  Code. 

358 


CHAPTER   XXXI. 

THE   PAKTIES   TO    AN   EQUITABLE   SUIT   FOR   FORECLOSURE. 

PART    I.  I  PART    II. 

0/ parties  plaintiff,  \3&8-\393.  \  Of  parties  defendant,  1394-IU2. 

1367.  General  principles.  —  In  determining  who  are  the 
proper  and  necessary  parties  to  a  bill  to  foreclose  a  mortgage,  two 
fundamental  principles  in  all  proceedings  in  equity  must  be  kept 
in  view :  first,  that  no  one  shall  be  adjudged  as  to  his  rights 
except  he  is  before  the  court  ;  and  second,  that  the  rights  of  all 
persons  interested  in  the  object  of  the  suit  shall  be  provided  for  in 
the  determination  of  it.  It  is  the  constant  aim  of  a  court  of  equity 
to  do  complete  justice  by  deciding  upon  and  settling  the  rights  of 
all  persons  interested  in  the  subject  of  the  suit,  to  make  the  per- 
formance of  the  order  of  the  court  pei'fectly  safe  to  those  who  are 
compelled  to  obey  it,  and  to  prevent  future  litigation.^  It  is  a 
maxim  as  stated  by  Lord  Talbot,  that  "  a  court  of  equity  in  all 
cases  delights  to  do  complete  justice,  and  not  by  halves."  ^  There- 
fore it  is  generally  essential  that  all  persons  materially  interested 
in  the  subject  matter  of  the  suit  shall  be  made  parties  to  it 
either  as  plaintiffs  or  defendants.'^  This  is,  however,  a  general 
statement,  and  as  a  practical  rule  is  subject  to  many  limitations. 
Those  who  are  indirectly  or  consetjuently  interested  in  the 
mortgage  debt  or  in  the  mortgaged  premises  are  not  necessarily 
included  among  the  proper  parties  to  the  suit.  The  interest  in 
the  object  of  the  suit  must  be  apparent  upon  the  record.  When 
it  is  said  that  a  person  materially  interested  should  be  made  a 
party  to  the  suit,  the  materiality  of  the  interest  is  relative  to  the 
cjise  and  to  the  prayer  of    the  bill.     For  instance,  a  mortgagee 

*  IjotA  Rcdesdale's  Pleadings,  164.  Grant,  in  Wilkins  v.  Fry,  1  Mer.  202  ;  per 

'  Knight  o.  Knight,  3  P.  W.  333.  JmuI  Redcsdale,  Pi.  164  ;  per  Lord  Liinj{- 

'   Per     Lord    Eldon,    in     Cotkhurn    t'.  dale,  in   Richardson  v.  Hastings,  7  Beav. 

Thompson,    16    Vcs.   32.0;    per  Sir   Wm.  326. 

369 


I 


§  loliT.]       TAHTIKS   TO    AN    KQI'ITAIUJ'    SUIT    FOR    FORECLOSURE. 

may  pray  for  a  fort'i-losmv  against  llio  mortga«;()r  and  not  against 
a  subsoqiuMit  incuniliranccM-,  in  which  case  such  incumbnincer  is 
not  materially  interested  in  the  object  of  the  suit.  Then,  as  we 
shall  presently  notice  more  fully,  the  interests  which  persons  have 
in  the  debt  and  in  the  equity  of  redemption  may  be  represented 
by  others,  as  by  executors  and  administrators,  and  by  trustees. 
Moreover,  the  suit  may  be  brought  or  defended  by  persons  inter- 
ested on  behalf  of  themselves  and  of  others  ;  as  where  the  number 
18  too  large  to  make  it  practicable  to  bring  all  of  them  before  the 
court.  In  several  other  ways  the  general  rule  founded  upon  in- 
terest is  modified  in  the  practical  application  of  it;  and  tliese 
exceptions  will  appear  under  the  particular  applications  of  the 
rule  to  the  parties  interested  in  the  mortgage  debt  and  property 
to  be  made  in  this  chapter. 

Of  course,  when  neither  party  to  a  mortgage  has  assigned  his 
interest,  or  done  anything  to  affect  it  in  any  way  down  to  the 
time  of  the  bringing  of  the  suit  to  foreclose  it,  the  mortgagor 
and  mortgagee  remain  the  only  parties  to  be  brought  before  the 
court.  But  this  simple  state  of  facts  may  be  changed  to  one  of 
great  complication  by  events  subsequent  to  the  mortgage  ;  and 
the  changes  which  thus  take  place  give  rise  to  a  great  many  ques- 
tions as  to  the  proper  and  necessary  parties  to  a  suit  for  fore- 
closure. 

These  general  principles  of  equity  respecting  the  parties  to  suits 
have  been  embodied  in  the  codes  adopted  in  several  of  the  states, 
and  extended  to  all  actions,  whether  such  as  were  formerly  suits 
in  equity  or  distinctively  suits  at  law.  These  codes  provide  that 
all  persons  having  an  interest  in  the  subject  of  the  action,  or  in 
obtaining  the  relief  demanded,  may  be  joined  as  plaintiffs. ^ 
"  Of  the  parties  to  the  action,  those  who  are  united  in  interest 
must  be  joined  as  plaintiffs  or  defendants  ;  but  if  the  consent  of 
any  one  who  should  have  been  joined  as  plaintiff  cannot  be  ob- 
tained, he  may  be  made  a  defendant,  the  reason  thereof  being 
stated  in  the  complaint.  When  the  question  is  one  of  a  common 
or  general  interest  of  many  persons,  or  when  the  parties  are  very 
numerous,  and  it  may  be  impracticable  to  bring  them  all  before 

I  Pomeroy '8  Remedies,  §  116.  twccn   suits   at   law   and    in    equity,  see 

For  a  statement  of  the  provisions  in  cliapter  xxx ;  and  also  see  Pomeroy's 
several  states  abolishing  all  distinction  be-     llemedies,  §§  28-30,  44. 

360 


WHO   ARE   PROPER    PARTIES.  [§  1368. 

the  court,  one  or  more   may  sue   or  defend  for  the  benefit  of  the 
whole."  ^ 

In  the  same  states  it  is  provided  that  an  executor,  administra- 
tor, trustee  of  an  express  trust,  a  person  with  whom  or  in  whose 
name  a  contract  is  made  for  the  benefit  of  another,  or  a  person 
expressly  authorized  by  statute,  may  bring  an  action  without  join- 
ing with  him  the  person  for  whose  benefit  it  is  prosecuted.^  It  is 
further  provided  that  when  a  complete  determination  of  the  con- 
troversy between  the  parties  before  the  court  cannot  be  had  with- 
out the  presence  of  other  parties,  the  court  must  cause  them  to  be 
brought  in.  A  person  having  an  interest  in  the  subject  of  the 
suit,  and  not  a  party  to  it,  may  be  made  a  party  on  his  own  appli- 
cation.3  These  codes  also  contain  a  few  other  provisions  relative 
to  parties,  generally  recognizing  equitable  rules  already  estab- 
lished, but  which  it  is  not  essential  to  notice  in  this  connection. 


PART    I. 

OF    PARTIES    PLAINTIFF. 

Who  are  the  Proper  Parties. 

1368.  All  those  who  are  interested  in  the  mortgage  debt 
should,  according  to  the  general  principle  already  stated,  join  in 
the  suit  to  enforce  the  security.  If  the  mortgagee  is  the  only 
party  in  interest,  he  is  of  course  the  only  plaintiff.  If  several 
persons  and  even  numerous  persons  are  made  mortgagees,  or  are 
entitled  to  the  mortgage  money,  all  of  them  must  be  parties  to 
the  suit,"*  though  there  are  many  cases  in  which  some  of  the  per- 
sons so  interested  may  properly  be  made  defendants.     The  codes 

1  New  York:  §  119  of  Code.  Kentucky:  §§  .16,  37. 

Ohio  :  §§  30,  37.  North  Carolina :  §  62. 

Indiana:  §19.  South  Carolina :  §142. 

Iowa :  §§  2.')48,  2.549.  Florida  :  §  70. 

Wisconsin:  c.  122,  §  20.  •^  I'ohrtov's  Remedies,  §  115. 

Kansas:  §§  37,38-  »  II).  §  119. 

Nebraska:  §§39,40.  *  Palmer   i-.    Carlisle,    1    S.  &    S.  425. 

Missouri:  Art.  1,  §  6,  without  the  last     Sir  .John  Leach  said  :  "There  can  be  no 

claiiHo.  foreclosure     or    redemption,    unless    the 

Nevada:  §  14.  parties   entitled  to    tlie  whole    mortgage 

Oregon:  §381,  but  limited  to  eiiiiitahle     money  arc  biforc  the  court."     Carpenter 

actions.  V.  O'Dougherty,  2  T.  &  C.  (N.  Y.)  427; 

Califomia:  §  382.  67  Barb.  397  ;  affirmed,  58  N.  Y.  681. 

361 


§  13(>0.]  OF    rARTIKS    rLAlNTIFK. 

of  soYoral  st;it<'s,  ns  jilrcady  iiotii'od,  embody  this  (.'(juitablo  prin- 
ciple, exttMulinL:  it  to  all  actions,  including  such  as  were  foniunly 
distinctively  actions  at  law.  Not  only  joint  ni()rtgag(!cs,  but  also 
persons  having  an  united  interest  in  the  debt  secured,  even  if 
their  interests  be  several,  may  join  as  plaintiffs.^ 

1369.  Joinder  of  plaintiff.  —  It  is  not  very  material,  however, 
in  an  equity  suit,  whether  more  than  one  of  the  persons  interested 
in  prosecuting  it  is  nominally  made  a  plaintiff.  It  is  generally 
sufficient  that  the  persons  to  be  bound  by  the  decree  shall  be 
brought  before  the  court  in  some  capacity.^  When  a  person 
having  an  interest  in  the  security  is  made  a  defendant  in  the  ac- 
tion, the  bill  ought  to  show  his  refusal  to  join  as  a  plaintiff;  but 
this  omission  is  not  material  unless  such  defendant  objects  by 
demurrer.^  If  several  persons  have  rights  and  interests  in  the 
same  demand  and  security,  even  if  these  are  not  strictly  joint, 
and  are  entitletl  to  the  same  relief,  they  should  naturally  join  as 
plaintiffs  in  seeking  it.  But  if  one  of  the  persons  so  interested 
institutes  the  suit,  and  makes  the  others  having  like  interests 
defendants,  the  requirements  of  equity  are  generally  satisfied. 
If  several  persons  have  claims  alike  in  being  antagonistic  to  the 
defendant,  but  several  and  distinct  in  their  nature,  because  they 
have  arisen  out  of  different  events  and  circumstances,  although 
they  may  join  as  co-plaintiffs  in  seeking  the  same  relief,  in  actual 
practice  one  person,  perhaps  by  reason  of  his  greater  interest  or 
more  urgent  occasion  for  relief,  institutes  the  suit  without  ask- 
ing the  cooperation  of  the  others,  making  them  defendants.  And 
finally,  as  no  one  can  be  made  a  plaintiff  against  his  will,  this 
practical  restriction  in  many  cases  determines  the  question  whether 
a  person  shall  be  made  a  plaintiff  or  defendant. 

There  are,  however,  some  decisions  at  variance  with  these  gen- 
erally established  doctrines  in  equity.  Thus,  it  was  held  in  one 
case  that  where  a  mortgage  was  given  to  secure  two  or  more  notes 

1  Story's   Eq.   PI.    §   201;    Pomeroy's  Marsh.   (Ky.)  301  ;  Woodward  v.  Wood, 

Remedies,  §§  116,  117,  183;    Story's  Eq.  19  Ala.  213. 

Pi.  §  201 ;  Lowe  v.  Morgan,  1  Bro.  C.  C.  ^  Wilkins  v.  Fry,  1  Mer.  262,  per  Sir 

368;  Stansfield  v.  Ilobson,  16  Beav.  189;  William  Grant :  "In  equity  it  is  sufficient 

Palmer  v.  Carlisle,  1  S.  &  S.  425  ;  Noyes  that  all  parties  interested  in  the  subject  of 

V.  Sawyer,  3  Vt.  160;  Pogue  v.  Clark,  25  the  suit  should  be  before  the  court,  either 

111.   351 ;    Shirkey    v.  Ilanna,   3  Blackf.  in  the  shape  of  plaintiffs  or  defendants." 

(Ind.)  403;    Stacker  v.  Stuckcr,  3  J.  J.  »  Hancock  v.  Hancock,  22  N.  Y.  568; 

Carpenter  v.  O'Dougberty,  58  N.  Y.  681. 

362 


WHO   ARE  PROPER  PARTIES.  [§§  1370,  1371. 

which  were  transferred  to  different  persons,  the  holders  could  not 
join  in  an  action  to  foreclose  it,  although  a  pro  rata  interest  in 
the  security  was  assigned,  because  the  indebtedness  having  been 
severed  the  demands  were  distinct  and  separate.  The  rights  of 
all  parties  were,  however,  protected  and  determined  in  one  action 
in  which  the  holder  of  one  note  was  made  plaintiff,  and  the  holders 
of  the  others  defendants,  who  answered  in  the  form  of  cross-bills, 
and  had  their  rights  fixed  by  the  decree.^ 

It  is  not  material  that  the  interests  of  the  several  plaintiffs 
should  be  coextensive,  or  that  they  should  have  originated  at  the 
same  time.  Neither  is  the  extent  of  the  interest  material,  if  there 
be  any  interest  at  all ;  nor  whether  it  be  absolute  or  conditional .^ 

1370.  Real  party  in  interest.  —  Moreover  the  codes  of  all 
these  states  provide  that  "  every  action  must  be  prosecuted  in  the 
name  of  the  real  party  in  interest,"  ^  thus  recognizing  another  es- 
tablished principle  of  equity  and  extending  it  to  all  actions.  The 
application  of  this  rule  to  the  question.  Who  can  prosecute  a  suit 
to  foreclose  a  mortgage  ?  is  of  special  service  in  answering  it  in 
the  case  of  an  assignment  of  the  mortgage,  whether  this  be  a  legal 
or  equitable  assignment.  If  the  assignee  be  the  legal  owner  of 
both  the  mortgage  and  the  mortgage  debt,  he  must  of  course  bring 
the  action.  If  he  is  the  equitable  assignee  only,  he  is  still  the 
proper  plaintiff ;  and  generally  the  only  plaintiff  necessary,  though 
by  statute  in  a  few  of  the  states  the  assignor  retaining  the  legal 
title  should  be  joined  either  as  plaintiff  or  defendant. 

A  note  and  mortgage  given  to  secure  an  indebtedness  to  a 
county  made  in  terms  to  the  supervisors  of  such  county  or  their 
successors  in  office,  may  be  declared  upon  as  obligations  to  the 
county,  and  the  suit  may  be  brought  in  the  name  of  the  board  of 
supervisors.* 

1371.  Plaintiff  must  have  some  interest.  —  After  an  absolute 
assignment  the  suit  cannot  be  prosecuted  in  the  mortgagee's  name 
for  the  iise  of  the  assignee.^  The  plaintiff  must  have  either  the 
legal  or  equitable  interest.  If  he  has  not  both  these  interests,  he 
must  make  the  holder  of  the  other  interest  a  party  with  himself ; 

>  Rankin  v.  Mnjor,  9  lowii,  297.     To  '•*  Pomeroy's  Remedies,  §  199. 

like  effect  see  Thiiyer  v.  Campbell,  9  Mo.  «  Pomeroy's  Remedies.  §  1'24. 

280.     Rut  the  court  say  that  tlie  proceed-  ■•  Oconto  County  v.  Hull,  42  Wis.  59. 

ing  to  foreclose  is  one  at  law,  and  is  not  ^  Barra<iue  v.  Manuel,  7  Ark.  516. 
governed  by  the  rules  in  eqtiily. 

.303 


§§  1:>7"J-1;'^71.]  OF  rAUTiF.s  plaintikf. 

if  not  phiinlilY,  tlicti  :is  (U^fiMitliuit.  Tlio  plaintiff  must,  however, 
have  some  inttMcst  (Mtlier  as  mortgagee  or  assignee.^  If  he  lias 
only  a  partial  interest,  the  remeily  given  is  limited  to  the  extent 
of  that  interest.  ThtM-efore  whi're  the  holder  of  two  mortgage 
notes  assigned  one  of  (hem,  and  afterwards  brought  suit  to  fore- 
close the  other,  he  was  not  allowed  to  take  judgment  for  the 
amount  of  the  assi>rned  note  as  well  as  for  that  of  the  note  re- 
tained  by  him,  although  he  was  liable  upon  the  other  note  as  in- 
dorser.- 

1372.  Form  of  assignment  immaterial.  —  It  is  ap{)arcnt, 
therefore,  that  a  formal  legal  assignment  is  not  requisite  in  equity 
to  enable  the  assignee  to  enforce  the  mortgage  in  his  own  name. 
If  he  is  the  real  party  in  interest,  the  form  by  which  he  acquires 
this  interest  is  quite  immaterial.  A  verbal  assignment,  even,  of 
the  bond  and  mortgage  gives  the  assignee  an  equitable  claim  to 
them,  and  eimbles  him  to  bring  an  action  upon  them  in  his  own 
name. 3 

1373.  If  the  mortgage  has  been  assigned  absolutely  and  the 
mortgagee  retains  no  further  interest  in  it,  he  is  not  a  proper  party 
to  the  suit.^  "  It  is  enough  to  make  that  man  a  party  who  has 
contracted  to  stand  in  the  place  of  the  original  mortgagee  and  of 
all  assignees."  ^ 

1374.  A  mortgagee  "who  has  assigned  his  mortgage  as  col- 
lateral security  for  his  own  debt,  but  still  has  an  interest  in  the 
mortgage,  should  be  made  a  party  to  a  suit  by  the  assignee  to 
foreclose  it,  although  the  assignment  be  in  terms  absolute,  and 
recites  the  payment  of  a  full  consideration  for  it.*'  If,  however, 
it  appears  from  the  assignment  that  it  was  the  intention  of  the 
assignor  to  give  the  assignee  the  right  to  foreclose,  or  to  receive 
the  moneys  in  his  own  name,  it  is  unnecessai-y  to  make  the  as- 

1  Bolles  V.  Carli,  12  Minn.  113.  (N.  Y.)  Ch.  144;    Garrett  v.  Puckett,  15 

2  Haynes  I'.  Seachrest,  1.3  Iowa,  455.  Ind.  485;    Walker  v.  Bank  of  .Mobile,  6 
■  Green  v.  Marble,  37   Iowa,  95;  An-     Ala.  452 ;  Newman  v.  Chapman,  2  Rand. 

drews  u.  M'Daniel,  68  N.  C.  385.     This  (Va.)  93. 

last  was  an  unindorsed  note.  ^  Chambers  v.  Goldwin,  9  Ves.  264. 

*  Walker  v.   Smalwood,  2  Arab.  676;  «  Ilobart  v.   Abbot,  2  P.   Wms.   643; 

Gaskell  v.  Durdin,  2  Ba.  &  Be.  167;  Mil-  Gage  v.  Stafford,  1  Ves.  Sen.  544  ;  John- 

ler  y.  Henderson,  10  N.  J.  Eq.  (2  Stockt.)  son  v.  Hart,  3  Johns.  (N.  Y.)  Cas.  322 ; 

320;    Parker  v.  Stevens,  3  N.  J.  Eq.  (2  Whitney  v.  M'Kinney,  7  -Johns.  (N.  Y.) 

Green)  56;  McGuffey  y.  Finiey,  20  Ohio,  Ch.  144;  Kittle  v.  Van  Dyck,   I  Sandf. 

474;  Christie  y.  Herrick,  1  Barb.  (N.  Y.)  (N.  Y.)  Ch.  76. 
Ch.  254;  Whitney  v.  M'Kinney,  7  Johns. 

364 


WHO  ARE  PROPER  PARTIES.  [§  1375. 

signor  a  party,  although  he  retains  an  interest  in  the  mortgage. 
It  was  so  held  where  the  assignment  was  absohite  in  form,  ex- 
cept that  it  stated  that  the  money,  when  collected,  was  to  be  ap- 
plied in  liquidation  of  the  debts  for  which  the  complainant  stood 
security  for  the  assignor.^  It  is  proper,  however,  to  join  both  the 
assignor  and  assignee  as  plaintiffs  in  the  action.^ 

1375.  One  who  holds  the  mortgage  as  a  collateral  security 
for  a  smaller  debt  due  him  from  the  assignor  must  make  the  latter 
a  party  to  the  suit  to  enforce  it,  inasmuch  as  he  is  interested  to 
the  amount  of  the  surplus  above  his  debt.^  This  is  in  accordance 
with  the  general  rule  that  all  who  are  interested  in  the  mortgage 
debt  must  be  made  parties  to  the  foreclosure  suit.  And  if  in 
any  way  the  assignment  of  the  mortgage  be  not  absolute,  and  the 
mortgagee  retains  an  interest  in  the  security,  he  is  a  necessary 
party. "^  Even  if  the  assignment  is  absolute  in  its  terms  and  ex- 
presses the  payment  of  a  full  consideration,  the  mortgagee  should 
still  be  made  a  party  if  the  assignee  is  accountable  to  him  for  any 
part  of  the  proceeds  of  it.^  The  fact  that  he  is  liable  to  account 
does  not,  however,  impair  the  right  of  the  assignee  to  enforce 
collection  of  the  mortgage.*^  This  only  affects  the  amount  for 
which  he  may  have  a  decree.  He  is  the  proper  party  to  insti- 
tute the  proceedings,  having  the  legal  and  apparent  title.^  If  in 
such  case  the  assignee  refuses  to  foreclose  and  the  collateral  char- 
acter of  the  assignment  appears  on  the  face  of  it,  the  assignor 
may  foreclose  in  his  own  name ;  ^  and  it  would  seem  that  his  in- 
terest might  be  established  by  evidence  aside  from  anything  upon 
the  face  of  the  assignment,  so  that  he  might  enforce  the  mortgage 
upon  the  neglect  or  refusal  of  the  assignee  to  do  so,  on  the  same 
principle  by  which  it  is  held  that  a  verbal  assignment  of  a  bond 
and  mortgage  entitles  the  assignee  to  sue  in  his  own  name.^  In 
such  case    the    assignee    may  be    made  a   party   defendant,  and 

1  Christie  i;.  Ilcrrick,   1  Barb.  (N.  Y.)         »  Overall  v.  Ellis,  32  Mo.  322. 

Ch.  254.  ^  McKiiincy  v.   Miller,    19  Mich.   142; 

2  lloyt  V.  Miirtcrise,  16  N.  Y.  231.  Norton  i-.  Wftrner,3  Edw.  (N.  Y.)  Ch.  106. 
8  WoodrufFf.  Dcpue,  14  N.J.  Eq.  168,         «  Simson  v.   Saitcrlee,  6  Hun  (N.  Y.), 

176.  30.');  Norton  v.  Warner,  sujini ;    fSinking 

*  Miller  v.  Henderson,  2  Stockt.  (N.  .1.)  Fund  Commissioners  i\  Northern  Bank  of 

320.  Kentucky,  1  Mete.  (Ky.)  174. 

6  Kittle  i;.  Van  Uyvk,  1  Sandf.  (N.  Y.)  »  Sec  §  1377. 

Ch.  76. 

365 


§§  lo7G-lo78.]  OF    TAKTIKS    I'LAlNTll-F. 

noillii'i-  tlu'  mortgagor  nor  any  person  ollu'r  than  tlio  assignee  him- 
self can  object.^ 

1376.  The  assignee  of  a  mortgage  without  the  bond  or 
note  secured  by  it  has  no  interrst  in  it  as  against  a  subsequent 
assiirueo  of  both  and  eannot  foreeh)se  it.'*^  Tlie  debt  is  the  ijrin- 
cipal  thing,  anil  the  mortgage  only  the  incident.  The  assignment 
of  the  mortgage  by  delivery  merely  does  not  carry  with  it  the 
bond  or  note,  and  is  not  conclusive  evidence  of  an  intention  to 
pass  it;  although  generally  the  mortgage  passes  by  a  transfer  of 
the  bond  or  note  so  as  to  make  an  equitable  transfer  of  the  mort- 
gage- 

1377.  Assignee  of  mortgage  note.  —  In  most  of  the  states 
the  doctrine  prevails  that  the  mortgage  debt  is  the  essential  fact, 
and  the  mortgage  itself  a  mere  incident  of  it ;  and  as  a  conse- 
quence that  a  transfer  of  the  note  or  other  evidence  of  the  debt 
carries  with  it  the  security  without  a  special  assignment  of  it.  In 
those  states,  therefore,  a  suit  to  foreclose  the  mortgage  may  be 
brought  by  the  assignee  without  making  the  mortgagee  who  as- 
signed it  a  party .^  The  holder  of  the  mortgage  without  the  debt 
has  no  interest  in  it.  The  equitable  assignee  may,  however,  join 
the  assignor  with  him  in  the  suit,*  or  make  him  a  defendant.^ 
Even  where  the  assignment  of  the  note  is  held  not  to  be  an  assign- 
ment of  the  mortgage,  it  has  been  held  nevertheless  that  the  as- 
signee of  the  note  acquires  an  equitable  interest  which  a  court  of 
equity  will  protect,  though  all  parties,  whether  having  equitable 
or  legal  interests,  must  be  parties  to  the  suit.^  Under  the  prac- 
tice in  some  states,  the  assignee  of  the  note  in  such  case  may  sue 
in  the  name  of  the  mortgagee,  even  against  his  consent,  on  giving 
him  j)roper  indemnity  against  costs.^ 

1378.  The  holder  of  one  of  several  notes  secured  by  the 
same  mortgage  may  proceed  in  the  first  instance  to  foreclose  by 
suit  in  equity  without  suing  at  law  ;  but  all  the  other  mortgagees 
or  holders  of  notes  secured  by  it  must  be  brought  before  the  court 

1  Simson  i-.  Sattcrlee,  C  Ilun  (N.Y.)  305.         *  Ilolddrige  v.  Sweet,  23  Ind.  118. 

2  CooiKjr  V.  Newland,  17  Abb.  (N.  Y.)  6  Burton  v.  Ba.\ter,  7  Blackf.  (Ind.) 
Pr.  342  ;  Merritt  v.  Bartholick,  47  Barb.     297  ;  Stone  v.  Locke,  46  Me.  445. 

(N.  Y.)  253.  «  iMoore  v.  Ware,  38  Me.  496  ;  Stone  v. 

*  Gower  v.  Howe,  20  Ind.  396  ;  Garrett  Locke,  sujira. 

r.  Puckett,  15  Ind.  485;  Austin   v.   Bur-  "^  Culhoun    v.    TuUass,    35    Ga.    119; 

bank,  2  Day  (Conn.),  476 ;  BriggH  v.  llan-  English  v.  Kegister,  7  Ga.  387. 
nowald,  35  Mich.  474. 

306 


WHO    ARE   PROPER    PARTIES.  [§§  1379,  1380. 

as  defendants  before  a  decree  is  made.^  There  are  as  many  causes 
of  action  as  there  are  separate  notes  in  the  hands  of  different  per- 
sons. Two  holders  of  notes  cannot  join  as  plaintiffs  to  enforce  the 
mortgage.  There  is  no  community  of  intei-est  between  such 
holders,  but  rather  an  antagonism.  Only  one  such  holder  can  be 
plaintiff,  and  he  must  make  the  other  holders  defendants,  so  that 
the  amounts  and  priorities  of  their  several  liens  may  be  deter- 
mined.2  The  plaintiff's  allegation,  that  another  note  secured  by 
the  mortgage  may  be  presumed  from  lapse  of  time  and  other  cir- 
cumstances to  have  been  paid,  is  insufficient  to  excuse  his  not 
making  the  assignee  of  it  a  party  to  the  suit.^ 

1379.  A  partner  who  holds  a  mortgage  as  security  for  a  debt 
due  the  partnership  should  join  the  other  partners  with  him  as 
plaintiffs  in  an  action  to  foreclose  it.* 

1380.  A  surety  of  a  debt  secured  by  mortgage  on  lands  of  the 
principal  on  paying  the  debt  is  subrogated  in  equity  to  the  rights 
of  the  mortgagee,  and  may  foreclose  in  his  own  name  without  an 
assignment  of  the  mortgage  and  bond.^  In  like  manner  a  pur- 
chaser who  has  assumed  the  payment  of  a  mortgage  on  land  which 
he  has  subsequently  sold  to  another,  who  in  turn  has  assumed  the 
mortgage,  but  lias  failed  to  pay  it,  may  upon  being  obliged  to  pay 
it  foreclose  it  in  his  own  name  without  having  an  assignment  of 
it.^  And  a  person  interested  in  the  land  subject  to  the  mort- 
gage, though  not  personally  bound  to  pay  it,  upon  doing  so  for 
his  own  protection  has  the  same  right.'  It  is  even  held  that  with- 
out paying  the  debt  a  surety  may  file  a  bill  to  foreclose  the  mort- 
gage, making  the  mortgagee  a  party,  and  asking  for  judgment 
against  the  persons  primarily  liable.^ 

1  Goodall  V.  Mopley,  45  Ind.  355  ;  Stan-  ^^  Ellsworth  i;.  Lockwood,  42  N.  Y.  89  ; 

ley  V.  Beatty,4  Ind.  1.34  ;  Mci-ritt  v.  Wells,  Halsey  v.  Heed,  9  Paige  (N.  Y.),  446. 

18  Ind.  171  ;    Rankin  i'.  Major,  9  Iowa,  «  McLean  v.  Towle,  3   Sandf.   (N.   Y.) 

297  ;  Myers  v.  Wright,  33  III.  284 ;  Poguc  Ch.  117  ;  Tice  v.  Anniu,  2  Johns.  (N.  Y.) 

y.  Clark,  25  111.  351  ;  Wilson  v.  Hay  ward,  Ch.  125;  Cherry  v.  Monro,  2  Barb.   (N. 

2  Fla.  27  ;  Wiley  i'.  Pinson,  23  Tex.  486  ;  Y.)  Ch.  618;  Ferris  v.  Crawford,  2  Den. 

Hartwell  t\  Blocker,  6  Ala.  S**!  ;  Johnson  (N.  Y.)  595;   Johnson   v.   Zink,  52  Barb. 

V.  Brown,  1 1  Fo.st   (N.  II.)  405  ;  Pcttibonc  (N.  Y.)  390  ;  Brewer  v.  Staples,  3  Sandf. 

V.  Edwards,  15  Wis.  95  ;  Jenkins  v.  Smith,  (N.  Y.)  Ch.  579. 

4  Mete.  (Ky,)  380.  '  F<llsworth  v.  Lockwood,  sxy^ra;   Avcr- 

'  Swcn-on    r.    .Molinc    Plough    Co.    14  ill  r.  Taylor,  8  N.  Y.  44. 

KnnH.  387.  "  Miirwh  v.   Pike,  1  Sandf.  (N.  Y.)  Ch. 

»  Bell  V.  Shrock,  2  B.  Mon.  (Ky.)  29.  210  ;   K)  Paige,  595  ;  M.Lcnii  r.  Lafayette, 

*  Noyes  v.  Sawyer,  3  Vt.  160.  3  McLean,  587. 

307 


§§  lo8l-lo83.]  OV    I'AIMIKS    IM-AINIIKI'. 

1381.  Joint  mortgagees. —  Wlu'iv  one  ttl'  two  joint  mortgagees 
has  beci>MU'  (lie  owium-  of  tlic  (Hiuily  of  redemption,  tlie  otluu*  can 
maintain  against  liiin  a  bill  lor  loreelo-siire  to  tiie  extent  of  his  in- 
terest.^ In  like  manner  a  note  antl  mortgage  given  by  thirteen 
persons  to  three  of  their  luiiuber  may  be  foreclosed  for  ten  thir- 
teenths of  the  debt,  by  a  suit  in  which  the  three  join  as  plaintiil's 
against  the  others  as  defendants.'*^  A  mortgagee  of  an  undivided 
interest  may  foreclose  that  interest,  although  he  is  the  owner  of 
the  other  undivided  part  of  the  land  ;  ^  or  although  a  suit  for  par- 
tition is  pending.'*  A  mortgagee  is  not  prevented  from  foreclosing 
by  reason  of  being  one  of  the  trustees  who  hold  the  equity  of 
redemption  ;  he  may  bring  the  action  against  his  co-trustees  ;^  or 
one  of  several  executors  holding  the  estate  ;  he  may  as  mortgagee 
foreclose  his  mortgage  upon  it  against  his  co-executors.*' 

1382.  When  a  mortgage  secures  an  indebtedness  due  to  the 
mortgagees  jointly,  their  interest  in  the  estate  so  far  partakes 
of  the  nature  of  the  debt  that  the  doctrine  of  survivorship  applies, 
and  the  suit  to  foreclose  may  be  brought  in  the  name  of  the  sur- 
vivor without  making  the  heir  or  personal  representatives  of  the 
deceased  mortgagee  a  party."  If  there  are  conflicting  claims  as 
to  the  mortgage  money,  the  executor  of  tlie  deceased  mortgagor 
should  be  made  a  defendant.^  The  survivor  of  joint  assignees  of 
a  mortgage  of  course  has  the  same  right  to  foreclose,  without 
joining  the  personal  representatives  of  the  deceased  assignee,  that 
the  survivor  of  joint  mortgagees  has.^ 

If,  however,  the  money  equitably  belonged  to  the  mortgagees 
severally,  the  representatives  of  one  of  the  deceased  mortgagees 
should  be  joined  with  the  survivor. i*' 

1383.  It  is  a  general  rule  that  a  nominal  trustee  cannot 
bring  the  suit  in  his  own  name  alone,  but  nmst  join  with  him  the 
names  of  those  persons  who  have  the  beneficial  interest.^^     But 

1   Siinford  V.  Bulkley,  30  Conn.  344.  Martin  v.  McReynolds,  6  Mich.  70;  Lan- 

'•i  McDowell  V.  .Jacobs,  10  Cal.  387.  nay   v.   Wilson,  30  Md.    536  ;    Milroy  v. 

MJaker  f.  Shephard,  30  Ga.  706.  Stockwell,   1    Cart.   (Inil.)  3.5;    Erwin  w. 

♦  Gleises  v.  Mni;;nan.  3  La.  530.  Ferguson,  5  Ala.  158;  McAllister?;.  Plant, 

6  Paton  r.  Murray,   6  Paige  (N.  Y.),  54  Miss.  106. 

474.  »  Freeman  v.  Scofield,  16  N.  J.  Eq.  26. 

6  McGregor  u.  McGregor,  35  N.  Y.  218;  «  Martin  v.  McReynolds.  6  Mich.  70. 

Lawrence  v.  Lawrence,  3  Barb.  (N.  Y.)  i»  Vickers  v.  Cowell,  1  Beav.  529. 

Ch.  71.  "  Davis    V.    Hemingway,  29  Vt.  438  ; 

1  Williams    v.    Hilton,    35    Me.    547 ;  Stillwell  v.  McNeely,    1    Green's  (N.  J.) 

Blake  v.   Sanborn,  8  Gray  (Mass.),  154;  Ch.  305;    Freeman  v.   Scofield,   16  N.  J. 

368 


WHO    ARE    PROPER    PARTIES.  [§§  1384,  1385. 

where,  on  account  of  the  number  of  the  persons  interested,  great 
inconvenience  and  expense  would  be  incurred  in  joining  them  in 
the  bill,  the  court  will  in  its  discretion  dispense  with  a  strict  ad- 
herence to  this  rule.i  Accordingly  where  a  mortgage  was  made 
to  a  banker  as  "the  agent  and  trustee  of  the  several  subscrib- 
ers to  the  loan,"  which  was  of  large  amount,  it  was  held  that 
the  mortgagee  might  file  the  bill  in  his  own  name  alone.^  And 
where  a  bill  is  brought  by  the  trustees  of  a  mortgage  by  a  rail- 
road company  to  foreclose  the  mortgage,  the  holders  of  the  bonds 
secured  are  not  necessary  or  proper  parties  complainant,  though 
there  may  be  circumstances  which  would  authorize  the  court  to 
admit  any  of  them  as  defendants  on  their  own  application.^ 

If,  however,  the  only  object  of  the  foreclosure  suit  is  to  reduce 
the  property  into  possession,  it  is  not  necessary  to  make  the  cestui 
que  trust  a  party  to  it.* 

1384.  If  a  cestui  que  trust  brings  a  bill  to  foreclose,  the 
trustee  is  an  indispensable  party,  because  it  is  more  particularly 
the  legal  estate  that  is  affected  by  the  decree  of  foreclosure  and 
sale,  and  in  case  of  redemption  the  trustee  is  the  one  to  release 
the  property.  The  trustee  and  the  beneficiary  should  unite  as 
plaintiffs.'^ 

1385.  A  holder  of  bonds  secured  by  a  mortgage  may  file  a 
bill  to  foreclose  in  behalf  of  himself  and  the  other  bondhold- 
ers, whose  rights  the  court  will  protect,  though  they  be  not  made 
parties  and  do  not  appear.^  This  is  in  accordance  with  the  equi- 
table principles  already  stated,  and  adopted  in  the  several  codes, 
that  one  or  more  of  many  persons  having  a  common  interest,  or  of 
j)ersons  so  numei'ous  as  to  render  it  impracticable  to  bring  them 
all  before  the  court,  may  sue  in  behalf  of  the  whole. 

Eq.  28;  WoodniflT  v.  Depue,  14  N.  J.  Eq.  *  ^ill  v.  Ketchuni,  Ilnrr.  (Mich.)    Ch. 

168,  176;    Large  v.  Van  Doren,  14  N.  J.  423. 

E(|.  208.  '-  Story  £([.  PI.  §§  201,  209;  Wood  v. 

'  Bardstown,  &c.  R.  R.  Co.  v.  Metcalfe,  Williams,  4  Madd;  180  ;  Hichcns  v.  Kelly, 

4  Mete.  (Ky.)  199;  Swift  v.   Stcbbins,  4  2  Sin.  &  G.  264;  Martin  v.  McRcyiioids, 

Stew.    &    Port.    (Ala.)   447 ;    Wrif,'lit   v.  6  Mich.  70. 

Bundy,  11  Ind.  398.  «  Mason  v.  York,  &c.  R.  R.  Co.  52  Me. 

2  Willink  V.  Morris  Canal  &  Banking  82  ;  Coe  v.  Beckwith,  10  Abh.  (N.  Y.)  Pr. 

Co.  3  Green's  Ch.  (N.  J.)  377.  290;  Reid  v.  The   Evergreens,  21    How. 

»  Williamson   i'.  N.  .J.  Sonthern  R.  R.  (N.  Y.)  Pr.  319.     Sec  Blair  v.  Shelby  Co. 

Co,   25  N.  ,1.  Ch.  13;  McElrath  v.  Pitts-  Agr.  Soc.  28  lud.   175;   Bardstown,  &c. 

burg  &  Sfciibcnvillc  R.  R.  Co.  08  Pa.  St.  R,  R.  Co.  v.  Metcalf,  supra. 
37.     See  Joues  on    Railroad    Securities, 
§§  431-437. 

VOL.  11.                           21  369 


le 


§§  1880-1388.]  01-'    I'ARTIKS    I'LAINTIKF. 

1386.  Trustee  for  creditors.  —  Another  exception  to  tl 
gener.il  r\\\v  is  iikkIc  in  the  ciise  of  :i  trustee  of  ;i  fund, -for  the 
InMiefit  of  (MVilitors,  who  may  generally  sue  without  bringing  the 
creditors  before  the  court. ^  In  many  cases  it  would  be  impossible 
to  make  all  the  creditors  parties,  as  where  they  are  not  designated 
except  as  a  person's  creditors. 

1387.  Upon  the  death  of  the  mortgagee  the  right  of  .action 
upon  the  mortgage  securities  is  in  his  executor  or  administrator, 
and  not  in  the  heir  of  the  mortgagee."-^  The  land  is  regarded  as 
merely  a  security  for  the  money  and  not  as  real  estate  absolutely 
vested  in  the  mortgagee,  and  which  upon  his  death  goe^^  to  his 
heir,  although  this  was  the  view  formerly  taken.^  The  entry  of 
the  mortgagee  after  forfeiture  does  not  make  the  mortgage  prop- 
erty his  real  estate.  Until  foreclosure  is  complete  th(^\lal(id  be- 
longs to  the  mortgagor.  Neither  does  the  absence  of  any  personal 
obligation  by  bond,  note,  or  covenant  for  the  debt  affect  tl'ie' right 
of  the  personal  representative  to  collect  the  money '  due.;  by  the 
mortgage.  The  heir  of  the  mortgagee  holds  the  legal  title  in  trust 
for  the  personal  representative.  '■       .^      •>  • ' 

Of  course  the  mortgagee  may,  by  his  will  or  otherwise,  provide 
that  the  mortgage  security  shall  go  to  his  heir  as  devisee ;  and 
then  the  right  of  the  heir  to  sue  rests  upon  the  authority,  so  given. 
One  to  whom  a  specific  mortgage  is  bequ.eatlied  for.  life  may 
maintain  a  bill  to  foreclose  it,  although  thei;t}-be'ji  ifiirther  bequest 
over  to  another  of  the  remainder  after  the  death  of  the  first  taker.* 
Such  immediate  legatee  is  entitled  to  the  possession  of  the  securi- 
ties, and  as  well  to  the  possession  of  the  proceeds  of  the  same  upon 
collection.  It  is  necessary  that  such  holder  of  securities  should 
have  the  authority  to  convert  them  into  "money  in  order  to  obtain 
the  income  and  protect  the  property  frdm'loss.^ 

1388.  The  personal  representative  of  the  mortgagee  upon 

1  Morley   v.    Morley,    25    Beav.    253;         Maryland :  Code,  1860,  art.  64,  §  20. 
Kni(,'ht  V.  Pocock,  24  Beav.  436;  Thomas         Maine:  Rev.  Stat.  1871,  c.  90,  §  1. 
V.  Dunning,  5  De  G.  &  S.  618;  Christie        jOhio;  K.  S.  (S.  &  C.)  c.  43,  §66. 

V.  Herrick,  1  Barh.  (N.  Y.)  Ch.  254.  ^,.  Wisconsin:  Rev.  Stat.  1871,  p.  1223. 

2  It  itj  provided  by  statute  in  several  Vermont:  Gen.  Stat.  1870,  p.  393,  §§  27, 
states  that  upon  the  death  of  a  holder  of     28. 

a  mortgage  without  having  foreelosed  the  »  St.  John  v.   Grabham  (11   Car.  1),  2 

equity  of  redemption,  the  mortgage  is  per-  Ch.  Ca.  88;  Noy  v.  Ellis,  2  Ch.  Ca.  220. 

eonal  assets  in  the  hands  of  his  executor  *  Proctor  v.  Robinson,  35  Mich.  284. 

or  administrator.  ^  Sutphen  i'.  Ellis,  35  Mich.  445. 
Michigan :  Compiled  Laws,  1871,  p.  1393. 
370 


WHO   ARE   PROPER   PARTIES.  [§  1389. 

the  death  of  the  latter  is  the  proper  party  to  bring  an  action  to 
foreclose  the  mortgage,  this  being  personal  assets.  His  heirs  can- 
not maintain  the  bill ;  nor  can  his  devisee  or  legatee. ^  Formerly 
it  was  held  that  the  heirs  should  be  joined,  because,  if  the  mort- 
gagor should  redeem,  there  would  be  no  one  before  the  court  by 
whom  an  effectual  conveyance  of  the  legal  estate  could  be  made.^ 
But  in  this  country  the  heir  has  been  held  a  necessary  party  in 
only  two  or  three  states.^  All  the  administrators  or  executors 
who  have  qualified  should  join  in  the  suit.^ 

When,  however,  the  heir  of  the  mortgagee  is  in  possession  of 
the  premises,  the  personal  representative  should  make  him  a  party, 
either  plaintiff  or  defendant.^ 

1389.  A  foreign  executor  or  administrator  must  receive  ap- 
pointment from  the  proper  court  in  the  state  where  the  mortgaged 
land  is  situate,  before  he  will  be  allowed  to  prosecute  a  suit  to 
foreclose  the  mortgage.^  Tlie  legal  objection  to  allowing  a  foreign 
executor  or  administrator  to  prosecute  such  suit  is  that  better  pro- 
tection is  afforded  to  creditors  of  the  deceased  resident  in  the 
state  where  the  property  is  situated,  by  requiring  an  appointment 
under  the  laws  of  that  state,  and  thereby  making  the  represent- 
ative of  the  deceased  liable  to  account  in  that  state  for  the  assets 
there  collected  by  him ;  so  that  creditors  and  others  in  such  state 
are  not  obliged  to  go  to  a  foreign  jurisdiction  to  prosecute  their 
claims.^ 

Another  practical  advantage  of  the  requirement  is,  that  by  such 
appointment  in  the  state  where  the  property  is  situated  evidence 
of  the  authority  of  the  personal  representative  to  act  in  place  of 
the  deceased  mortgagee,  and  to  make  discharge  of  the  mortgage, 
is  to  be  found  in  that  state  ;  and  this  alone  is  sufficient  ground  for 
requiring  such  appointment  in  every  case,  even  when  voluntary 

•  Kinna  v.  Smith,  3  N.  J.  Eq.  (2  Green)  *  I  Daniells   Ch.  Ft.-  p.  226  ;  Diwies  v. 

U  i  Buck  V.  Fischer,  2  Colo.  182  ;  Roath  Williams,  1  Sim.  .■). 

V.  Smith,  5  Conn.  133  ;  Uatliff  v.   Davis,  &  Huggins  v.   Hall,    10  Aln.  283 ;  Os- 

38  Miss.  107  ;  (Jrattan  i;.  Wiggins,  23  Cal.  borne  i-.  Tunis,  25  N.  J.  L.  (1  Dutch.)  633. 

16.  •■'  Trecothick  v.   Austin,  4   Mason,   16, 

-  Powell  Mortg. 'J70;  Wood  i'.  Williams,  33;  Williams  v.   Storrs,  6  Johns.  (N.  Y.) 

4  Madrl.  185;  Worthington  f.  Tvcc,  2Bland  Ch.  353  ;  Brown  r.  Brown,   1   Barb.  (N. 

Ch.  (Md.)  678.  Y.)  Ch.  189. 

»  Mclver  v.  Cherry,  8  Humph.  (Tunn.)  ''  Peterson  v.  Chemical  Bank,  32  N.  Y. 

713;    Atchison    v.    Surguine.    1    Yergcr,  21,  43 ;  S.  C.  29  How.  Pr.  LMO. 
(Tenn.)  400  ;  Ethcridge  i;.  Vernoy,  71  N. 
C.  184,  187. 

371 


^■§  1:.VJ0,  loiU.]  OF   TARTIES    PLAINTIFF. 

jiavment  of  the  mortgage  is  to  be  made ;  or  when  an  assignee,  res- 
ident in  the  state,  claims  payment  by  virtue  of  an  assignment  to 
him  by  a  foreign  executor  or  administrator  ;  for  although  such 
assi'i^nee  can  prosecute  an  action  to  foreclose  the  mortgage,^  the 
record  title  to  the  estate  made  through  such  foreclosure  is  objec- 
tionable, inasmuch  as  there  is  no  evidence  in  the  state  of  the  au- 
thority by  which  the  foreign  executor  or  administrator  made  the 
assicrnment.^ 

Objection  that  the  foreign  executor  or  administrator  has  no 
standing  in  court  to  enforce  the  mortgage  must  be  made  by  de- 
murrer or  answer,  or  it  will  be  deemed  to  have  been  waived.^ 

1390.  Mortgage  to  executor.  —  A  mortgage  made  to  A.  B., 
"■  acting  executor  of  the  estate  of  T.  T.,  deceased,"  is  primd  facie  , 
the  private  property  of  A.  B.,  and  upon  his  decease  a  bill  to  fore- 
close it  should  be  brought  by  his  personal  representative  ;  but  if 
it  be  alleged  in  the  bill  and  shown  that  the  mortgage  is  part  of  the 
assets  of  the  estate  of  T.  T.,  an  administrator  with  the  will  an- 
nexed of  his  estate  may  foreclose  it.*  The  personal  representa- 
tives of  A.  B.  should  be  made  parties  to  the  suit,  because  primd 
facie  the  security  vests  in  them.^ 

1391.  When  one  person  holds  two  mortgages  upon  the 
same  premises,  he  is  not  allowed  to  bring  separate  foreclosure 
suits.^  If  they  are  of  different  dates  and  secure  different  debts, 
when  the  decree  is  for  a  sale  of  the  property,  it  should  direct  the 
payment  of  the  first  mortgage  out  of  the  proceeds  of  sale,  and  that 
the  residue  be  paid  into  court  for  the  benefit  of  subsequent  incum- 
brancers.^ In  case  of  a  strict  foreclosure,  one  decree  is  made  em- 
bracing both  mortgage  debts,  instead  of  two  decrees  each  limiting 
a  time  of  redemption  for  each  mortgage.^  The  holder  of  the  two 
mortgages   may  foreclose  them  in  one  suit,  although  they  were 

1  Peterson  v.  Chemical  Bank,  32  N.  Y.  selyea,  4  Abb.  (N.  Y.)  Pr.  280;  affirmed 
21,  43  ;  and  see   Smith  v.  "Webb,  1  Barb.     5  lb.  346. 

(N.  Y.)  230,  that  a  legatee  under  a  will         ^  Peck  v.  Mallams,  supra. 

proved  in  another  state  may  sue.  "  Roosevelt  v.  Ellithorp,  10  Paige   (N. 

2  See  §  797.  Y.),  415  ;  Newman  v.  Ogden,  6  Ch.  Dec. 

*  MoBride  v.  Farmers'  Bank  of  Salem,  (N.  Y.)  40 ;  Kellogg  v.  Babcock,  1  Ch.  Dec. 
26  N.  Y.  4.57  ;  Zabriskie  v.  Smith,  13  N.  (N.  Y.)  47  ;  Fitzhugh  v.  McPherson,  3  Gill 
Y.  322.  (Md.),  408. 

*  Peck  V.  Mallams,  10  N.  Y.  509  ;  People  "  Kellogg  v.  Babcock,  supra. 

V.  Keyser,  28  N.  Y.  226;  Kcnaud  v.  Con-         ^  phelps  v.  Ellsworth,  3  Day  (Conn.), 


397. 


372 


WHO   ARE   PROPER   PARTIES.  [§§  1392,  1393. 

given  by  different  persons  but  to  secure  the  same  debt.^  Where 
there  are  several  simultaneous  mortgages  of  the  same  property, 
though  they  secure  different  debts,  one  not  entitled  to  a  prefer- 
ence over  the  others  cannot  be  foreclosed  alone.  The  complainant 
should  ask  the  other  mortgagees  to  join  with  him  in  foreclosing 
all  the  mortgages,  and  on  their  refusal  so  to  do  should  make  them 
defendants.^ 

1392.  A  mortgage  executed  to  persons  in  an  official  capac- 
ity ma}"  be  foreclosed  by  their  successors  in  the  office  in  their  own 
names  as  equitable  assignees  of  the  security  ;  as  in  case  of  a  mort- 
gage given  to  the  receivers  of  an  insolvent  corporation.  The  suc- 
cessor is  in  such  case  an  equitable  assignee,  and  though  he  could 
not  sue  in  his  own  name  at  law  he  may  do  so  in  equity.^ 

If  the  mortgagee  becomes  bankrupt,  his  assignee  may  foreclose 
the  mortgage  without  joining  him  as  a  party.  Though  there  be  a 
possibility  that  there  may  be  property  more  than  enough  to  pay 
the  creditors,  the  presumption  from  the  adjudication  is  that  there 
will  not  be  ;  and  therefore  he  is  not  regarded  as  having  any  in- 
terest sufficient  to  entitle  him  to  be  made  a  party.  And  such 
would  be  the  case  also  where  a  corporation  holding  a  mortgage 
has  been  declared  insolvent,  and  its  property  placed  in  the  hands 
of  a  receiver.'* 

1393.  A  wife  owning  a  mortgage  as  her  separate  property- 
can  not  join  her  husband  as  a  co-plaintii?  to  foreclose  it.  Objec- 
tion, however,  to  the  joining  of  the  husband  should  be  taken  by 
demurrer,  and  cannot  be  insisted  upon  at  the  hearing.^  When 
the  note  and  mortgage  were  given  to  a  husband  and  wife  as  se- 
curity for  money  loaned  by  the  wife,  upon  the  death  of  the  hus- 
band the  wife  was  held  to  be  the  proper  party  to  sue  in  her  own 
name,  on  either  of  two  grounds, —  as  surviving  mortgagee,  or  be- 
cause the  mortgage  concerned  her  separate  estate.^ 

1  McGowan  v.  Branch  Bank  at  Mobile,         »  Iglehart  l-.  Bierce,  30  111.  133. 
7  Ala.  823.  *  iKleliart  v.  Bierce,  supra. 

»  Potter  V.  Crandall,  Clarke  (N.  Y.)  Ch.         ^  Bartlett  v.  Boyd,  34  Vt.  2.'J6. 
119.  0  Shockley  v.  Shockley,  20  Ind.  108. 

373 


§  1394.]  OF   PARTIES   DEFENDANT. 


TAUT  II. 
OF    TAKTIKS    DKFICNDANT. 

^\llo  are  the  Necessary  or  Proper  Parties. 

1394.  General  principles.  —  In  respect  to  the  defendants  in 
foreclosure  suits  they  are  either  necessary  or  proper  parties.^  A 
necessary  party  is  one  whose  presence  before  the  court  is  indis- 
pensable to  the  rendering  of  a  judgment  which  shall  have  any 
effect  u])on  the  property  ;  without  whom  the  court  might  prop- 
erly refuse  to  proceed,  because  its  decree  would  be  practically 
nugatory.  The  person  who  in  this  sense  is  a  necessary  party  de- 
fendant is  the  owner  of  the  equity  of  redemption  ;  but  the  owner- 
ship of  the  land  subject  to  the  mortgage  may  be  distributed 
among  several  persons,  one  of  whom  is  no  more  necessary  to  the 
rendering  of  an  effectual  judgment  than  another.  Moreover  the 
equity  of  redemption  may  have  been  conveyed  again  and  more 
than  once  in  mortgage,  and  the  person  who  holds  the  title  subject 
to  the  mortgages  may  have  an  interest  which  is  in  fact  of  no  value, 
while  the  holders  of  the  subsequent  mortgages  have  valuable  in- 
terests ;  yet  according  to  the  cases  the  owner  of  the  unconditional 
title  which  is  of  no  value  is  a  necessary  party,  and  the  subsequent 
mortgagees  are  only  proper  parties.  It  is  not,  however,  the  value 
of  the  interest  held  by  any  one  which  in  any  way  determines 
whether  he  is  a  necessary  party  or  not ;  for  although  the  interest 
of  the  owner  of  the  equity  may  be  valueless,  yet  a  decree  of  fore- 
closure and  sale  is  effectual  in  cutting  off  that  interest,  and  in 
transferring  the  title  subject  to  the  rights  of  subsequent  incum- 
brancers, if  they  have  not  been  made  parties.  The  decree  is  at 
any  rate  effectual  in  stopping  the  further  transfer  or  incumbrance 
of  the  title,  and  this  is  doubtless  the  reason  why  the  owner  of  the 
equity  of  redemption  is  regarded  as  a  necessary  party. 

In  one  sense  every  person  who  has  acquired  any  interest  in  the 
property  subsequent  to  the  mortgage  is  a  necessary  party  to  the 
suit  for  foreclosure  ;  whether  that  interest  be  by  way  of  a  mort- 

1  The  codes  of  the  several  states  before  plaintiff,  or  who  is  a  necessary  party  to 
mentioned  provide  that  "  any  person  may  a  complete  determination  or  settlement  of 
be  made  a  defendant  who  has  or  claims  an  the  questions  involved  therein."  See  Pom- 
interest  in  the  controversy  adverse  to  the  eroy's  liemedies,  §  271. 

374 


WHO   ARE  NECESSARY    OR   PROPER   PARTIES.  [§  1395. 

gage  or  judgment  lien,  an  inchoate  fight  of  tenancy  in  dower  or 
curtesy,  or  an  unconditional  estate  in  fee  ;  because  in  order  to 
make  the  foreclosure  complete,  and  to  transfer  a  perfect  title  by 
the  sale,  it  is  necessary  that  the  holder  of  every  such  right  or  in- 
terest should  be  brought  before  the  court.  A  party  may  be  nec- 
essary in  this  sense,  although  this  term  has  generally  been  used 
only  to  designate  the  present  owner  of  the  property,  without 
whom  the  general  ownership  of  the  property  cannot  be  trans- 
ferred by  a  sale  under  the  decree.  It  is  doubtless  for  this  reason 
that  there  is  much  confusion  in  the  cases  as  to  the  persons  who 
are  necessary  parties  to  the  suit.  As  a  practical  matter,  however, 
the  distinction  between  necessary  and  proper  parties  is  not  of 
much  consequence  ;  for  the  suit,  though  effectual  in  cutting  off 
the  estate  or  interest  of  the  parties  to  it,  is  generally  ineffectual 
as  a  foreclosure,  unless  every  interest  subsequent  to  the  mortgage 
is  cut  off  by  the  decree  and  sale  under  it ;  for  if  a  stranger  pur- 
chases, he  may  decline  to  take  the  title,  if  any  Hen  or  right  is  left 
outstanding ;  and  if  the  mortgagee  himself  buys,  he  only  subjects 
himself  in  such  case  to  the  expense  of  another  suit,  to  get  rid  of 
the  rights  that  others  still  have  in  the  property. 

To  obtain  a  judgment  for  any  deficiency  there  may  be  after  the 
sale,  the  debtor  and  any  other  person  who  may  have  assumed  the 
debt  are  necessary  parties  ;  but  as  the  primary  object  of  the  suit 
is  to  divest  the  title  of  the  holder  of  the  equity  of  redemption, 
and  of  others  interested  in  it,  and  to  transfer  this  by  sale  to  a 
purchaser,  the  fact  that  one  is  personally  liable  for  the  debt 
makes  him  a  proper  party,  but  not  in  the  general  use  of  the  term 
a  nt'cessary  one. 

1396.  When  a  party  in  interest,  other  than  the  owner  of 
the  equity  of  redemption,  is  not  made  a  party  to  the  bill,  the 
foieclosure  is  not  generally  for  this  reason  wholly  void.  It  is  ef- 
fectual as  against  those  persons  interested  in  the  equity  who  are 
made  parties.  The  sale  vests  the  estate  in  the  purchaser,  subject 
to  re(|(Mii|)tion  by  the  owner  of  the  equity,  or  other  person  inter- 
ested in  it,  who  was  not  made  a  party  to  the  proceedings.^     His 

>  Story's  Eq.  Pli-iidinKS,  §  193;    Mat-  111.428;  Dunlap  v.  Wilson,  32  111.  517; 

calm  V.  Smith,  6  McLean,  416  ;  Martin  v.  Rriulley  v.  Snyder,  14  111.  263  ;  Frisclio  v. 

Noble,  29  Ind.  216  ;  Kelnour  i;.  Wood,  64  Kramer,   17    Oliio,  12.') ;    Hall   ?'.  Hall,  11 

111.345;  OhlinK  i-.   Liiitjens,   32   111.   23;  Tex.  526  ;  Webb  d.  Maxan,  1 1   Tex.  686; 

Cutter  V.   JoncH,  52   111.   85  ;    Hod(;en    v.  Tallman  v.  Ely,  6  Wis.  244  ;   Ilodson   t;. 

Guttery,  58  111.  431  ;    Strang  v.  Allen,  44  Treat,  7  Wis.  263;  Porter  v.  Kilgorc,  32 

375 


§  1305.] 


OF   PARTIKS    DKFF.NDANT. 


only  roiueily,  however,  is  to  reJccm.  He  cannot  maintain  eject- 
ment against  the  purchaser.  lie  cannot  have  the  sale  set  aside 
by  intervening  by  petition  in  the  foreclosure  suit.  His  only  right 
is  the  right  of  redemption. ^  The  sale,  though  it  fails  to  be  effect- 
ual in  every  other  respect,  operates  as  an  assignment  of  the  mort- 
gage and  all  the  mortgagee's  rights  to  the  purchaser,  who  may 
proceed  dc  novo  to  foreclose.^  If  in  such  case  the  prior  mortgagee 
himself  purchases  at  the  sale,  he  becomes  merely  a  mortgagee  in 
possession.^ 

It  is  in  many  cases  a  matter  of  much  expense  and  inconven- 
ience to  join  jis  parties  all  the  subsequent  incumbrancers  ;  but  it 
is  much  more  expensive  and  inconvenient  to  omit  any.  A  pur- 
chaser will  hardly  take  an  estate  which  may  be  redeemed,  and 
thus  incur  the  liability  of  a  suit  to  redeem,  and  of  being  called 
upon   to  account.*     Of  course,  it  is  the  right  of  the  plaintiff  to 


Iowa,  379  ;  Douglass  v.  Bishop,  27  Iowa, 
214  ;  Veach  v.  Schaup,  3  Iowa,  194  ;  Val- 
entine I'.  Havener,  20  Mo.  133;  Brundred 
V.  Walker,  12  N.  J.  Eq.  140;  McCall  v. 
Yard,  3  Stockt.  (N.  J.)  58;  S.  C.  1  lb. 
358  ;  Vanhorn  v.  Duckworth,  7  Ired.  (N. 
C.)  Eq.  261  ;   Hartley  v.  Maier,  13  Cal.  13. 

1  Person  v.  Merrick,  5  Wis.  231 ;  Good- 
man V.  White  26  Conn.  317;  Thompson 
I'.  Chandler,  7  Me.  377 ;  Bradley  v.  Sny- 
der, 14  111.  263;  Benedict  v.  Oilman,  4 
Paige  (N.  Y.),  58;  Farwell  v.  Murphy, 
2  Wis.  533;  Green  v.  Dixon,  9  Wis.  532; 
McCall  f.  Yard,  7  N.  J.  Eq.  (1  Stockt.) 
358 ;  Pcabody  v.  Roberts,  47  Barb.  (N.  Y.) 
91 ;  Brainard  v.  Cooper,  10  N.  Y.  (6  Seld.) 
356;  Redfield  v.  Hart,  12  Iowa,  355; 
Knowles  v.  Rablin,  20  Iowa,  10;  Heiin- 
street  v.  Winnie,  10  Iowa,  430;  Cooper  v. 
Martin,  1  Dana  (Kv.),  23. 

2  Peabody  v.  Roberts,  47  Barb.  91  ;  An- 
son V.  Anson,  20  Iowa,  55  ;  Ten  Eyck  v. 
Casad,  15  Iowa,  524. 

3  Walsh  1-.  Rutgers  F.  Ins.  Co.  13  Abb. 
(N.  Y.)  Pr.  33;  Vanderkemp  v.  Shelton, 
11  Paige  (N.  Y.),  28. 

*  In  the  earlier  cases  in  England  the 
distinction  between  parties  indispensable 
to  the  suit,  and  proper  jiarties  to  it,  was 
not  always  taken.  In  Bishop  of  Win- 
chester V.  Beavor,  3  Ves.  .Jun.  314,  it  was 
objected  by  the  second   mortgagees,  who 

376 


were  parties  to  a  suit  for  the  foreclosure  of 
a  first  mortgage,  that  a  judgment  creditor 
was  not  joined.  At  first  the  Master  of  the 
Rolls,  afterwards  Lord  Alvanley,  inclined 
against  the  objection  ;  "  stating  the  incon- 
venience that  would  arise  from  the  neces- 
sity of  making  all  the  judgment  creditors 
of  the  mortgagor  parties.  After  argument 
he  said:  "  The  usual  and  common  prac- 
tice, almost  without  exception,  is  to  make 
ail  incumbrancers  parties.  If  I  lay  down 
that  it  is  absolutely  necessary,  I  arm  a 
man  with  a  shield  to  ward  off  a  foreclos- 
ure. But  the  question  is,  whether  it  is  not 
proper  in  this  case.  I  think  it  would  be 
too  much  to  refuse  it.  Where  there  is 
no  affectation  of  delay,  that  I  can  see,  I 
do  not  think  the  general  point  so  clear  as 
to  determine  it  upon  this  case.  I  hope  the 
court  is  not  bound  to  insist  upon  all  in- 
cumbrancers being  parties  ;  but  I  am  per- 
fectly satisfied  that  in  this  case  it  is  by 
much  the  least  evil  to  order  the  cause  to 
stand  over  till  this  single  incumbrancer  is 
made  a  party."  Mr.  Calvert,  in  his  Trea- 
tise on  Parties,  p.  186,  says  :  "  The  general 
practice  will  not  of  necessity  bind  a  mort- 
gagee, who  for  particular  reasons,  such  as 
co.sts  and  the  small  value  of  the  security, 
desires  to  exclude  from  the  record  partic- 
ular mortgagees.  There  is  no  rule  to  the 
effect  that  there  shall  be  only  one  foreclos- 


WHO  ARE  NECESSARY  OR  PROPER  PARTIES.     [§  1396. 


bring  all  subsequent  parties  in  interest  before  the  court ;  but  as 
the  law  now  stands  it  is  not  his  absolute  duty  to  do  so  ;  or  in 
other  words,  the  court  will  not  compel  the  plaintiff,  on  the  motion 
of  any  other  party,  to  bring  in  those  who  have  subsequent  liens, 
however  desirable  it  may  be  to  make  a  final  settlement  of  the 
rights  of  all  persons  interested  in  the  property. 

1396.  All  parties  in  interest  should  be  joined,  inasmuch  as 
it  is  true  the  proper  object  of  a  bill  in  equity  to  foreclose  a  mort- 
gage is  to  cut  off  all  rights  subsequent  to  the  mortgage.^  The 
rights  of  any  one  so  interested  not  made  a  party  to  the  bill  are 
not  affected  by  the  decree  of  foreclosure  and  the  sale  under  it, 
but  he  may  redeem  as  before  the  sale.^  The  proceeding  is  not 
in  rem,  but  in  personam. 


ure  bill  of  the  same  estate,  for  there  may, 
according  to  the  acknowledged  practice, 
be  as  many  foreclosures  as  there  are  mort- 
gagees ;  provided  the  suits  are  filed  in  a 
series  commencing  with  the  last  mortgagee. 
It  is  said  that  a  mortgagor  ought  not  to 
be  liable  to  successive  suits  ;  yet  he  will  be 
if  the  suits  were  instituted  in  that  series." 
1  Bloomer  v.  Sturges,  58  N.  Y.  168; 
Kay  i;.  Whittaker,  44  N.  Y.  565 ;  McGown 
V.  Yerks,  6  Johns.  (N.  Y.)  Ch.  450;  Ens- 
worth  V.  Lambert,  4  Johns.  (N.  Y.)  Ch. 
605;  Smith  v.  Chapman,  4  Conn.  344; 
Vandcrkemp  v.  Shelton,  11  Paige  (N.  Y.), 
28;  Haines  v.  Beach,  3  Johns.  (N.  Y.) 
Ch.  459 ;  Judson  v.  Emanuel,  1  Ala. 
598  ;  Swift  v.  Judson,  5  Conn.  531  ;  Good- 
man V.  White,  26  Conn.  322;  Chase  v. 
Abbott,  20  Iowa,  1.54;  Wright  v.  Howell, 
35  Iowa,  288  ;  Manufacturing  Co.  v.  Price, 
4  S.  C.  338  ;  M'Call  i-.  Yard,  3  Stockt. 
N.  J.  58 ;  Caldwell  v.  Taggart,  4  Pet.  190  ; 
Hayward  v.  Stearns,  39  Cal.  58;  Besser  v. 
Hawthorne,  3  Oregon,  129;  Armstrong  v. 
Pratt,  2  Wis.  299  ;  Rowley  v.  Williams,  5 
Wis.  151  ;  Moore  i-.  Cord,  14  Wis.  213; 
Stark  V.  Brown,  12  Wis.  572  ;.  Hunt  v. 
Acre,  28  Ala.  580;  Boykin  v.  Rain,  28 
Ala.  332;  Doc  v.  Mcl.oskfij',  1  Ala.  708; 
Gaincx  v.  Walker,  16  Ind.  361  ;  Proctor  v. 
Baker,  15  Ind.  178;  Martin  v.  Noble,  29 
Ind.  216;  Holmes  r.  Byliec,  34  Ind.  262; 
Hassclman  v.  McKernan,  50  Ind.  441  ; 
Coombs  V.  Carr,  55  Ind.  303. 


2  Cockes  V.  Sherman,  2  Freem.  14 
(1676).  Here  were  five  mortgages  of  the 
same  land.  The  fifth  mortgagee  bought 
the  first  three  mortgages,  and  then  fore- 
closed without  making  the  fourth  mort- 
gagee a  party.  Lord  Chancellor  Finch 
held  that  the  fourth  mortgagee  had  an 
equity  of  redemption.  "  The  fourth  mort- 
gagee was  not  concluded  by  this  decree, 
being  never  made  a  party  to  it ;  and 
although  there  be  a  great  mischief  on  one 
hand  that  a  mortgagee,  after  a  decree 
against  the  mortgagor  to  foreclose  him  of 
his  equity  of  redemption,  shall  never  know 
when  to  be  at  rest ;  for  if  there  be  any 
other  incumbrances  he  is  still  liable  to  an 
account;  yet  the  inconvenience  is  far 
greater  on  the  other  side,  for  if  a  mort- 
gagee, that  is  a  stranger  to  this  decree, 
should  be  concluded,  he  would  be  abso- 
lutely without  remedy  and  lose  his  whole 
money,  when  perhaps  a  decree  may  be 
huddled  up  purposely  to  cheat  him,  and 
in  the  mean  time  (he  being  paid  his  inter- 
est) may  be  lulled  asleep,  and  think  nothing 
of  it;  whereas,  on  the  other  hand,  there  ia 
no  prejudice  but  being  liable  to  the  trouble 
of  an  account;  and  if  so  be  that  were 
stated  honnjide  between  the  mortgagor  and 
mortgagee  in  the  suit  wherein  the  decrco 
was  obtained,  that  shall  be  no  more  rav- 
elled into,  but  so  long  shall  stand  un- 
touched." 

377 


§§  1307,  1308.]  OF   PARTIF.S   DEFKNDANT. 

1397.  Trustees  and  beneficiaries.  —  As  a  genenil  rulo,  all  p(n-- 
sons  boneficiallv  interestoil  in  the  equity  of  redemption  should  be 
made  parties  to  the  suit  as  well  as  the  trustees  who  hold  the  legal 
title.  Thev  have  an  interest  in  the  controvesy  adverse  to  the 
plaintitY.^  This  was  the  English  rule  until  it  was  enacted  ^  that 
the  trustees  may  represent  the  persons  beneficially  interested,  so 
that  the  latter  need  not  be  made  parties  to  the  suit,  unless  the 
court  in  its  discretion  orders  them  to  be  joined.  Under  this  stat- 
ute, however,  it  seems  that  the  court  will  require  that  the  cestuis 
que  trust  be  made  parties  where  the  trustees  have  not  complete 
power  over  the  estate,  or  have  not  in  their  control  funds  applica- 
ble to  the  purpose  of  redemption.^  Under  this  general  rule  per- 
sons having  a  vested  remainder  in  fee  in  the  equity  of  redemption 
should  be  made  parties  to  the  bill,  though  the  trustee  is  made  a 
defendant ;  and  the  fact  that  the  trustee  executed  the  mortgage 
under  authority  of  the  court  does  not  excuse  omitting  them.* 

1398.  When  beneficiaries  are  numerous.  —  Although  as  a 
general  rule  a  nominal  trustee  cannot  be  made  a  defendant  alone 
without  joining  with  iiim  his  ce.stuis  que  trust,  this  rule  will  not  be 
adhered  to  when  great  inconvenience  or  expense  would  be  incurred 
by  making  them  parties.  In  a  case  where  the  trustee  represented 
two  hundred  and  fifty  owners  or  subscribers,  it  was  held  that  he 
sufficiently  represented  them  as  defendant ;  ^  and  so  trustees  who 
represented  a  large  number  of  bondholders  under  a  second  mort- 
gage were  held  to  be  the  only  defendants  required  in  a  suit  to  fore- 
close a  prior  mortgage.^     This  exception  to  the  rule  applies  also 

1  Coles  V.  Forrest,  10  Beav.  552;  Cal-  der  v.  Morris,  1  Sm.  &  Gif.  503.  Sec, 
verier  i'.  Phelp,  Madd.  &  G.  229  ;  Tylec  v.  also,  Youiik  v.  Ward,  10  Hare,  lix  ;  Siff- 
Webb,  6  Beav.  557  ;  Goldsmid  v.  Stone-  ken  v.  Davis,  Kay,  xxi ;  Cropper  v.  Mel- 
hewer,  9  Hare,  App.  xxxix  ;  17  Jur.  199  ;  lash,  1  Jnr.  N.  S.  299. 

Newton  v.  Earl  Ejrmont,  4  Sim.  574  ;    5  *  Williamson  v.  Field,  2  Saudf.  (N.  Y.) 

lb.  130  ;  Union  Bank  at  Massillon  v.  Bell,  Ch.  .5.33. 

14  Ohio  St.  200;  Mavrich  v.  Grier,  3  ^  Van  Vechten  v.  Terry,  2  Johns.  (N. 
Nev.  52,  57  ;  Delaplaine  v.  Lewis,  19  Wis.  Y.)  Ch.  197.  Chancellor  Kent  said  :  "  It 
476;  Johnson  r.  Bobcrtson,  31  Md.  491;  would  be  intolerably  oppressive  and  bur- 
Williamson  V.  Field,  2  Sandf.  (N.  Y.)  Ch.  densome  to  compel  the  plaintiffs  to  bring 
533  ;  Kinf,'  v.  McVickar,  3  Sandf.  (N.  Y.)  in  all  the  cestuis  que  trust.  The  delay  and 
Ch.  192 ;  Lef,'gett  i-.  Mut.  Life  Ins.  Co.  64  the  expense  incident  to  such  a  proceeding 
Barb.  (N.  Y.)  23 ;  Kawson  v.  Lampman,  5  would  be  a  reflection  on  the  justice  of  the 
N.  Y.  456  ;  Nodihe  v.  Greenfield,  7  Paige  the  court." 
(N.  Y.),  544.  "  N.J.  Franklinite  Co.  v.  Ames,  1  Beas. 

2  15  &  16  Vict.  c.  86,  §  42.  (N.  J.)  507. 
8  Goldsmid  v.  Stonehewer,  supra;  Tu- 

378 


WHO   ARE   NECESSARY   OR   PROPER   PARTIES.       [§§  1399-1401. 

where  the  mortgaged  property  is  held  in  trust  for  numerous  ered- 
itors.i  i^i^e  plaintiff,  however,  should  state  distinctly  and  par- 
ticularly the  grounds  on  which  he  omits  to  make  the  creditors  or 
other  persons  interested  in  the  matter  in  controversy  parties  to  the 
suit.2  Even  a  selected  number  of  creditors  may  sufficiently  repre- 
sent the  whole  number  ;  but  in  such  case  the  trustees  should  be 
made  parties  for  the  protection  of  the  interests  of  the  whole  body 
of  creditors.^ 

1399.  Trustee.  —  It  has  been  held  in  some  cases,  however, 
that  as  the  trustee  and  cestui  que  trust  really  represent  but  one 
interest,  and  the  trustee  is  the  holder  of  the  legal  interest,  he 
alone  should  be  made  a  party  to  the  suit,  as  he  would  be  the 
pai'ty  entitled  to  redeem.  This  is  especially  the  case  where  the 
trust  is  for  the  benefit  of  creditors.* 

1400.  Equitable  interest.  —  A  person  having  an  equitable  in- 
terest in  the  mortgaged  premises  by  reason  of  having  advanced 
money  for  erecting  buildings  thereon,  and  who  by  agreement  with 
the  owner  entered  into  possession  of  the  premises  before  the  mak- 
ing of  the  mortgage,  and  continued  in  possession  down  to  the  time 
of  the  sale  of  them  under  foreclosure  suit,  should  be  made  a  party 
to  the  proceedings  ;  otherwise  his  rights  will  not  be  ban-ed.  His 
continued  possession  is  constructive  notice  of  his  equitable  rights.^ 
A  person  having  only  a  remote  or  contingent  interest,  without 
any  estate  or  lien,  may  properly  be  made  a  party ."^ 

1401.  Remainder-men.  —  When  there  are  estates  in  remainder 

1  Willis  y.  Henderson,  4  Scam.  (111.)  13  ;  kind  are  conducted:  and  when,  in  conse- 

and  see  Swift  v.  Stebbins,  4  Stew.  &  Port,  qucnce  of  the  mode  in  which  the  affairs  of 

(Ala.)  447.  mankind  are  conducted  ;  and  when,  in  con- 

•  Holland  v.  Baker,  3  Hare,  68.  sequence  of  the  mode  of  dealing,  it  would 

8  Holland  v.  Baker,    su/ua;    Wigram,  be  impossible   to  work  out  justice  if  the 

v.  C,  in  this  case  said  :  "  I  do  not  doubt  rule  requiring  all   persons  to  be  present 

that  the  court  docs  allow  a  selected  num-  were  not  departed  from,  it  must  be  relaxed 

ber  to  represent  a  numerous  i)ody  of  de-  rather  than  be  allowed  to  staud  as  an  ob- 

fendants,  whose  interests  are  sought  to  be  struction  to  justice." 

adversely  atTcctcd  in  a  suit.     Lord  Eldon  *  Grant  v.  Duane,  9  Johns.  (N.  Y.)  .'J91, 

rei>eatcdly  said  it  might  be   done,  if  the  012  ;  Willis  r.  Henderson,  5  111.  (4  Scam.) 

puqwses  of  justice  required  it ;  and  Lord  13;  Paschal's  Dig.  of  Decis.   (Texas)  §§ 

Cottenham,  in  Attwood  i;.  Small  (not  re-  IS.'iSi,  IS.'j.SS. 

ported,  but  see  4  Myl.  &  C.  635),  after  say-  <*  De  Iluytcr  v.  Trustees  of  St.  Peter's 
ing  that  the  right  course  was  to  bring  all  Church,  2  Barb.  (N.  Y.)  Ch.  5.5.'). 
parties    Ijcfore   the   court,  observed,   that  •>  Johnson  v.  Britton,  23  Ind.  lO.'i;  Par- 
courts  of  justice  are  bound  to  have  regard  rott  v.  Hughes,  10  Iowa,  45'J. 
to  the  mode  in  which  the  affairs  of  man- 

379 


§  1402.]  OF    TARTIES   DEFENDANT. 

or  reversion  after  a  life  estate  in  the  equity  of  redemption,  it  is 
generally  sufficient  to  bring  before  the  court  the  first  person  in 
being  who  has  a  vestetl  estate  of  inheritance,  together  with  those 
claiming  the  life  estate,  and  omitting  any  who  may  claim  a  rever- 
sion after  such  vested  estate.^  Those  having  merely  future  con- 
tingent interests  are  not  necessary  parties,  if  the  person  who  has 
the  first  estate  of  inheritance  is  before  the  court.  If  the  estate  is 
entailed,  it  is  suifieient  to  make  the  first  tenant  in  tail  in  esse  a 
party  if  there  are  no  prior  estates.^  This  is  upon  the  principle  of 
representation.  "The  first  tenant  in  tail,"  says  Lord  Camden, 
""  is  suifieient ;  he  sustains  the  interests  of  everybody :  those  in 
remainder  are  considered  ciphers."  ^ 

But  it  is  not  enough  to  make  the  persons  holding  the  life  in- 
terest in  the  mortgaged  premises  parties  to  the  bill  without  join- 
ing any  one  having  a  remainder  in  fee  ;  as  in  case  the  mortgagor 
makes  a  devise  of  the  premises  to  trustees  in  trust  for  his  chil- 
dren for  life,  remainder  in  fee  to  his  grandchildren  :  the  latter 
must  be  made  parties  in  order  to  cut  off  their  right  of  redemption. 
The  trustees  cannot  represent  the  whole  estate.* 

After  the  conveyance  of  lands  subject  to  mortgage  in  trust  for 
the  benefit  of  children,  both  those  in  being  and  those  to  be  born, 
all  the  children  in  esse  at  the  time  of  the  filing  of  a  bill  of  fore- 
closure should  be  made  parties.  A  decree  against  the  trustee 
alone  does  not  take  away  their  right  to  redeem.^ 

1402.  The  mortgagor,  if  he  remains  the  owner  of  the 
equity  of  redemption,  is  a  necessary  party  to  a  foreclosure 
suit,  because  without  his  presence  the  primary  object  of  the  suit, 
a  decree  of  foreclosure  or  sale,  cannot  be  obtained.^     Even  if  he 

i  Gore    V.  Stacpoole,   1  Dow,  18,   31;  Piatt  r.  Sprigg,  2  Vern.  304 ;  Williamson 

Rcynoldson  v.  Perkins,  Ambl.  564  ;  Eagle  v.  Field,  2  Sandf.  (N.  Y.)  Ch.  533. 

F.  Ins.  Co.  V.  Cammet,  2  Edw.  (N.  Y.)  Ch.  »  Rcynoldson  v.  Perkins,  Ambl.  564. 

127  ;  Blount  v.  Earl  of  Winterton,  1  Har-  *  Leggett  v.  Mut.  Life  Ins.  Co.  64  Barb, 

ris  Ch.  Pr.  29  ;  Cholmondelcy  v.  Clinton,  (N.  Y.)  23,  36. 

2  Jac.  &  Walk.  133 ;  Chappell  v.   Rees,  1  ^  Clark  v.  Reyburn,  8  Wall.  318. 

De  G.,  M.  &  G.  393  ;  Hopkins  v.  Hopkins,  «  Story  Eq.  PI.  §  197  ;  Farmer  u.  Curtis, 

1   Atk.  590;  Fishwick  v.  Lowe,  1    Cox,  2  Sim.  466  ;  Fell  i-.Brown,  2  Bro.  Ch.276  ; 

411;    Kcrrick    v.   Saffery,    7    Sim.   317;  Palk  v.  Clinton,  12  Ves.  48 ;  Caddick  w. 

Nodine   v.   Greenfield,   7    Paige  (N.  Y.),  Cook,  32  Beav.  70.    In  Kay  «.  Whittaker, 

544.  44  N.  Y.  565,  572,  Hunt,  J.,  said,  obviously 

2  Yates  &  Hambly,  2  Atk.  238  ;   Fish-  with  reference  to  the  case  of  the  mort- 

wich  V.  Low,  1  Cox,  411  ;  Lloyd  u.  .lohnes,  gagor's  still  remaining  the  owner  of  the 

9  Ves.  37  ;  Giffard  v.  Hort,  1  Sch.  &  Lef.  equity  :  "  To  sustain  a  foreclosure  suit,  the 

408  ;  Roscarrick  v.  Barton,  1  Ch.  Ca.  218  ;  mortgagor  is  a  necessary  party,  and  gen- 

380 


WHO   ARE   NECESSARY   OR   PROPER   PARTIES.  [§  1J:03. 

has  wholly  parted  with  his  interest  in  the  premises  he  should  be 
made  a  party  to  the  bill,  if  a  judgment  is  sought  against  him  for 
any  deficiency  of  the  debt  that  may  remain  after  applying  to  it 
the  proceeds  of  the  sale.^  Therefore,  where  the  laws  provide  for  a 
judgment  for  such  deficiency  he  is  always  a  proper  party,  though 
not  a  necessary  one,  after  he  has  conveyed  his  interest,  so  far  as 
effecting  a  complete  foreclosure  of  the  equity  of  redemption  is 
concerned.  If  no  personal  judgment  is  sought  against  the  mort- 
gagor, or  none  can  be  had,  he  should  not  be  made  a  party  to  the 
bill  after  he  has  ceased  to  have  any  interest  in  the  subject  of  the 
mort^aere.^ 

1403.  If  the  mortgagor  retains  an  interest  in  the  property, 
such  that  he  may  again  become  possessed  of  the  equity  of  re- 
demption, he  must  be  made  a  party ;  as,  for  instance,  if  there  has 
been  a  voidable  or  irregular  sale  of  his  equity  under  a  subsequent 
mortgage.^  It  would  seem  that  until  he  has  actually  voided  the 
sale  the  purchaser  might  properly  be  regarded  as  the  necessary 
party  to  the  suit,  because  he  would  be  the  apparent  holder  of  the 
equity  of  redemption  ;  and  that  the  mortgagor  would  be  a  proper 
party  only  by  reason  of  his  possible  right  to  redeem.  Although 
a  mortgagor  has  entered  into  a  binding  contract  to  convey  the 
property,  he  is  not  a  necessary  party  until  he  actually  makes  the 
conveyance.  The  person  contracting  to  purchase  is,  however,  a 
proper  party  ;  and  the  court  may  even  order  him  to  be  brought 
in  before  entering  a  decree.'* 

erally   the    only   necessary  one.      Others  Lee,  2  Bland,  678;  Moore   v.   Starks,  1 

may  be  joined  if  it  is  desired  to  cut  off  Ohio  St.  369  ;  Cord  v.  Hirsch,  17  Wis.  403  ; 

their   interests,  as  a  wife,  a   subsequent  Semple  v.  Lee,  13  Iowa,  304 ;  Johnson  v. 

purchaser,  or  subsequent  mortgagee.  They  Monell,  13  Iowa,  300  ;   Murray  v.  Catlett, 

are  not  indispensable  parties.     The  action  4  Greene  (Iowa),  108 ;  Williams  v.  Meeker, 

is  good  without  them  ;  and  the  only  effect  29  Iowa,  292,  294  ;  Huston  v.  Stringham, 

of  their  absence  is  that  their  interests  are  21  Iowa,  36  ;  Chester  v.  King,  2  N.  J.  Eq. 

not  affected  by  the  proceeding."    In  a  few  (I  Green)  40.o ;  Vreeland  v.  Loubat,  lb. 

cases  the  mortgagor  has  been  spoken  of  as  104. 

a  proper  party  merely.    Semple  v.  Lee,  13         2  Brown  v.  Stead,  5  Sim.  535  ;  Swift  v. 

Iowa,  304  ;  Sumner  v.  Coleman,  20  Ind.  Edson,  5  Conn.  531  ;  Broome  v.  Beers,  6 

486.     But  it  is  conceived  that  this  is  an  Conn.  198;  Wilkins  v.   Wilkins,  4   Port, 

inaccuracy  in  the  use  of  terms.  (Ala.)   245;    Inge  v.   Boardman,   2   Ala. 

»  Delajdaine   v.   Lewis,    19    Wis.   476;  331;  Stevens  v.  Campbell,  21   Ind.  471; 

Bigelow  V.  Buhh,  6  Paige  (N.  Y.),  343  ;  Burkham  v.  Beaver,  17  Ind.  367. 
Shaw  V.  Hoadley.  8  Blackf.  165  ;  Van  Ne-,1         »  Merritt  v.  Phenix,  48  Ala.  87  ;  and  see 

i;.  Lut.son,  19  Barb.  (N.  Y.)  604;  Ileyman  also  Huston  i;.  Stringham,  21  Iowa,  36. 
V.  Ix)well,  23  Cal.  106  ;  Michigan  Ins.  Co.         ♦  Crooke  v.  O'lliggias,  14  How.  (N.  Y.) 

f.  Brown,  II  Mich.  265;  Worihington  i'.  Pr.  l.')4. 

381 


§§  1 104,  140,").]  or  rvuiiKs  dkfkndant. 

In  some  oases  it  luis  been  held  that  the  cireunistance  that  the 
mortgagor  has  conveyed  the  premises  by  a  warranty  deed  gives 
him  a  sutlieient  interest  in  a  suit  to  foreclose  the  mortgage  to  au- 
thorize his  being  made  a  party  defendant.^  But  these  decisions 
are  not  generally  sustained.  The  mortgagor,  however,  is  pre- 
suiiK'd  to  rt'taiii  his  interest  in  the  property,  and  to  be  a  necessary 
party,  unless  the  bill  discloses  a  state  of  facts  which  render  the 
nuiking  of  him  a  party  unnecessary.^ 

The  grantor  in  an  absolute  deed,  intended  as  a  mortgage,  is  not 
a  necessary  party  when  the  defeasance  is  executed  to  another,  to 
secure  whose  debt  the  deed  was  made.  He  is  a  proper  party, 
though  generally  he  may  be  omitted.  If  the  complainant,  how- 
ever, has  any  doubt  of  the  validity  of  the  conveyance,  he  may 
very  properly  join  him  to  set  the  doubt  at  rest.'^ 

1404.  The  mortgagor,  after  he  has  conveyed  the  whole  of 
the  premises  mortgaged,  is  not  a  necessary  party  to  the  suit  ; 
nor  indeed  is  he  a  proper  party,  unless  a  personal  judgment  for 
any  deficiency  there  may  be  after  applying  the  property  to  the 
debt  is  sought  against  him.*  The  decree  is  conclusive  upon  the 
title  without  him.^  He  is,  however,  so  far  a  proper  party  in 
case  a  personal  judgment  against  him  is  sought,  that  this  judg- 
ment is  conclusive  against  him  in  any  future  litigation  between 
the  same  parties,  and  he  may  take  an  appeal  from  it.^  If  he  is 
not  made  a  party,  and  no  one  under  him  has  become  personally 
liable  for  the  debt,  the  decree,  after  finding  the  amount  of  the 
debt,  can  merely  direct  a  sale  of  the  premises  in  satisfaction  of 
the  debt."  And  such  would  be  the  case,  also,  when  the  debt  is 
barred  by  the  statute  of  limitations,  although  he  is  made  a  party .^ 

1405.  If  the  mortgagor  has  conveyed  away  only  a  portion 
of  the  premises,  and  remains  owner  of  the  residue,  he  may  still  be 
regarded  as  a  necessary  party,  and  the  purchaser  of  the  part  only 
a  proper  one,  because  a  decree  against  the  mortgagor  alone  would 

1  Gifford  V.  Workman,  1.5  Iowa,  34;  son  v.  Monell,  13  Iowa,  300;  Bclloc  v. 
Huston  17.  Stringham,  21  Iowa,  36.  Rogers,  9  Cal.  123;    Swift  v.  Edson,   5 

2  Kunkel  r.  Masktll,  36  Md.390.  Conn.  153;  Delaplaine  v.  Lewis,  19  Wis. 

3  Weed  V.  Stevenson,  Clarke  (N.  Y.)  Ch.  476 ;  Cord  v.  Ilirsch,  17  Wis.  532. 

166.  '^  Andrews  v.  StcUc,  22  N.  J.  Eq.  478. 

*  Miller  v.  Thompson,  34  Mich.  10.  '  Jones  v.  Lapliam,  15  Kans.  .540. 

6  Soule  V.  All.ee,  31  Vt.  142  ;  Drury  v.         "  Mich.  Ins.  Co.  v.  Brown,  1 1  Mich.  265. 

Clark,  16  How.  (N.  Y.)  Pr.  424  ;  Daly  v.  See,  also,  Rhodes  v.  Evans,  Clarke  (N.  Y.) 

Burchell,  13  Abb.  N.  S.  (N.  Y.)  Pr.  264  ;  Ch.  168. 
Stevens  v.  Campbell,  21  Ind.  471  ;  John- 

382 


WHO  ARE  NECESSARY  OR  PROPER  PARTIES.   [§§  1406,  1407. 

have  something  to  net  upon,  and  a  decree  against  the  purchaser  of 
a  portion  of  the  property  is  not  indispensable,  though  the  portion 
sold  to  hini  would  remain  unaffected  if  he  was  not  made  a  party .^ 

A  sale  of  the  mortgagor's  interest  upon  execution  does  away 
with  the  necessity  of  making  him  a  party  as  effectually  as  a  vol- 
untary sale  would. 

A  partition  of  the  estate  subsequent  to  the  mortgage  affects 
the  mortgagee  so  far  only  that  he  must  see  that  all  persons  who 
become  interested  in  the  property  by  the  partition  shail  be  made 
parties  to  the  proceedings  to  foreclose. 

1406.  The  holder  of  the  equity  of  redemption  by  purchase 
from  the  mortgagor  is,  of  course,  an  essential  party  to  a  bill  to 
bar  the  equity  by  foreclosure,^  Equally  with  the  mortgagor  he 
is  unaffected  by  any  foreclosure  proceeding  to  which  he  is  not 
made  a  party .^  If  he  has  assumed  the  payment  of  the  mortgage, 
there  is  a  double  reason  for  making  him  a  party.* 

1407.  If  the  purchaser  from  the  mortgagor  has  assumed 
the  payment  of  the  mortgage  debt,  and  thereby  made  himself 
personally  responsible  to  the  holder  of  the  mortgage,  there  is  less 
occasion  to  make  the  mortgagor  a  party.  As  between  him  and 
the  purchaser,  the  land  itself  and  the  purchaser  are  primarily 
responsible,  and  the  mortgagor  is  a  surety  only.  But  if  the  mort- 
gagee does  not  care  to  obtain  a  personal  judgment  against  him, 
there  is  no  occasion  to  make  him  a  party  to  the  proceedings."    In 

1  Douglass  V.  Bishop,  27  Iowa,  214,  r.  Buck,  29  Cal.  253 ;  Boggs  i'.  Hargrave, 
216  ;  Mima  v.  Mims,  35  Ala.  23;  Hull  v.  16  Cal.  559  ;  Dc  Leon  v.  Higiiera,  15  Cal. 
Lyon,  27  Mo.  570.  483  ;  Luning  v.  Brady,  10  Cal.  2G5  ;  Cliilds 

2  Ut-ed  f.  Marble,  10  Paige  (N.Y.),  409;  v.  Childs,  10  Ohio  St.  339;  Schmeltz  v. 
Peto  V.  Hammond,  29  Bcavan,  91  ;  Maule  Garey,  49  Tex.  49. 

V.  Duke  of  Beaufort,  1  Iluss.  349  ;  Nichols  Contrary  to  the  entire  list  of  authorities 
V.  Itandall,  5  Minn.  304,  308;  Wolf  v.  and  to  sound  principle  it  was  lield  in  Sum- 
Banning,  3  Minn.  202,  204  ;  Hall  v.  Nel-  ncr  v.  Coleman,  20  Ind.  486  ;  and  in  Sem- 
son,  14  How.  Pr.  32;  Cord  j;.  Hirsch,  17  pie  u.  Lee,  13  Iowa,  304;  Cline  v.  Inlow, 
Wis.  403  ;  Hall  y.  Huggins,  19  Ala.  200;  14  Ind.  419,  that  the  owner,  though  a 
Ohling  V.  Luitjens,  32  111.  23  ;  St.  John  proper  is  not  a  neccssury  party  defendant. 
i;.  Bumphtead,  17  Barh.  (N.  Y.)  100;  Wil-  »  Barrett  v.  Blaekniar,  47  Iowa,  565. 
liamson  i;.  Field,  2  Suiidf.  (N.  Y.)  Ch.  «  Bishop  v.  Douglass,  25  Wis.  696; 
5.33;  Watson  f.  Spcnce,2(t  Wend.  (N.  Y.)  Green  r.  Dixon,  9  Wis.  532.  Sec  this 
260;  Hall  v.  Nelson,  23  Bar!).  (N.  Y.)  88;  last  case  for  a  general  statement  of  the 
Moore  I'.  Cord,  14  Wi.M.  213;  Slark  v.  doctrine  as  to  parties. 
Brown,  12  Wis.  572  ;  Ilodson  v.  Treat,  7  ^  Daly  v.  Burcheil,  13  Abh.  (N.  Y.)  Pr. 
Wis.  263  ;  State  Bank  of  Wis.  v.  Abbott,  N.  S.  264,  268  ;  Paton  v.  Murray,  6  Paige 
20Wig.  570;  Lcnoxv.  Kccd,  12  Kans.  223;  (N.  Y.),  474;  Van  Nc^t  i'.  Latson,  19 
Bludworth  p.  Lake,  33'C«1.  265;  Skinner  Barb.  (N.  Y.)  604;  Shaw  v.  Uoadley,  8 

383 


§§  1408,  1400.]  OF    PAKIIKS    DKFKNIUNT. 

otlu'i-  \\\>rils,  ho  is  not  ;i  necessaiy  party  llu)ii|^li  a  proper  oiio.' 
There  is,  however,  no  roal  distinction,  us  rogarda  the  propriety 
of  making  the  mortgagor  a  })arty,  between  the  case  in  which  he 
has  siniplv  oonveyeil  the  hind  incumbered  by  the  mortgage  and 
that  where  the  purch:is(>r  has  assumed  tlie  payment  of  the  mort- 
gage debt.  The  mortgagor  is  just  as  much  bound  to  the  holder 
of  tlie  mortgage  in  one  case  as  in  the  other  ;  and  whether  he  re- 
mains the  principal  debtor,  or  by  a  sale  of  the  property  another 
assumes  his  place  as  debtor,  and  he  becomes  only  a  surety,  he 
continues  to  the  same  extent  liable  to  a  personal  judgment  for  a 
deficiency. 

1408.  Intermediate  purchasers  who  have  conveyed  their  in- 
terest in  the  property  should  not  be  made  parties  to  the  bill,  un- 
less they  have  assumed  the  payment  of  the  mortgage,  and  thus 
become  personally  liable  for  the  debt,  when  they  may  be  made 
parties  for  the  purpose  of  obtaining  a  personal  judgment  against 
them.2  If  they  have  not  made  themselves  responsible  for  the  mort- 
gage debt  by  assuming  it,  having  no  longer  any  interest  in  the 
land,  they  cannot  properly  be  joined  as  defendants.^ 

In  the  earlier  cases  it  was  held  that  a  mesne  purchaser  who 
had  assumed  the  mortgage  debt,  and  subsequently  conveyed  the 
premises  to  another  on  like  terras,  was  not  liable  to  the  holder  of 
the  mortgage,  by  reason  of  his  assuming  it,  because  there  was  no 
privity  of  contract  between  them  ;  that  he  was  liable  only  to 
his  grantor,  and  therefore  that  in  a  suit  to  foreclose  he  could  not 
be  made  a  party  and  adjudged  liable  to  pay  any  deficiency.'*  But 
now  the  rule  is  quite  general  that  one  who  has  thus  assumed  the 
debt  is  directly  liable  for  it  to  the  holder  of  the  mortgage.^ 

1409.  Tenants  in  common  and  several  owners  of  the  equity 
of  redemption  must  be  joined.  The  mortgagee  is  entitled  to 
receive  the  whole  of  his  money  together,  if  compelled  to  go  into 

Blackf.  (Ind.)  165;  Biirkhnin  v.  Beaver,  2  Pomeroy's    Remedies    and  Remedial 

17  lud.  367.  Rights,  §  337  ;  Hall  v.  Yoell,  45  Cal.  584. 

I  McArthur  v.  Franklin,   15  Ohio  St.  See  Lockwood  y.  Benedict,  3  Edw.  (N.  Y.) 

485,  509;  S.C.  16  lb.  193.    In  Delaplaine  472. 

V.  Lewis,  19  Wis.  476,  Cole,  .J.,  said  :  "  Ac-  »  Scarry  i;.  Eldridge  (Ind.  1878),  7  Cent, 

cording  to  the  weight  of  modern  authority,  L.  J.  418. 

the  rule  seems  to  be  settled  that  the  mort-  *  Lockwood  v.  Benedict,  supra. 
gagor  who  has  absolutely  parted  with  the  ^  Burr  v.  Beers,  24  N.  Y.  178;  Craw- 
equity  of  redemption  is  not  a  necessnrij,  ford  v.  Edwards,  33  Mich.  354,  and  cases 
though  he  is  a  very  proper,  defendant  in  cited. 
an  action  to  foreclose  the  mortgage." 

384 


WHO  ARE  NECESSARY  OR  PROPER  PARTIES.  [§§  1410,  1411. 
• 
court  at  all.  Therefore,  in  case  the  mortgage  was  made  by  tenants 
in  common,  he  is  entitled  to  a  foreclosure  of  the  whole  estate,  and 
cannot  be  compelled  to  receive  the  share  of  the  debt  due  from  one 
of  them  and  foreclose  against  the  other  for  his  share.^  Such  would 
also  be  the  case  when  two  estates  have  been  mortgaged  together, 
and  the  equit-ies  have  subsequently  passed  into  different  hands. 
Neither  would  he  be  allowed  to  foreclose  against  the  owner  of  one 
estate,  without  making  the  owner  of  the  other  a  party  also,^  un- 
less there  were  special  equities  in  favor  of  the  estate  exempted. 

If  the  mortgaged  estate  has  subsequently  been  divided  and  sold 
in  distinct  lots,  all  the  purchasers  must  be  made  parties  to  make 
an  effectual  foreclosure  of  the  whole  estate.^  If  the  mortgage  to 
be  foreclosed  covers  two  distinct  estates,  one  of  which  is  subse- 
quently incumbered  by  a  second  mortgage,  and  the  other  is  sold 
to  a  third  person,  both  the  second  mortgagee  and  the  purchaser, 
as  well  as  the  original  mortgagor  who  retains  the  equity  of  one  of 
the  estates,  must  be  made  parties  to  the  bill  ;  for  the  mortgage 
cannot  be  foreclosed  upon  one  estate  alone,  unless  there  be  special 
equities,  if  the  owner  of  it  objects.  The  purchaser  of  a  part  can 
redeem  only  by  paying  the  whole  debt.* 

1410.  Objection  that  the  o-wner  of  the  equity  is  not  made  a 
party  to  the  bill  may  be  taken  by  the  mortgagor  in  his  answer.^ 
But  objection  that  the  mortgagor  is  not  made  a  party  defendant 
cannot  be  made  by  a  purchaser  of  the  premises  who  is  a  party  to 
the  suit.°  An  objection  to  the  non-joinder  of  a  defendant  must 
be  taken  by  demurrer  or  answer,  or  will  be  deemed  to  have  been 
waived."  After  a  foreclosure  sale  the  mortgagor  cannot  object  to 
a  confirmation  of  it  on  the  ground  that  he  was  not  made  a  party, 
and  that  in  consequence  the  equity  of  redemption  was  not  extin- 
guished, and  the  premises  brought  much  less  than  they  would 
otherwise  have  brought.^ 

1411.  Purchaser  pendente  lite.  —  As  a  general  rule  whore  the 
equity  of  redemption  has  been  assigned  or  attached  after  the  com- 
mencement of  proceedings  in  equity  to  foreclose,  the  purchaser  or 

»  Frost  V.  Frost,  3  Sandf.  (N.  Y.)  Ch.  ^  Pcto  y.  Hninmond,  29  Bcftv.  91  ;  Drury 

188.  t;.  Clark,  16  How.  (N.  Y.)   I'r.  424;    Hall 

2  Cholmondchty  v.  Clinton,  2  J.  &  W.  v.  Nelson,  14  How.  (N.  Y.)  I'r. .32. 

134;  I'lilk  t;.  Clinton,  12  Ves.  48.  59.  «  Williams   v.   Meeker,   29    Iowa,    292, 

'  I'eto  V.  Hammond,  29  Hcav.  91.     Sec  294. 

IrcBon  V.  Denn,  2  Cox,  42.").  '  See  Davis  v.  Converse,  3^>  Vt.  503. 

♦  Douglass  v.  Bishop,  27  Iowa,  214.  »  Cord  v.  Ilirscli,  17  Wis.  408. 

VOL.  ij.                                    26  SbS 


§    MIL]  OF    TARTIKS    nKFF.NDANT, 

attaching  croditnr  nood  not  bo  brought  boforn  tlio  court ;  because 
lie  is  rogarch'tl  as  having  notice  ot"  the  j)laintiirs  rights  and  his 
proceedings  to  enforce  them,  and  can  chiini  against  him  only  such 
tith'  and  rights  as  the  owner  of  the  equity  had  at  the  time  of  the 
purchase  or  attachment.^  Provision  is  made  in  many  states  for 
the  tiUng  of  a  notice  of  the  pendency  of  the  suit  in  the  registry  or 
with  the  clerk  of  the  court  in  the  county  where  the  mortgage  is 
recorded  ;  -  and  where  the  recording  of  such  notice  is  required, 
thinl  persons  are  not  affected  with  notice,  unless  the  record  is 
made  as  required/"^  But  in  the  absence  of  such  statutory  provi- 
sions, the  proceedings  in  court  being  of  public  record,  parties  are 
regarded  as  having  constructive  notice  of  the  proceedings  and  take 
subject  to  them.  As  a  practical  matter,  if  a  mortgagor  could, 
after  the  commencement  of  the  suit,  create  new  parties  at  his 
pleasure,  by  making  new  incumbrances  upon  the  property,  whose 
presence  in  court  would  be  necessary  to  the  foreclosure  of  their 
rights,  there  might  be  no  end  to  the  suit.^  The  doctrine  of  lis 
pendens  does  not  rest  upon  the  presumption  of  notice,  but  upon 
reasons  of  public  policy  ;  and  applies  where  there  is  no  possibility 
that  there  was  actual  notice  of  the  pendency  of  the  suit.^ 

The  Us  pendens  commences  upon  the  serving  of  the  subpoena, 
if  the  bill  has  been  actually  filed. ^  The  pendency  of  the  suit 
creates  the  notice.  When  the  cause  is  ended  by  a  final  decree, 
there  is  no  longer  any  lis  pe^idens  by  which  parties  can  be  further 
affected  with  notice.'^     Under  a  statute  providing  for  the  filing  of 

1  Garth  v.  Ward,  2  Atk.  175 ;  Metcalfe  v.  pp.  667, 668  ;  2  R.  S.  N.  Y.  174,  §  43  ;  aud 
Pulvertolt,  2  Yes.  &  Bea.  205  ;  Gaskell  v.  Code,  §  132  ;  Abadie  v.  Lobcro,  36  Cal. 
Durdiii,  2  Ball  &  Bea.  169;  Lloyd  v.  Pas-     390. 

singhain,  16  Ves.  66;  Parkes  v.  White,  11  ^  This  notice  is  unnecessary   as  to  all 

Ves.  236;  McPlieison  v.  Housel,  13  N.  J.  parties  in  interest  before  the  court.     Tot- 

Eq.  299  ;  Watt  v.  Watt,  2  Barb.  (N.  Y.)  ten  v.  Stuyvesant,  3  Edw.  (N.  Y.)  Ch.  500. 

Ch.  371  ;  Jackson  v.  Losee,  4  Saiidf.   (N.  It  does  not  affect  those  having  paramount 

Y.)  Ch.  381 ;  Zeiter  v.  Bowman,  6  Baib.  rights.     Curtis  v.  Hitchcock,  10  Paige  (N. 

(N.  Y.)  133;  Griswold   v.   Miller,  15  lb.  Y.),  399. 

520;    Cleveland  v.  Boerum,  23  lb.  201;  *  Garth  i;.  Ward,  2  Atk.  175;   Bishop 

27  lb.  252;    3   Abb.  Pr.    294;    Lyon  v.  of  Winchester  v.  Paine,  11  Ves.  194,  197  • 

Sauford,  5  Conn.  548  ;  Paston  v.  Eubank,  Brooks  v.  Vt.  Cent.  R.  R.  Co.  14  Blatchf. 

3  J.  J.  Marsh.  (Ky.)  43;   Hull  v.  Lyon,  27  463,  471. 

Mo.  570;   Ostrora  v.  McCann,   21   How.  ^  Newman  v.  Chapman,  2  Rand.  (Va.) 

(N.  Y.)  Pr.  431  ;  Stokes  v.  Maxwell,   59  93. 

Ga.  78.  8  Anon.  1  Vcrn.  318. 

2  Rev.  Stat.  S.  C.  1873,  p.  600;  Code,  ">  Worsley  v.  Earl  of  Scarborough,  3 
Va.   1873,  p.   1166;    Code,  W.  Va.  1870,  Atk.  392;  Self  u.  Madox,  1  Vern.  459. 

386 


WHO   ARE   NECESSARY    OR   PROPER   PARTIES.  [§  1412. 

a  Us  pendens,  creditors  obtaining  judgments  afterwards,  even  be- 
fore service  of  the  summons  and  complaint  upon  the  owner  of  the 
equit)'  of  redemption,  are  cut  off  without  being  made  parties.^ 

If  pending  the  bill  the  mortgagor's  interest  in  the  land  is  sold 
on  execution,  the  plaintiff  is  not  bound  to  amend  his  complaint  so 
as  to  make  the  purchaser  a  party. ■^ 

It  is  not  within  the  power  of  the  mortgagor,  pending  a  foi'eclos- 
ure  suit,  by  contract  with  a  mechanic,  and  without  the  consent  of 
the  mortgagee,  to  create  an  incumbrance  upon  the  property  which 
could  in  any  wise  affect  the  rights  of  the  mortgagee  as  they  might 
be  declared  by  the  final  decree.^ 

Purchasers  and  creditors  attaching,  pendente  lite,  have  no  right 
to  come  in  by  petition  and  make  defence  in  the  suit.^  They  can 
only  make  themselves  parties  to  the  suit  by  filing  a  bill  to  protect 
their  rights.'' 

1412.  If  the  deed  to  the  piirchaser  of  the  equity  has  not 
been  recorded  at  the  time  of  the  bringing  of  the  bill,  he  is  nev- 
ertheless a  necessary  party  if  the  plaintiff  has  in  any  way  either 
actual  or  constructive  notice  of  it ;  ^  but  if  the  purchaser  has  not 
recorded  his  deed,  and  the  plaintiff  has  no  notice  of  it,  the  fore- 
closure is  binding  upon  the  purchaser  equally  as  if  he  were  made 
a  party.'  If  the  deed  be  recorded  before  the  service  of  summons 
upon  the  mortgagor,  the  grantees  are  necessary  parties,  although 
notice  of  the  pendency  of  the  action  had  been  filed  before  the  re- 
cording of  the  deed.^  Such  notice  becomes  operative  only  upon 
the  service  of  the  summons.  If  the  mortgage  was  not  recorded  at 
a  time  of  a  subsequent  sale  of  the  equity  of  redemption,  a  pur- 
chaser without  notice  is  not  a  necessary  party,  nor  even  a  proper 

J  Fuller  V.  Scriiiner  16    Hun  (N.  Y.),  424;  Ehle  u.  Brown,  31  Wis.  40.5;  Pcm- 

130.     And  sec  Weeks  i;.  Tomes,  lb.  349.  bone  v.  Edwards,  15  Wis.  95.     See  Hodson 

2  Bennett  v.  Calhoun  Ass'n,  9  Rich.  (S.  v.  Treat,  7  Wis.  263;  Green  v.  l)i.\on,  9 

C.)  Ya\.  163.  Wi.s.  532. 

»  Ilards  V.  Conn.  .Mut.  Life  Ins.  Co.  (U.         '  Leonard  v.  N.  Y.  Buy  Co.  28  N.  J.  Eq. 

S.  C.  C.  N.  D.  111.  1878)  8  Ins.  L.  J.  9 ;  6  192;  Kipp  v.  Brandt,  49  How.  (N.  Y.)  Pr. 

Keporter,  420.  35S  ;    Woods- 1;.  Love,  27  Mich.  308  ;  Ald- 

*  DaviH  V.  Conn.  Mut.  Life  Ins.  Co.  84  rich  v.  Stephens,  49  Cul.  676  ;    Houf,'hton 
III.  .508.  V.   Marion,  7   Wis.  244;  and    .see    Daven- 

*  People's    Bank  v.    Hamilton   Manuf.  jwrt  v.  Turpin,  41  (.'al.  100. 

Co.    10    Pai},'e   (N.    Y.),  481  ;    Loomis   i;.         •*  Farmers'  Loan  &  Tru.st  Co.  r.  Dick- 
Stuyvesant,  Ih.  490.  son, ,17  How.  {N.  Y.)  Pr.  477. 


•  Drury  v.  Clark,  16  How.  (N.  Y.)  Pr. 


387 


^§  141:^  1114.] 


OF    PARTIKS    DKKI'NDANT. 


om*  ;  bocauso  his  rit^lits  arc  paraniouiit  and  oannot  bo  affected  by 
the  siiit.^ 

1413.  A  mere  occupant  of  tlic  land  witliout  title  should  not  be 
made  a  party  to  the  bill,-  unli'ss  by  statute  tliis  be  required.^  If, 
however,  he  ha.s  any  rights,  these  are  not  prejudiced  by  the  de- 
cree,^ and  for  this  reason,  and  that  the  title  may  be  quieted,  an 
occupant  or  a  tenant  in  possession,  although  he  has  no  legal  inter- 
est in  the  premises,  has  sometimes  been  regarded  as  a  proper  party 
to  the  bill.^  A  lessee  for  a  term  of  years  of  the  mortgagor,  hav- 
ing a  right  to  retloem,  should  be  made  a  party  to  a  suit  to  fore- 
close.*^ 

1414.  Mortgagor's  heirs.  —  If  the  mortgagor  has  died  seised 
of  the  mortgaged  estate,  his  heirs  at  law  are  indispensable  parties. 
It  is  not  enough  to  nuike  his  executor  or  administrator  a  party  to 
itJ  The  personal  representative  has  no  title  to  the  land  ;  though 
in  some  states  he  has  a  temporary  right  of  possession. 

The  heirs  of  a  mortgagor  who  has  sold  the  mortgaged  premises 
in  his  lifetime  have  no  interest  in  the  land,  and,  therefore,  should 


1  Cline  V.  Inlow,  14  Ind.  419  ;  Minis  v. 
Mims,  1  Humph.  (Tenn.)  425. 

•-  Far.  &  Mil.  Bank,  26  Wis.  196  ;  Suiter 
V.  Turner,  10  Iowa,  517. 

'■^  Buckner  v.  Sessions,  27  Ark.  219; 
Fletcher  v.  Hutchinson,  25  Ark.  30. 

*  Suiter  v.  Turner,  10  Iowa,  517. 

6  Cruger  v.  Daniel,  McMuU.  Eq.  (S. 
C.)  157,  196. 

^  Lockliart  v.  Ward,  45  Te.\.  227  ;  Av- 
erill  V.  Taylor,  8  ISI.  Y.  44. 

"  Story  Eq.  PI.  §§  194,  196;  Farmer  v. 
Curtis,  2  Sim.  466 ;  Fell  v.  Brown,  2  Bro. 
Ch.  276;  Palk  v.  Clinton,  12  Ves.  48,  58  ; 
Duncombe  v.  Ilansley,  3  P.  Wms.  333  (n.)  ; 
Bradshaw  v.  Outrara,  13  Ves.  234 ;  Bissell 
i;.  Marine  Co.  55  111.  165  ;  Ohling  v.  Luit- 
jens,  32  III.  23  ;  Britton  v.  Hunt,  9  Kana. 
228  ;  Lane  v.  Erskine,  13  IlL  501  ;  Harvey 
V.  Thornton,  14  111.  217  ;  Moore  v.  Starks, 
1  Ohio  St.  369  ;  Graham  v.  Carter,  2  Hen. 
&  M.  6  ;  Mayo  v.  Tomkies,  6  Munf.  520; 
Mclver  v.  Cherry,  8  Humph.  (Tenn.)  713; 
Stark  V.  Brown,  12  Wis.  572;  Averett 
V.  Ward,  Bu^iee  F^.  (N.  C.)  192;  Worth- 
ington  V.  Lee,  2  Bland  Eq.  (Md.)  678; 
Muir  V.  Gibson,  8  Ind.  187  ;  Miles  v.  Smith, 
22   Mo.   502;   Kiernan    v.   BlackweJl,   27 

388 


Ark.  235;  Hunt  v.  Acre,  28  Ala.  580; 
Erwin  v.  Ferguson,  5  Ala.  158;  Shiveley 
V.  Jones,  6  B.  Mon.  274 ;  Bollinger  v. 
Chouteau,  20  Mo.  89;  Burton  ?;.  Lies,  21 
Cal.  87  ;  Abbott  v.  Godfroy,  1  Mich.  178  ; 
Byrne  v.  Taylor,  46  Miss.  95  ;  Bryee  v. 
Bowers,  11  Rich.  Eq.  (S.  C.)  41  ;  Wood 
V.  Moorhouse,  1  Lans.  (N.  Y.)  405  ; 
Simms  v.  Kichardson,  32  Ark.  297. 

A  statute  forbidding  an  action  to  be 
brought  against  an  executor  or  adminis- 
trator, within  one  year  from  the  date  of  his 
appointment,  does  not  apply  to  a  bill  for 
foreclosure  against  the  heir  of  a  deceased 
mortgagor.  Slaughter  v.  Foust,  4  Blackf. 
(Ind.)  379. 

In  Georgia  the  personal  representative 
of  the  mortgagor  is  a  necessary  party. 
Magruder  v.  Offut,  Dudley  (Ga.),  227; 
].)ixon  V.  Cuyler,  27  Ga.  248. 

In  South  Carolina,  under  the  former 
equity  practice,  it  was  said  that  the  per- 
sonal representative  should  be  joined. 
Mitchell  V.  Bogau,  11  Rich.  686,  711. 

In  Missouri,  since  the  Code  of  1845,  the 
personal  lepresentative  of  the  mortgagor 
is  a  necessary  party.  Miles  v.  Smith,  22 
Mo.  502 ;  Perkins  v.  Woods,  27  Mo.  547. 


WHO  ARE  NECESSARY  OR  PROPER  PARTIES.     [§  1414. 

not  be  made  parties  to  the  bill,  unless  the  validity  of  the  convey- 
ance is  controverted.^  If  the  complainant  seeks  for  a  personal 
judgment  or  for  an  account,  the  personal  representative  should  be 
joined  with  the  heirs  ;2  but  if  no  such  judgment  be  sought  the 
personal  representatives  should  not  be  joined.^  If  the  debt  is 
barred,  or  for  anv  reason  is  not  payable  out  of  the  personal  assets, 
the  occasion  for  joining  the  personal  representative  no  longer 
exists. 

The  heirs  of  the  mortgagor  or  other  person  who  has  died  seised 
of  the  estate  covered  by  the  mortgage  are  necessary  parties,  just 
as  the  deceased  mortgagor  or  owner  would  have  been  if  the  ac- 
tion had  been  brought  in  his  lifetime,  being  indispensable  to  the 
rendering  of  any  judgment  of  foreclosure,  or  for  the  sale  of  the 
property.  The  court  of  its  own  motion,  even  if  no  one  who  is  a 
party  to  the  suit  makes  objection  that  they  are  not  joined,  will 
order  them  to  be  brought  in  as  defendants.*  If  the  heirs  are  be- 
yond the  jurisdiction  of  the  court  the  cause  cannot  be  proceeded 
with.^  Under  a  statute  by  which  the  personal  representative  of 
a  deceased  person  succeeds  to  the  lands,  as  well  as  the  personal 
property,  for  the  purpose  of  administration,  the  executor  or  ad- 
ministrator becomes  the  necessary  party  in  the  foreclosure  of  a 
mortgage,  in  place  of  the  heir.*^ 

The  possibility  that  the  mortgage  debt  may  have  been  paid  in 
whole  or  in  part  is  no  occasion  for  joining  the  personal  representa- 
tive. Tlie  heir  can  take  advantage  of  such  payment,  if  any  there 
be,  and  must  establish  the  fact  himself  by  proofs.  Yet,  under 
the  statutes  of  several  of  the  states,  it  is  held  that  the  personal 
representative  is  a  proper  party  at  least,  and  should  be  admitted 
as  such  upon  his  motion  ;  ^  that  he  has  the  same  right  to  be  made 

»  Medley  y.  Elliott,  62  111.532;  Doug-  8   Cal.    580;    Carr    v.    Caldwell,    10   Cal. 

las    V.   Soutter,    52   III.    154;    Wilkins  v.  380. 

Wilkins,  4  Port.  (Ala.)  245.  ^  Hihcrnia  Savings  &  Loan  Soc.  )'.  Hor- 

2  Daniel  v.  Skipwith,  2  Bro.  C.  C.  155 ;  bert  (Cal.  Jan.  1879),  7  Reporter,  458. 

Bradshaw  ,;.  Outram,  13  Ves.  235  ;  Erwiu  *  Story's  Eq.  Pl.§  196  ;  Muir  v.  Gibson, 

V.  Ferguson,  5  Ala.  158;  I.«onard  v.  Mor-  8  Ind.  187. 

ris,  9  Paige,  90  ;  Bigelow  v.  Biisb,  6  Paige,  <*  Fell  v.  Brown.  2  Bro.  C.  C.  276  ;  Far- 

345;  Huston   v.  Slringliam,  21    Iowa,  36  ;  iner  i;.  Curtis,  2  Sim.  466. 

Darlington  v.  Kfiey,  13  Iowa,  177;  Dray-  ^  Harwood  v.  Marye,  8  Cal.  580. 

ton    V.    Marshall,  Rice   (S.    C.)  Eq.  373;  ^  Miles  y.  Smith,  22  Mo.  .502  ;  Darling- 

Inge  V.  Boardmiin,  2  Ala.  331  ;  Belloc  v.  ton  v.  EflFey,  13  Iowa,  177  ;  Hunt  v.  Acre, 

Rogers,  9  Cal.  123;  Ilarwood  i;.  Marye,  28   Ala.   580;    Dixon    v.  Cuyler,  27  Gn. 

248  ;  Mitchell  v.  Boann,  1 1  Rich.  S.  C.  686. 

38y 


§§  1415-1420.]  OF  rAiMiKS  dkfkndant. 

a  party  that.  tlu>  m(»rt;:j:i<xi>r  had  ;  ^  aiul  especially  when  the  mort- 
gagee seeks  to  ehar!j;e  tlie  personal  estate  of  the  deceaseil,  of  which 
the  administrator  is  tlie  representative,  on  account  of  the  inade- 
quacy of  tht>  security.- 

1415.  Heir  of  purchaser.  —  The  same  rules  as  to  making  the 
heirs  of  the  mortgagor  parties  to  the  foreclosure  suit  apply  as  well 
to  the  lieirs  of  a  purchaser,  or  of  a  judgment  creditor.^ 

1416.  Heir  of  partner.  —  If  one  of  two  or  more  joint  mort- 
gagors, who  are  partners,  dies  pending  a  suit  for  foreclosure,  it  is 
not  necessary  to  make  his  heirs  or  personal  representatives  parties 
to  it,  because  the  title  vests  in  the  surviving  partners,  who  alone 
are  the  proper  defendants.^ 

1417.  Although  the  mortgage  be  of  a  term  of  years  the 
mortgagor's  heii's  are  alone  interested,  and  therefore  must  be  made 
parties  to  a  bill  to  foreclose  the  mortgage.^ 

1418.  Devisees.  —  Under  the  same  rule  a  devisee  of  the  mort- 
gagor, whether  in  trust  or  beneficially,  is  a  necessary  party  in  re- 
spect to  so  much  of  the  equity  of  redemption  as  has  been  given 
to  him.^  If  the  whole  equity  has  been  devised  to  him,  the  heir 
having  no  interest  in  it  is  not  a  proper  party  ;  but  if  the  title  of 
the  devisee  under  the  will  be  disputed  by  the  heir,  then  he  should 
be  joined  as  well  ;^  and  since  the  probate  of  a  will  may  within 
a  limited  period  be  impeached,  a  plaintiff  who  proceeds  without 
joining  the  heirs  does  so  at  the  risk  of  their  afterwards  proving 
to  be  the  real  parties  in  interest.^  If  the  mortgagor  by  his  will 
charges  the  equity  of  redemption  with  the  payment  of  an  annuity, 
the  aniuiitant  should  be  made  a  party .^ 

1419.  Legatees.  —  When  legacies  are  made  a  special  charge 
upon  the  mortgaged  estate  the  legatees  should  be  made  parties.^*' 

A  guardian  of  minor  heirs  need  not  be  joined  with  them  as  a 
defendant  in  the  suit.^^ 

1420.  Mortgagor's  wife.  —  It  is  usual  to  make  the  wife  who 

1  Huston  V.  Strinjrham,  21  Iowa,  36.  ^  Earl  of  Macclesfield  i;.  Fitton,  1  Vern. 

2  Daiiiiifiton  v.  Effy,  13  Iowa,  177.  168;  Lewis  v.  Nangle,  2  Ves.  Sen.  430; 

3  Milroy  v.  Stockwcll,  1  Ind.  35.  Ambl.  150. 

*  Culluni  V.  Batre,  1  Ala.  126;  and  sec  »  Hunt  v.  Acre,  28  Ala.  580. 

Jones  V.  Parsons,  25  Cal.  100.  »  Hunt  v.  Fownes,  9  Ves.  70. 

6  Bradshaw   v.   Outram,    13  Ves.  235;  i*  Batchclor  v.  Middleton,  6  Hare,  78; 

Cholmondeley  y.  Clinton,  2  Jac.  &  W.  135.  McGown  v.  Yerks,  6  Johns.  (N.  Y.)  Ch. 

«  Coles  V.  Forrest,  10  Beav.  552  ;    Gra-  450. 

ham  V.  Carter,  2  Hen.  &  M.  (Va.)  6  ;  Mayo  "  Alexander  i;.  Frary,  9  Ind.  481. 
V.  Tomkies,  6  Munf.  (Va.)  520. 
300 


WHO   ARE   NECESSARY    OR   PROPER   PARTIES.  [§  1420. 

has  joined  in  the  execution  of  the  mortgage  a  party.  But  no  ob- 
jection can  be  taken  by  tlie  defendant  that  she  is  not  joined  ;  the 
only  consequence  is  that  if  her  right  of  dower  becomes  fixed  and 
absolute,  she  may  then  redeem.^  It  is  questioned  in  some  cases 
whether  it  is  necessary  to  join  the  wife  in  order  to  cut  off  her  in- 
choate right  of  dower,2  on  the  ground  that  this  right  is  not  any 
real  interest  in  the  land.  But  generally  this  inchoate  right  of 
dower  is  regarded  as  right  in  the  land  created  for  her  benefit, 
which  attaches  as  soon  as  her  husband  is  seised  of  it,  although  it 
is  at  the  time  and  until  his  death  only  a  contingent  or  possible 
one.  This  inchoate  right  is  therefore  as  much  entitled  to  protec- 
tion as  the  right,  when  it  is  absolute.  The  want  of  harmony  be- 
tween the  decisions  in  this  matter  is  in  large  part  to  be  accounted 
for  by  the  statutes  of  several  states  which  have  radically  changed 
the  common  law  of  dower.  In  all  those  states  in  which  the  com- 
mon law  doctrine  remains  unchanged,  when  the  wife  of  a  mort- 
gagor has  joined  in  the  execution  of  a  mortgage,  the  rule  is  gen- 
eral that  she  should  be  joined  as  a  party  when  it  is  desired  to  bar 
her  rights  by  the  decree  of  foreclosure  or  sale.'' 

The  wife  having  no  separate  estate  in  the  property  at  the  time 
of  the  foreclosure,  but  only  a  possibility  of  dower  upon  the  death 
of  the  husband  leaving  her  surviving,  some  authorities  hold  that 
when  she  is  made  a  party  to  the  foreclosure  suit  a  personal  ser- 
vice of  the  summons  upon  her  is  not  necessary  ;  that  it  is  suffi- 

1  Powell  r.  Ross,  4  Cal.  197.  504;    Revalk    v.    Kracmer,    8    Cal.    66; 

2  In  Denton  v.  Nanny,  8  Barb.  618,  Kohner  v.  Ashenauer,  17  Cal.  578;  An- 
Brown,  J.,  said  :  "  I  find  it  nowhere  ex-  thony  v.  Nye,  30  Cal.  401  ;  Marks  v. 
pressly  adjud[,'ed  that  a  wife  is  a  necessary  Marsh,  9  Cal.  96  ;  Burton  i;.  Lies,  21  Cal. 
party  to  a  bill  of  foreclosure  in  order  to  87  ;  Tadlock  v.  Eccles,  20  Tex.  782 ; 
cxtin(;uish  her  inchoate  right  of  dower.  Wisner  i".  Farnham,  2  Mich.  472  ;  Wright 
Hell  V.  Mayor  of  N.  Y.  10  Paige,  49;  u.  Langley,  36  111.  381  ;  Johns  d.  Reardon, 
Kslavat;.  Le  Pretre,  21  Ala.  504;  Cary  v.  3  Md.  Ch.  57;  Leonard  v.  Villars,  23  111. 
Wheeler,  14  Wis.  281 ;  but  see  Foster  v.  377;  Denniston  v.  Potts,  19  Miss.  36; 
Hickox,  38  Wi.s.  408  ;  Thornton  v.  Pigg,  Byrne  i-.  Taylor,  46  Miss.  95  ;  Watt  v.  Al- 
24  Mo.  249;  Riddick  v.  Walsh,  15  Mo.  vod,  25  Ind.  5.33  ;  Martin  i;.  Noble,  29  Ind. 
519,  538  ;  Powell  v.  Ross,  4  Cal.  197.  This  216  ;  Chambers  v.  Nicholson,  30  Ind.  349  ; 
cane,  however,  is  overruled  by  later  cases  Mills  v.  Van  Voorhics,  28  Barb.  (N.  Y.) 
in  this  state.     See  below.  125  ;  S.  C.  20  N.  Y.  412  ;  Merchants'  Bank 

'Foster    V.    Hickox,     38     Wis.     408;  i>.  Thomson,  55  N.  Y.  7,  1 1.     This  matter 

Moom'-y  V.  Maas,  22  Iowa,  380  ;  Chase  i;.  is  fully  di.scussed  in  McArthur  v.  Krank- 

Abboit,  20  Iowa,   154;   Burnap  v.  Cook,  lin,   15   Ohio    Sl  485  ;  S.  C.  16  Ohio  St. 

16  Iowa,  149;  Sargent  v.   Wilson,  5  Cal.  193. 

391 


§  1421.]  OK    I'AUIIKS    DKKENDANT. 

cieut  to  sorvo  it  upon  (he  husband  only  ;  and  that  h(^  is  hound  to 
appear  for  hor,  and  if  hi-  thx's  not  she  may  ho  defaulted  :is  if  per- 
sonally servi'd.i  Her  right  is  regar(UHl  as  a  mere  incident  to  her 
husband's  title.  It  would  seem,  however,  that  process  sliould 
issue  against  her.  Though  she  be  made  a  party  to  the  suit,  a 
summons  issued  against,  and  served  on  the  husband  alone,  does 
not,  according  to  most  authorities,  bind  her  in  any  way,  or  even 
authorize  tlie  liusband  to  appear  and  act  for  her  ;  and  the  doctrine 
stated  above  seems  to  be  generally  repudiated.^ 

1421.  If  the  wife  did  not  join  her  husband  in  his  mortgage 
in  release  of  her  dower,  she  should  still  be  made  a  party  to  the 
bill  if  there  is  a  defence  to  the  claim,  either  by  reason  of  a  subse- 
quent release,  or  because  the  mortgage  was  given  to  secure  the 
payment  of  purchase  money,  and  is  not  subject  to  dower.^  In 
such  cases  the  right  is  subordinate  to  the  mortgage,  and  is  barred 
if  she  be  made  a  party.  There  are  cases  in  conflict  with  this 
rule,  proceeding  upon  the  theory  that  the  wife  in  such  case  has 
no  interest  in  the  land,  or  any  equity  of  redemption,  and  is  there- 
fore barred  by  the  decree,  although  not  made  a  party."*  If  the 
claim  be  a  paramount  one,  and  in  no  way  subject  to  the  mort- 
gage, it  cannot  then  be  barred  by  the  decree,  and  she  should  not 
be  made  a  party  to  the  suit.^  But  if  she  has  not  joined  in  the 
mortgage,  and  there  is  no  defence  to  her  claim,  she  is  not  a  proper 

1  Foote  V.  Lathrop,  53  Barb.  (N.  Y.)  recent  decisions  for  the  rule  that  service 

183  ;  affirmed  in  41  N.  Y.  358  ;  Watson  v.  upon  the  husband  alone  is  good. 

Church,    10  S.  C.   (N.    Y.)    3   Hun,  80;  2  McArthur  v.  Franklin,    15  Ohio  St. 

Eckerson   v.    Vollmer,  11    How.  (N.  Y.)  485;  S.  C.  16  Ohio  St.  193  ;  Union  Bank 

Pr.  42 ;  Lathrop  v.  Jleacock,  4  Lans.  (N.  at  Massillon  v.  Bell,  14  Ohio  St.  200.    Sec 

Y.)  1;  White  v.  Coulter,  1  Hun  (N.  Y.),  Denton  v.  Nanny,   8  Barb.  (N.  Y.)  624; 

359.     In  Ferguson  v.  Smith,  2  Johns.  (N.  Mills  v.  Van  Voorhies,  20  N.  Y.  415. 

Y.)   Ch.  139,  Chancellor   Kent  gives  as  3  Mills  i;.  Van  Voorhies,  20  N.  Y.  412 

the  reason  for  the  rule  that  service  of  a  reversing  S.   C.  23    Barb.   (N.  Y.)    125 

subpoena    against    husband    and   wife   is  Wheeler   v.  Morris,  2  Bosw.  (N.  Y.)  524 

good  if  made  on  the  husband  alone,  that  Heth  v.  Cocke,  1  Hand.  (Va.)  344;  Fos- 

the  husband  and  wife  are  one  person  in  ter  v.  Hickox,  38  Wis.  408. 

law,  and  the  husband  is  bound  to  answer  *  Fletcher    v.    Holmes,    32    Ind.    497  ; 

for  both.     Perhaps  this  reason  was  better  Etheridge  v.  Vernoy,  71  N.  C.  184-180. 

formerly  than  now.     As  regards  the  mat-  ^  Brackett  v.  Baum,  50  N.  Y.  8  ;    Mer- 

terof  service  upon  the  wife  in  a  foreclos-  chants'  Bank  v.   Thomson,  55  N.  Y.  7; 

ure  suit  to  bar  her  right  of  dower,  the  fact  Kittle  v.  Van  Dyck,  1  Sandf.  Ch.  76  ;  Bell 

that  this  is  no  existing  claim,  and  is  an  v.  Mayor  of  N.  Y.  10  Paige,  49 ;  Mills  v. 

interest  resulting  from  the  marital  rela-  Van  Voorhies,   20  N.  Y.  412;    Mavrich 

lions,  seems  to  be  the  ground  taken  in  the  v.  Grier,  3  Nev.  52. 

392 


WHO   ARE   NECESSARY   OR    PROPER    PARTIES.      [§§  14-22-1424. 

party  to  the  bill,  as  her  rights  would  not  be  affected  if  she  was 
made  a  party. ^ 

1422.  In  those  states  where  the  comraon  law  doctrine  of 
dower  is  changed,  and  husband  and  wife  are  made  wholly  inde- 
pendent of  each  other  as  to  their  rights  of  property,  the  wife  is 
not  a  necessary  party .^  If  she  has  no  interest  and  makes  no  claim 
of  interest,  she  should  not  be  made  a  party .^  The  wife  of  the 
mortgagor  who  has  released  her  interest  in  the  mortgage,  and 
then  joined  her  husband  in  conveying  the  equity  of  redemption  to 
a  purchaser,  can  have  no  possible  interest  in  the  land,  and  there- 
fore is  not  a  proper  defendant.  Of  course,  if  the  mortgaged  estate 
be  the  separate  property  of  a  married  woman,  she  is  then  owner 
of  the  equity  of  redemption,  and  as  such  is  a  necessary  party.* 

The  defendant  cannot  take  the  objection  that  his  wife,  who 
joined  in  the  execution  of  the  mortgage,  is  not  joined  as  a  party .^ 

1423.  Wife's  homestead.  —  If  the  premises  mortgaged  are 
subject  to  a  homestead  right,  the  wife  should  be  made  a  party .^ 
If,  however,  the  mortgage  was  given  to  secure  the  purchase  money 
and  the  wife  did  not  join  in  it,  she  is  not  a  necessary  party  by 
reason  of  the  homestead  right ;  such  a  mortgage  is  valid  and  not 
subject  to  the  homestead  right.' 

1424.  Husband.  —  In  an  action  to  foreclose  a  mortgage  exe- 
cuted by  husband  and  wife  on  the  separate  estate  of  the  wife,  the 
husband  is  a  necessary  and  proper  co-defendant,  both  by  reason 
of  his  interest  in  the  land  and  his  personal  liability  on  the  note.^ 
But  in  those  states  where  the  interests  of  husband  and  wife  are 
made  completely  separate  and  independent  as  to  the  property 
they  respectively  own,  there  is  no  good  reason  for  joining  the 
husband  in  such  case  unless  he  has  become  personally  responsible 

1  Baker  v.  Scott,  62  111.  80  ;  Slicidon  «  SaiRent  v.  Wilson,  5  Cal.  504  ;  Rc- 
V.  Patterson,  55  111.  507  ;  Merchants'  Bank  valk  v.  Kracmer,  8  Cal.  60  ;  Moss  v.  War- 
V.  Thomson,   55  N.  Y.  7  ;  S.  C  Al)b.  L.     ner,  10  Cal.  296. 

J.  426;  Lewis  i;.  Smith,  9  N.  Y.  502;  S.  ''  Amphlett   v.  Ilibbard,  29  Mich.  298. 

C.Il    Barb.    152;    Moomey  w.  Maas,  22  Cliristiancy,  J.,  said  :  "  We  see  nosub.-^tan- 

lowa,  380.  tial  (,'round  for  requirinj,'  her  to  be  made 

2  Miles  V.  Smith,  22  Mo.  502  ;  Thorn-  a  jtarty,  nor  can  we  sec  any  Huch  substan- 
ton  V.  I'in),',  24  Mo.  249  ;  I'owtll  v.  Koss,  tial  benefit  to  ari.'-c  from  such  requirement 
4  Cal.  197.  aa   would   counterbalance  the  embarrass- 

3  Stevens  i;.  Campbell,  21  Ind.  471.  ments  which  would  arise  from  such  a  rule." 
♦  Hill  c.  Edmonds,  5  Dc  G.  &  S.  003.  »  Wolf  v.  Banning,  3  Minn.  202  ;  Mav- 
6  Powell  t;.  Ross,  4  Cal.  197.                        rich  v.  Gricr,  3  Ncv.  52. 

393 


§§  1425, 1420).] 


OF   TAIMIKS    I>KFENDANT. 


fi)r  tlu'  cK'bl,  ami  a  pnsoiial  judj^UK'nt  is  sought  against  liiin;^ 
!uul  oi  I'oiiisi'  wlii'u  not  a  necessary  party  himself,  his  heirs  or 
personal  representatives  are  not  necessary  parties  to  a  snit  brought 
after  his  death. '-^ 

1425.  All  subsequent  mortgagees  as  well  as  other  incum- 
brancers should  be  made  parties  to  the  action,  or  they  may  after- 
wards redeem  ;  but  they  are  not  necessary  parties.^  The  assignees 
of  subsequent  mortgagees  are  parties  as  necessary  as  the  original 
mortgagees.*  If  the  entire  interest  is  assigned,  the  mortgagee  is 
no  longer  a  proper  party,  but  the  assignee  becomes  such  in  his 
place.^*  Tiie  assignee  in  bankruptcy  of  the  subsequent  mortgagee 
must  be  made  a  party  to  the  suit,  or  he  will  have  the  right  to 
rede«>m.*^ 

1426.  A  mortgagee  who  has  assigned  the  mortgage,  although 
he  has  not  indorsed  the  note,  is  not  primd  facie  a  necessary  party  ;  ^ 
nor  is  he,  although  the  assignment  shows  that  he  assigned  the 
mortgage  as  collateral  security.^  But  when  he  has  assigned  the 
mortgage   merelj'^  as  collateral   security,  it  is  desirable,  at  least, 


^  Somerset,  &c.  Savings  Ass'n.  v.  Cam- 
man,  11  N.J.  Eq.  (3  Stock.)  382  ;  Thorn- 
ton V.  Pigg,  24  Mo.  249 ;  Riddick  v. 
Walsh.  15  Mo.  538. 

2  Somerset,  &c.  Sav.  Ass'n  v.  Camman, 
supra. 

8  Peabody  i-.  Roberts,  47  Barb.  (N.  Y.) 
91  ;  Arnot  v.  Post,  6  Hill  (N.  Y.),  65; 
Waller  i-.  Harris,  7  Paige  (N.  Y.),  167; 
Carpentier  v.  Brenham,  40  Cal.  221  ; 
Gower  v.  Winchester,  33  Iowa,  303  ; 
Newcomb  v.  Dewey,  27  Iowa,  381  ;  Street 
V.  Beal,  16  Iowa,  68  ;  Chase  v.  Abbott,  20 
Iowa,  154;  Ileimstreet  v.  Winnie,  10 
Iowa,  4.30  ;  Anson  v.  Anson,  20  Iowa,  55 ; 
Johnson  v.  Harmon,  19  Iowa,  56  ;  Don- 
nelly V.  Riisch,  15  Iowa,  99;  Semple  v. 
Lee,  13  Iowa,  304  ;  Ten  Eyck  v.  Casad, 
15  Iowa,  524;  Crow  v.  Vance,  4  Iowa, 
434;  Veach  v.  Schaup,  3  Iowa,  194; 
Bates  17.  Ruddick,  2  Iowa,  423.  See  this 
last  case  for  a  full  discussion  of  the  point. 
In  Tennessee  it  is  held  that  subsequent 
mortgajrees  are  bound,  though  not  made 
parties,  if  there  was  no  collusion  between 
the  parties  to  the  bill,  or  other  special 
ground  of  equity.  Rowan  v.  Mercer,  10 
Humph.    359;    Rogers    v.    Holyoke,    14 

394 


Minn.  220;  Vanderkemp  v.  Shelton,  11 
Paige,  28 ;  Carpentier  v.  Brenham,  40 
Cal.  221  ;  S.  C.  .50  Cal.  549  ;  Kenyon  v. 
Shreck,  52  111.  382 ;  Wiley  v.  Ewing,  47 
Ala.  418;  Brown  v.  Nevitt,  27  Miss.  801  ; 
Vanderveer  v.  Holcomb,  17  N.  J.  Eq.  87  ; 
Atwater  v.  West,  28  N.J.  Eq.  361  ;  Gould 
V.  Wheeler,  28  N.  J.  Eq.  541  ;  Webb  v. 
Maxan,  11  Tex.  678;  Hay  ward  v.  Stearns, 
39  Cal.  55,  60  ;  Davenport  v.  Turpin,  43 
Cal.  597,  601  ;  Carpentier  v.  Williamson, 
25  Cal.  161  ;  Schadt  v.  Hcppe,  45  Cal.  433, 
437  ;  Pattison  v.  Shaw,  6  Ind.  377  ;  Mack 
V.  Grover,  12  Ind.  2.54  ;  Meredith  v.  Lackey, 
16  Ind.  1  ;  Murdock  v.  Ford,  17  Ind.  52; 
McKernan  v.  Neff,  43  Ind.  503  ;  Cooper  v. 
Martin,  1  Dana  (Ky.),  25  ;  Roney  v.  Bell, 
9  lb.  4  ;  Leonard  v.  Groome,  47  Md.  499. 

*  Swift  V.  Edson,  5  Conn.  531  ;  Van- 
derkemp y.  Shelton,  11  Paige,  28  ;  S.  C. 
Clarke,  Ch.  351. 

6  PuUen  V.  Heron  Min.  Co.  71  N.  C. 
567. 

c  Avery  v.  Ryerson,  34  Mich.  362. 

■7  Walker  v.  Bank  of  Mobile,  6  Ala. 
452  ;  Western  Reserve  Bank  v.  Potter,  1 
Clarke  (N.  Y.),  432. 

8  Woodruff  V.  Dcpue,  14  N.  J.  Eq.  168. 


WHO   ARE  NECESSARY    OR   PROPER   PARTIES.  [§  1427. 

that  he  should  be  made  a  party ;  because,  if  not  assigned  for  its 
full  value,  he  has  still  an  interest  in  it ;  and  he  may  in  fact  be 
able  to  show  that  the  debt  for  which  he  has  assigned  the  mort- 
gage has  been  paid,  and  that  he  is  really  the  only  one  beneficially 
interested  in  the  security. ^  The  better  practice,  therefore,  is  to 
make  the  assignor  of  the  mortgage  a  party,  whenever  it  appears 
either  from  the  assignment  or  otherwise  that  he  has  still  an  inter- 
est in  the  security.^ 

Except  by  reason  of  his  personal  liability,  a  mortgagee  who  has 
assigned  the  mortgage  absolutely,  and  indorsed  the  note,  is  not  a 
proper  defendant  in  a  suit  to  foreclose  the  mortgage.  The  action 
should  be  against  the  mortgagor  without  joining  him,  for,  though 
he  is  liable  to  the  holder  of  the  mortgage  as  indorser,  and  might 
be  joined  with  the  maker  in  a  suit  on  the  note,  he  has  nothing  to 
do  with  the  mortgaged  property,  and  cannot  be  a  party  to  the  fore- 
closure suit.^  But  where  a  personal  judgment  may  be  had  against 
any  one  liable  for  the  mortgage  debt,  such  mortgagee  could  be 
joined  for  that  purpose.^ 

1427.  Assignee  of  note.  —  In  those  states  where  the  transfer 
of  the  note  or  bond  secured  by  the  mortgage  is  held  to  carry  with 
it  the  mortgage  security,  the  holder  of  the  note,  though  he  has  no 
formal  assignment  of  the  mortgage,  should  be  made  a  party  t(5  the 
bill.^  In  accordance  with  this  principle,  after  a  mortgage  has 
been  assigned  by  an  indorsement  upon  it,  without  an  indorsement 
of  the  note  or  bond  secured  by  it,  the  assignor  remains  the  real 
holder  of  the  mortgage,  and  is  a  necessary  party.  ^  In  several 
states  there  are  statutes  requiring  the  assignor  to  be  made  a  party 
"  when  the  thing  in  action  is  not  assignable  by  indorsement,"  or 
when  it  is  not  a  negotiable  instrument.  Under  these  provisions 
the  holder  of  a  mortgage  note  transferred  by  indorsement,  or  by 
delivery  when  payable  to  bearer,  may  be  made  a  party  without 

>  Bard  f.  Poole,  12  N.  Y.  495.  Andrews    v.     Gillespie,    47    N.    Y.   487; 

*§    1375;    Whitney   v.   McKinney,   7  Cliristic  v.  Ilerrick,  1   Harb.  (N.  Y.)  Ch. 

Johns.  (N.   Y.)   Ch.   144;    Kittle  v.  Van  254;  Ward  i^.  Van  Hokkelen,  2  Paige  (N. 

Dyck,  1  Sandf.  (N.  Y.)  Ch.  76;  Bloomer  Y.),  289;  and  see  Delaware  Bank  v.  Jar- 

V.  StnrgPB,  58  N.  Y.  168,  175;  Ackerson  vis,  20  N.  Y.  266. 

r.  Lodi   Branch  K.  R.  Co.  28  N.  J.  Eq.  '  Burton   v.   Baxter,   7    Blackf.  (Ind.) 

542.  297. 

»  Sands  v.  Wood,  1  Iowa,  263.  •"•  Iloldridge  v.  Sweet,  2.3  Ind.  118  ;  Bell 

«  Nichols  V.  Uandall,  5  Minn.  304,  308 ;  v.  Schrock,  2  B.  Mon.  (Ky.)  29. 

3U5 


§§  1-128-1431.]  OF    PAKTIKS    DKFKNDANT. 

the  assignor;'  Itut  if  llic  niortgnge  ilcbt  bo  evidenced  by  a  bond 
or  lUMi-negotiable  note,  wliich  is  transferred  by  delivery,  although 
the  mortgage  is  formally  assigned,  the  assignor  is  a  necessary 
party.-  A  mortgagee  who  has  assigned  a  negotiable  note  with- 
out a  formal  assignment  of  the  mortgage  is  not  a  necessary 
party. ^ 

If  the  mortgage  secures  several  notes  which  have  been  assigned 
and  are  held  by  dilTerent  persons,  to  a  suit  by  one  lioldcM'  to  en- 
force the  mortgage  the  liohhn-s  of  the  other  notes  should  be  made 
pai-ties.-* 

1428.  Upon  the  death  of  a  junior  mortgagee  his  personal 
representative  is  a  proper  party  to  a  bill  by  the  prior  mort- 
gagee to  foreclose.     His  heir  has  no  interest  in  the  mortgage.^ 

1429.  After  default.  —  Incumbrancers  who  have  been  made 
parties  to  the  bill,  and  suffered  default,  cannot  complain  that  one 
of  them  was  not  duly  served  with  process,  when  afterwards  it  ap- 
pears that  the  property  has  sold  for  a  sum  less  than  the  amount  due 
upon  the  mortgage.  The  defendant  not  served  can  alone  take  ad- 
vantage of  the  want  of  service.^ 

1430.  After  payment.  —  A  junior  mortgagee  after  receiving 
full  satisfaction  for  his  debt,  though  not  made  a  party  to  a  fore- 
closure of  a  prior  mortgage,  has  no  right  of  redemption  which  he 
can  exercise  himself  or  transfer  to  another  ;  and  the  rule  is  the 
same  in  case  his  mortgage  is  in  the  form  of  an  absolute  convey- 
ance, and  he  has  upon  payment  conveyed  the  premises  at  the  re- 
quest of  the  mortgagor  to  a  third  party.  He  cannot  invest  the 
mortgagor  or  a  tliird  party  with  a  right  to  redeem  when  he  him- 
self lias  ceased  to  have  that  right.'' 

1431.  The  only  right  of  a  junior  mortgagee,  who  has  not 
been  made  a  party  to  the  foreclosure  of  a  prior  mortgage,  is 
to  redeem  the  property  from  that  mortgage.  It  does  not  matter 
that  on  the  sale  of  the  property  under  the  foreclosure  of  the  prior 
mortgage  there  was  a  surplus  which,  with  the  consent  of  the  mort- 
gagor, was  paid  to  a  third  mortgagee  who  was  made  a  party  to 
the  suit,  and  the  property  subsequently  depreciated  so  that  there 

1  Gowcr  V.  Howe,  20  Ind.  396.  6  Whitla  v.  Ilalliday,  4  Dniry  &  War- 

2  Holdridge  v.  Sweet,  23  Ind.  118;  ren,  207;  Shaw  v.  McNi.sh,  1  Barb.  (N. 
French  v.  Turner,  15  Ind.  5'j.  Y.)  Ch.  326. 

3  Wilson  V.  Sprintr,  04  111.  14.  6  Mont{,'omery  v.  Tutt,  11  Cal.  307. 
*  Delespine  v.  Campbell,  45  Tex.  628.  ^  McHenry  v.  Cooper,  27  Iowa,  134. 

396 


WHO   ARE   NECESSARY   OR   PROPER   PARTIES.  [§  1432. 

was  no  value  above  the  first  mortgage.  The  middle  mortgagee 
has  no  claim  upon  the  surplus.  Whether  the  property  has  in- 
creased or  depreciated  in  value  since  the  sale  under  the  first  mort- 
gage does  not  affect  his  right  to  redeem,  which  is  the  only  right 
he  has  in  the  matter.^ 

1432.  A  guarantor  of  the  mortgage  debt  is  not  a  proper  party 
to  the  foreclosure  suit,  because  he  is  not  liable  to  the  holder  of  the 
mortgage,  until  the  remedy  against  the  mortgagor  and  the  prop- 
erty mortgaged  is  first  exhausted.^  But  where  the  court  has 
power  to  decree  the  payment  of  any  deficiency  there  may  be  after 
the  sale  of  the  property,  as  well  against  a  third  person  as  against 
the  mortgagor,  then  a  mortgagee  who  has  assigned  his  mortgage 
and  guaranteed  the  payment  of  it,  or  any  other  person  who  has 
become  a  guarantor  or  surety  of  the  debt,  is  a  proper,^  though  not 
a  necessary,*  party  to  a  suit  to  foreclose  the  mortgage.  One  who 
has  guaranteed  that  the  mortgage  debt  is  collectible  is  in  this 
way  a  proper  party .^  But  in  all  cases  when  the  collateral  under- 
taking is  strictly  one  of  guaranty,  the  judgment  should  provide 
that  execution  should  not  issue  against  the  guarantor  until  an 
execution  against  the  persons  primarily  liable  has  been  returned 
unsatisfied.^  Upon  a  guaranty  made  by  the  holder  of  a  mortgage 
upon  assigning  it,  that  the  mortgaged  premises  are  sufficient  to 
pay  the  debt,  and  that  the  mortgage  is  collectible,  the  guarantor 
is  not  liable  unless  the  assif^nee  makes  a  diligent  foreclosure  of 
the  mortgage.  Any  unreasonable  delay,  such  as  the  lapse  of  nine 
months  after  the  maturity  of  an  instalment  of  the  mortgage,  to 
foreclose  it  will  discharge  the  guarantor.'^ 

A  guarantor  of  "  collection  "  is  not  generally  a  proper  party ,^ 
because  no  obligation  arises  on  the  part  of  such  guarantor  until 
there  is  found  to  be  a  deficiency  after  foreclosure  ;  '-^  nor  is  a  surety 

1  McKernan  v.  NefT,  43  Ind.  503.  *  Cases  above  cited,  and  Stiver  v.  Ma- 

•^  Newton   v.  Earl  of   E},'mont,  4   Sim.  hone,  24  N.  J.  Eq.  42G,  430. 

574;  Gcdye  «.  Malsou,  2.5  IJeav.  310;  Joy  ^  Leonard  i-.  Morris,  9   Paige   (N.  Y.), 

V.  Jackson,  &c.  Co.  11  Mich.  15.5  ;  Borden  9'J  ;  Curtis  v.  Tyler,  lb.  432. 

V.  Gilbert,  13  Wis.  G70.  '^  Leonard  v.  Morris,  sti/ira. 

»  §  1710;  Jarman  v.  Wiswall,  24  N.  J.  ''  Northern  Ins.  Co.  of  N.  Y.  v.  Wright 

Eq.  207;  Bristol   v.  Morgan,  3   Edw.  (N.  (N.  Y.  Ct.  of  Appeals,  1879),  19  Alb.  L. 

Y.)  Cb.  142;  UiLshmorc  v.  Miller,  4   lb.  J.  378;  Craig  v.  Parkis,  40  N.  Y.  181. 

84;  Jones  v.  .SiienlK;rgb,  1    Barb.  (N.  Y.)  «  Baxter  t-.   Smack,   17   How.   (N.   Y.) 

Ch.  250;  Luce  v.  Hinds,  Clarke  (N.  Y.),  Pr.  183. 

453.  0  Johnson  v.  Shepard,  35  Micii.  115. 

8U7 


§§  14oo-14;^5.]  OF    PARTIKS    DKKKNDANT. 

for  till'  provision  by  tlio  nioi-li,Mg()r  of  :i  sinlving  fund  to  be  in- 
vested fi>r  tlu'  j)aynnMit  of  tlu'  mortgage.' 

A  state  wliii'h  has  indorsed  the  bonds  of  a  raih'oad  company, 
secured  by  a  statutory  niortgag(%  is  not  considered  a  necessary 
party  to  a  suit  to  foreclose  thi^  mortgage.^ 

1433.  Collateral  to  guaranty.  —  And  tlie  courts  have  gone 
still  further  in  this  direction,  and  have  held  that  the  maker  of  a 
collateral  obligation  taken  by  the  guarantor  as  further  security 
for  the  amount  due  on  the  mortgage  is  a  proper  party  to  the  suit, 
because  the  holder  of  the  mortgage  is  entitled  in  equity  to  the 
benefit  of  the  collateral  undertaking,  and  to  have  a  decree  against 
him  if  the  proceeds  of  the  sale  are  insufficient.^ 

The  heirs  and  devisees  of  a  deceased  guarantor  cannot,  how^- 
ever,  be  made  parties  to  the  suit  for  the  purpose  of  reaching  real 
estate  that  has  come  to  them  from  the  deceased  to  satisfy  an 
anticipated  deficiency  in  the  mortgaged  property  to  meet  the 
debt.i 

1434.  Indorser  of  note.  —  Except  for  the  purpose  of  obtain- 
ing a  personal  judgment  against  one  who  is  merely  an  assignor  or 
indorser  of  a  promissory  note  secured  by  the  mortgage,  he  is 
neither  a  necessary  nor  proper  party  to  an  action  against  the 
maker  to  foreclose  the  mortgage.  The  indorser  is  concluded  by 
the  amount  for  which  the  property  is  sold  under  the  decree  of 
foreclosure,  and  cannot  afterwards  object  in  a  suit  against  himself 
on  his  indorsement  that  he  was  not  a  party  to  the  foreclosure 
suit.^  And  so  also  the  maker  of  a  note  which  is  secured  by  a 
mortgage  executed  by  another  is  not  a  necessary  party,  and  if  no 
personal  claim  is  made  against  him,  is  not  a  proper  party  to  the 
suit  to  foreclose.*^ 

1435.  Joint  mortgages.  —  In  a  bill  to  foreclose  by  one  of  two 
joint   mortgagees,  the   other  mortgagee  must   be  made  a  party, 

1  Joy  V.  Jacksfjn,  &c.  Co.  11  Mich.  155.  **  Kearsing  v.  Kilian,  18  Cal.  491  ;  and 

2  Young  V.  R.  R.  Co.  (C.  C.  of  U.  S.  see  Deland  v.  Mershon,  7  Iowa,  70;  Wil- 
Ala.)  3  Am.  L.  T.  R.  (N.  S.)  9.  kinson  v.  Daniels,  1   Greene  (Iowa),  179; 

3  Curtis  V.  Tyler,  9  Taigc  (N.  Y.),  4.32.      De  Cottes  y.  Jeffers,  7  P'la.  284.    .See,  how- 
*  Leonard  v.  MorriH,  9  Paige  (N.  Y.),     ever,  Davis  v.  Converse,  35  Vt.  503,  where 

90.  the  principal  was  held  a  proper  party,  by 

6  Markel  v.   Evans,  47    Ind.   326.     In  reason  of  the  accounting  before  the  master, 

California  it  is  held  that  it  is  proper  under  and  the  court  for  that  reason  might  com- 

the  practice  act  to  join  the  mortgagor  and  pel  his  being  brought  in  if  the  objection 

indorser  as  defendants.     Eastman  v.  Tur-  was  made  in  season, 
man,  24  Cal.  379. 

398 


WHO  ARE  NECESSARY  OR  PROPER  PARTIES.     [§  1436. 

either  by  joining  in  the  bill,  or  if  he  declines  to  do  this,  as  a  re- 
spondent.^ But  where  a  mortgage  secures  several  notes  falling 
due  at  different  times,  in  a  suit  by  the  holder  of  one  of  the  notes 
to  foreclose  the  mortgage,  the  holder  of  a  note  subsequently  fall- 
ing due  is  not  a  necessary  party  ;  but  if  not  made  a  party,  of 
course  his  rights  are  unaffected  by  the  decree  and  sale.^  The 
mortgagee  not  made  a  party  may  subsequently  file  his  complaint 
to  foreclose,  and  may  make  the  debtor  and  all  the  other  mort- 
gagees parties,  and  may  contest  the  claims  of  the  latter.^  If  there 
be  two  mortgages,  one  collateral  to  the  other,  both  mortgagors 
should  be  made  parties  to  the  bill  to  foreclose,  for  the  mortgagor 
in  the  collateral  mortgage  has  a  right  to  redeem,  and  it  is  his  in- 
terest that  his  property  should  be  called  upon  to  satisfy  as  small  a 
deficiency  as  possible.'* 

1436.  Judgment  creditors.  —  A  subsequent  judgment  cred- 
itor of  the  mortgagor  having  a  lien  upon  the  property  should  be 
made  a  party  to  the  proceedings,  otherwise  he  may  redeem  after 
the  sale,  but  he  is  not  a  necessary  defendant.^  He  cannot,  how- 
ever, have  the  sale  set  aside  by  petition  in  the  foreclosure  suit.^ 
There  has  been  some  question  as  to  what  acts  are  necessary  to 
constitute  this  lien,  and  when  it  accrues.  A  judgment  is  gener- 
ally a  lien  from  the  time  it  is  docketed,  and  no  execution  or  sale 
is  necessary  to  establish  a  title  to  redeem.  The  judgment  itself 
cai-ries  with  it  the  right  of  redemption,  and  therefore  makes  the 
creditor  a  necessary  party.^  In  case  the  mortgage  be  for  fore- 
closure money,  no  lien  by  subsequent  judgment  would  attach, 
and  therefore  the  creditor  is  without  remedy  whetlier  made  a 
party  or  not.^  And  so  also  if  the  judgment  creditor  has  not  per- 
fected the  proceedings  under  his  judgment,  so  as  to  have  made  it 
a  charge  upon  the  debtor's  land,  he  is  not  a  proper  party .^  A 
creditor  of  the  mortgagor  who  has  attached  the  equity  of  rcdeiup- 

1  Hopkins  v.  Ward,  12  B.  Mon.  (Ky.)  v.  .Johnson,  7  Abb.  N.  S.  (N.  Y.)  Pr.  202  ; 
185.  Brainiird  v.  Cooper,  10  N.  Y.  350;  Troc- 

2  Harris  u.  Harlan,  14   Ind.  r.i'.t  ;  Miir-  tor  v.  Baker,  15  Ind.  178;  Muir  v.  Gibson, 
dock  V.  Ford,  17  Ind.  52.  8   Ind.   187;    Gaines  v.  Walker,   10   Ind. 

«  Goodull  V.  Mopley,  45  111.  .355.  301  ;  not  a  ueccssary  party. 

♦  Stokes  V.  Clindon,  3  Swanst.  150.  «  Pratt  t^.  Frear,  13  Wis.  462. 

6  Sharpe  i'.  Earl  of  Searborough,  4  Vcs.  '  Brainard  r.  Coojicr,  su/n-a. 

.WS;   Stonchewer   v.  Thompson,  2   Atk.  *  Person  w.  Merrick,  5  Wis.  231. 

440;   Blagrave   i;.   Clunn,  2   Vern.    576;  »  Earl  of  Cork  u.  Bussell,  L.  U.  13  Kii. 

Henry  v.  Smith,  2  I).  &  War.  390;  Ad-  210. 
ama  i;.  Paynter,  1   Coll.  530 ;  Wincbrencr 

399 


§§  1437,  14o8.]  OF    PARTIKS    DKFENDANT. 

tioii  should  be  iikuIc  :i  i>:irty  ;  '  ;is  also  one  who  has  levied  an  cx- 
ecuti(Mi  u\Hm  it,  thouj^h  the  time  aUowi'd  the  debtor  to  redeem 
has  not  expired." 

A  judgment  remU'red  against  a  person  prior  to  his  purchase  of 
huul  is  not  generally  a  lien  upon  it ;  and  even  a  mortgage  given 
ut  the  time  of  the  purchase  by  him  for  the  purchase  money  would 
nc)t  be  atVeeted  by  it ;  and  upon  the  foreclosure  of  such  a  mort- 
gage, though  the  judgment  creditor  be  not  made  a  party  to  the 
suit,  if  the  property  sell  for  less  than  the  mortgage  debt,  the  pur- 
chaser obtains  a  valid  and  irredeemable  title.^ 

1437.  Judgment  after  decree.  —  A  creditor  having  a  judg- 
ment rendered  before  the  sale,  but  subsequent  to  the  decree,  may 
redeem  at  any  time  before  the  sale  by  virtue  of  his  lien.  But 
after  the  sale  the  right  is  as  effectually  barred  as  if  the  creditor 
had  been  made  a  party  to  the  proceeding.  Neither  has  such 
creditor  any  right  to  come  in  by  petition,  and  make  defence  to 
the  suit.* 

A  creditor  holding  a  judgment  rendered  prior  to  the  mortgage 
is  not  a  proper  party  to  a  suit  to  foreclose  it.^ 

1438.  Bankrupt.  — If  the  owner  of  the  equity  of  redemption 
becomes  bankrupt,  and  his  estate  is  assigned  under  the  law,  he 
should  not  generally  be  made  a  party,  for  he  has  no  longer  any 
right  of  redemption  in  it,  but  his  assignee  should  be  made  a  party 
in  his  place.^  If  the  bankruptcy  occur  after  the  foreclosure  suit 
has  been  commenced,  he  should  suggest  his  bankruptcy  and  move 
for  a  continuance  of  the  suit,  to  await  the  termination  of  the  pro- 
ceedings in  bankruptcy,  when  he  may  plead  his  discharge  if  any 
judgment  is  sought  on  his  personal  liability.  The  assignee  may, 
however,  appear  and  allow  the  proceedings  to  go  on,  so  far  as  the 
foreclosure  and  sale  of  the  property  is  coucerned.  But  unless  the 
proceedings  are  continued  in  the  state  court  upon  motion,  or  are 
restrained  by  the  bankruptcy  court,  they  may  proceed  to  judg- 
ment and  sale." 

1  Lyon  I'.  Sanford,  5  Conn.  544.  See,  ^  Hendry  v.  Qiiinan,  4  Ilalst.  (N.  J.)  534. 
also,  Carter  v.  Champion,  8  Conn.  549.  •=  See  §§  1231-1236;  Kerrick  y.  Saffcry, 
Contra,  see  Nichols  v.  Ilolgate,  2  Aik.  7  Sim.  317  ;  Lloyd  v.  Lander,  5  Mad.  282; 
(Vt.)  138.  Itichards  v.  Cooper,  5  Beav.  304;  Anon. 

2  Bullard  v.  Lcath,  27  Vt.  491.  10  Paige  (N.  Y.),  20;  Willink  v.  Morris 
8  De  Saussure  v.  Bollman,  7  S.  C.  329.  Canal  &  Banking  Co.  3  Green's  Ch.  (N. 
*  People's    Bank    i;.    Hamilton    Manuf.     J.)  377. 

Co.  10  Paige  (N.  Y.),  481.  '  Eyster  v.  Gaff,  U.  S.  S.  Ct.  13  Albany 

400 


WHO    ARE   NECESSARY   OR   PROPER   PARTIES.  [§  1439. 

1439.  Prior  parties.  —  Persons  having  interests  in  tlie  prop- 
erty prior  to  the  mortgage  sought  to  be  foreclosed  are  neither 
necessary  nor  proper  parties  to  the  suit ;  because  the  only  proper 
object  of  the  proceedings  is  to  bar  all  rights  subsequent  to  the 
mortgage.  The  decree  can  have  no  effect  upon  the  rights  of 
parties  having  priority,  whether  they  are  made  parties  to  the  ac- 
tion or  not.^ 

In  some  cases  prior  mortgagees  are  made  parties  to  the  bill,  so 
that  the  court  may  with  their  consent  order  a  sale  of  the  whole 
estate,  and  thus  make  a  good  and  complete  title  in  the  purchaser.^ 
Sometimes  a  prior  mortgagee  is  made  a  party  to  the  suit,  with  a 
view  to  his  assenting  to  a  decree  for  the  sale  of  the  whole  estate, 
in  which  case  his  mortgage  is  first  paid,  and  the  proceeds  then 
applied  to  the  second  mortgage.^  But  it  is  proper  to  make  the 
person  who  holds  the  prior  legal  title  a  party  only  when  his  debt 
is  payable,  and  he  is  willing  to  receive  payment,  and  for  the  pur- 
pose of  making  a  sale  of  the  whole  title.  He  is  not  a  necessary 
party  except  for  such  a  decree.*     The  court  may  order  a  sale  sub- 


Law  J.  272 ;  Lenihan  v.  Hamann,  55  N. 
Y.  652 ;  Cleveland  v.  Boerum,  23  Barb. 
(N.  Y.)  201. 

1  See   §   1440;   Rose  v.  Page,  2   Sim. 
471 ;  Shepherd  v.  Gwinnet,  3  Swanst.  151 ; 
Richards  v.  Cooper,  5  Beav.  304  ;  Dela- 
bere  v.  Norwood,  3  Swanst.  144,  n. ;  Jer- 
ome V.  McCarter,  94  U.  S.  734  ;  Weed  v. 
Beebe,  21  Vt.  499  ;  Strobe  v.  Downer,  13 
Wis.  10;  Walker  v.  Jarvis,  16   Wis.  28; 
Wakeman  v.  Grover,  4  Paige  (N.  Y.),  23; 
Eagle  Fire  Co.  iv  Lent,  6  Paige  (N.  Y.), 
637;  Lewis  v.   Smith.  11    Barb.   (N.  Y.) 
152  ;   S.  C.  9  N.  Y.  502  ;  Kay  v.  Whit- 
taker,  44   N.  Y.  565  ;    Hancock   v.  Han- 
cock, 22  N.  Y.  568  ;  Brundage  v.  Domestic 
&  For.  Mis8.  Soc.  60  Barb.  (N.  Y.)  204; 
Hoppock  V.  Rumsey,  28   N.  J.  Eq.  413; 
I'ost  V.  Mackull,  3  Bland  (Md.),495  ;  Hull 
r.  Hall,  II   Tex.  547  ;  Tome  v.  Loan  Co. 
34  Md.  12;  Bogey  v.  Shute,  4  Jones  Eq. 
(N.  C.)  174;  Young  v.  R.  R.  Co.  3   Am. 
L.  T.  R.  (N.  S.)  91  ;  Hagan  v.  Walker,  14 
How.  37  ;  Summers  v.  Bromley,  28  Mich. 
125  ;  Wurcherer  v.  Hewitt,  lit  Mich.  453  ; 
Comstock  V.  Comstock,  24  Mich.  39  ;  Put- 
ti»on   V.    Shaw,   6   Ind.   377 ;    Wright  v. 
VOL.  II.  20 


Bundy,  11  Ind.  398  ;  Murphy  i'.  Farwell, 
9  Wis.  102.  See,  however,  contrary  to 
authority,  Standish  v.  Dow,  21  Iowa,  363 ; 
Heimstreet  v.  Winnie,  10  Iowa,  4.30  ;  Mor- 
ris V.  Wheeler,  45  N.  Y.  708.  The  latter 
case  in  direct  conflict  with  other  decisions 
of  the  same  court. 

2  Champlin  v.  Foster,  7  B.  Mon.  (Ky.) 
104  ;  Clark  v.  Prentice,  3  Dana  (Ky.),  468. 
In  this  case  the  court  say  that  the  interest 
of  the  mortgagor  and  of  the  mortgagee,  as 
well  as  the  security  of  purchasers,  renders 
this  the  proper  course ;  that  if  each  of 
several  successive  mortgagees  could  have 
a  decree  and  sale,  there  would  be  no  con- 
fidence in  judicial  sales.  Persons  v.  Al- 
sip,  2  Ind.  67  ;  Troth  v.  Hunt,  8  Blackf 
580. 

*  Vandcrkcmp  v.  ShelKtn,  II  Paige  (N. 
Y.),  28;  Ducker  i-.  Belt,  3  Md.  Ch.  13  ; 
Rucks  V.  Taylor,  49  Miss.  552  ;  Miller  v. 
Finn,  1  Neb.  254. 

■•  Jerome  v.  McCarter,  94  U.  S.  734  ; 
Hiigan  V.  Walker,  14  How.  ( U.  S.J  37. 
In  this  ca.se  Judge  Curtis  explains  and 
limits  the  statement  of  Chief  Justice  Mar- 
shall in  Finley  v.  Bank   of   the    United 

401 


§  1409.]  OF    PAUTII'S    DKKKNDANT. 

]oct  to  a  prior  incuinbrance ;  and  unless  tlio  mortgagee  with 
paranioimt  title  expressly  consents  to  a  sale  of  the  mortgaged 
estate,  the  sale  must  be  made  subject  to  his  mortgage  ;^  and  no 
portion  of  the  proceeds  of  the  sale  can  be  appjied  in  payment 
thereof."'^ 

If  a  sale  of  the  entire  property  be  decreed  in  a  suit  to  which 
the  senior  mortgagee  is  not  a  party,  he  may  enjoin  the  execution 
of  the  decree  ;  ^  though  in  such  case  the  decree  would  be  void  so 
far  as  it  might  affect  his  rights. 

When  one  is  made  a  party  to  a  foreclosure  suit  as  the  holder 
of  a  subsequent  mortgage,  and  such  party  is  also  the  owner  of 
mortgages  prior  to  that  of  the  plaintiff,  he  may  answer  in  the 
action  and  ask  to  have  such  prior  mortgages  paid  out  of  the  pro- 
ceeds of  sale  before  applying  any  portion  thereof  to  the  satisfac- 
tion of  the  plaintiff's  mortgage.^ 

When  a  subsequent  mortgagee  makes  a  prior  mortgagee  a  party 
to  the  suit,  as  well  as  the  owner  of  the  equity,  his  proceeding,  so 
far  as  the  former  is  concerned,  becomes  a  bill  to  redeem.^  The 
prior  mortgage  stands  unaffected  by  the  proceeding,  although  the 
holder  of  it  suffers  default,^  and  may  be  foreclosed  against  one 
who  purchases  at  the  foreclosure  sale  under  the  junior  mortgage.^ 
A  prior  judgment  lien  stands  unaffected  in  the  same  way,  although 
the  creditor  was  made  a  party  to  the  suit  to  foreclose  a  junior 
mortgage.^ 

On  the  same  principle  in  a  suit  to  foreclose  a  mortgage  made  of 
a  title  bond,  the  vendor  is  not  a  proper  party.  He  cannot  be 
affected  by  the  decree.^     A  prior  mortgagee  cannot  properly  be 

States,  11  Wheat.  306,  that  the  prior  mort-  clow  v.  Cassedy,  26  N.  J.  Eij.  557  ;  Potts 

gagce  is   a  necessary   party.       And    see  v.'N.  J.  Arms  Co.  17  lb.  518;  Gilion  v. 

White  V.  Ilolman,  32  Ark.  753.  Belleville  Co.  3  Halst.  (N.  J.)  Ch.  536. 

1  Lan-:ton  i,-.  Langton,  7  De  G.,  M.  &  G.  2  Bache  v.  Doscher,  67  N.  Y.  429 ;  Erni- 
30.     In  Eti^^land  the  practice  upon  a  sale  grant  Industrial  Saving.s  Bank  v.  Goldman 
under  a  subsequent  mortgage  is  to  make  (Court  of  Appeals,  N.  Y.  Nov.  1878),  19 
the   mortgagee    with    paramount   title  a  Alb.  L.  J.  159. 
party  to  the  suit,  if  it  is  desired  to  sell  the  ^  Rucks  v.  Taylor,  49  Miss.  .552. 
whole  estate,  when  he  is  required  to  con-  *  Doctor  v.  Smith,  10  Ilun  (N.  Y.),  245. 
sent  to  such  sale,  or  to  refuse  it  at  once ;  *  Hudnit  v.  Nash,  16  N.  J.  Eq.  550. 
and  then  if  he  concurs,  a  sale  of  the  whole  *>  Straight  v.  Harris,  14  Wis.  509  ;  Daw- 
estate  is  decreed  ;  otherwise  the  decree  is  son  v.  Danbury  Bank,  15  Mich.  489. 
for  a  sale  subject  to  his  security.     Wick-  ^  Williamson  v.  Probasco,  4  Halst.  (N. 
enden  v.  Rayson,  6  De  G.,  M.  &  G.  210.  J.)  Ch.  571. 
See,  also,  Dclabere  i-.  Norwood,  3  Sw.  144,  **  Frost  v.  Koon,  30  N.  Y.  428. 
n. ;  Parker  v.  Fuller,  1  R.  &  M.  656  ;  Big-  »  Pridgen  v.  Andrews,  7  Tex.  461. 
402 


WHO  ARE  NECESSARY  OR  PROPER  PARTIES.     [§  1440. 

made  a  party  to  a  bill  to  enforce  a  mechanic's  lien  ;  and  if  made 
a  party  and  a  decree  be  taken  against  him  by  default,  it  will  be 
set  aside. ^ 

The  usual  pi'actice  of  courts  of  equity,  in  cases  where  persons 
claiming  adversely  to  the  mortgagor  have  been  improperly  made 
defendants,  is  to  order  the  action  to  be  dismissed  as  to  such  de- 
fendants, without  prejudice  to  the  plaintiff's  rights  in  any  other 
proceeding.^ 

With  the  consent  of  the  prior  mortgagee  who  has  brought  a 
foreclosure  suit,  a  subsequent  mortgagee  may  file  a  cross-bill  for 
the  foreclosure  of  his  mortgage,  and  the  mortgagor  cannot  ob- 
ject, as  it  can  work  no  injury  to  him.^ 

1440.  Adverse  claimants  cannot  be  made  parties  to  a  fore- 
closure suit  for  the  purpose  of  litigating  their  titles.  The  only 
proper  parties  are  the  mortgagor  and  mortgagee,  and  those  who 
have  acquired  any  interests  from  them  subsequently  to  the  mort- 
gage. An  adverse  claimant  is  a  stranger  to  the  mortgage  and 
the  estate.  His  interests  can  in  no  way  be  affected  by  the  suit, 
and  he  has  no  interest  in  it.  There  being  no  privity  between  him 
and  the  mortgagee,  the  latter  cannot  make  him  a  party  defend- 
ant for  the  purpose  of  trying  his  adverse  claim  in  the  foreclosure 
suit.'*  A  bill  which  makes  defendants  persons  who  claim  title 
adversely  for  the  purpose  of  litigating  and  settling  their  rights, 
is  bad  for  misjoinder  and  for  multifariousness.^  One  who  claims 
under  a  tax  title  which  became  a  lien  after  the  mortgage    is  a 

1  Smith  V.  Schafft-r,  4G  Md.  573.  chanics'  Bank  v.  Bronson,  14  Mich.  .361  ; 

*  Corning  v.  Smith,  6  N.  Y.  82;  Ban-  Horton  v.  Ingersoll,  13  Mich.  409;  Cham- 
ning  V.  Bradford,  21  Minn.  308.  See,  berlain  r.  Lyell,  3  Mich.  448;  Banning  y. 
also,  Wilkinson  v.  Daniels,  1  Greene  Bradford,  21  Minn.  308;  Newman  i».  Home 
(Iowa),  179.  Ins.  Co.  20  Minn.  422;   San  Francisco  v. 

But  without  dismissing  them,  their  ad-  Lawton,  ISCal.  46.");  Bogey  v.   Shute,  4 

verse  rights  may  be  expressly  saved  in  the  Jones  (N.  C),  Eq.  174 ;  Pelton  v.  Farmin, 

decree.     San  Francisco  v.  Lawton,  18  Cal.  18  Wis.  222;    Langc  v.  Jones,   5   Leigh 

46.'>.  (Vh.),  192;  Lyman  v.  Little,  l.")  Vt.  .')76 ; 

»  Crocker  v.  Lowenthal,  83  111.  579.  Comlcy  v.  Hendricks,  8  Blackf.  (Ind.)  189; 

*  §  1445 ;  Frost  v.  Koon,  30  N.  Y.  428 ;  Pattison  v.  Shaw,  6  Ind.  377  ;  Brundago 
Merchants'  Bank  v.  Thomson,  55  N.  Y.  v.  Domestic  &  Foreign  Missionary  Soc. 
7  ;  Ixiwis  r.  Smith,  9  \.  Y.  502  ;  Jones  v.  60  Barb.  (N.  Y.)  204  ;  Crtigan  v.  Minor,  6 
St.  John,  4  Sandf.  (N.  Y.)  Ch.  208  ;  Cor-  Cent.  L.  J.  354  ;  Dial  v.  Reynolds,  96  U. 
ning  r.  Smith,  G  N.  Y.  82  ;  Kagle  Fire  Co.  S.  340  ;  Peters  v.  Bowman  (U.  S.  Supremo 
V.  Ixsnt.  6  Paige  (N.  Y.),  635  ;  Uolromb  v.  Ct.  1878),  11  Chicago  L.  N.  IIS;  17  Al- 
Holcomb,  2  Barb.  (N.  Y.)  20  ;  Wilkinson  bany  L.  J.  132. 

Green,  34  Mich.  221  ;  Farmers'  &  Me-        '  Dial  v.  RcynoUH,  sitjira. 

403 


§  1440.]  OF    PARTIKS   DEFENDANT. 

proper  jnirty,  as  the  oluiin  is  in;ulo  for  an  interest  in  the  equity  of 
redemption;^  but  one  elainiing  under  a  tax  deed  as  a  j)araniount 
title  is  not  a  proper  party. ^  Where  the  description  in  the  mort- 
gage is  erroneous,  in  a  bill  to  foreclose  it,  a  person  who  owns 
lands  whieh  would  be  alTected  by  the  erroneous  description  is  not 
a  proper  party,  when  it  appears  that  he  was  never  interested  in 
any  portion  of  the  premises  identified  by  proof  to  be  those  really 
mortgaged.'^  The  holder  of  the  subsequent  mortgage  in  foreclos- 
ing it  cannot  make  one  claiming  adversely  to  the  mortgagor's  title 
a  defendant,  for  the  purpose  of  trying  the  validity  of  the  adverse 
claim.* 

Whether  an  asserted  claim  is  such  an  adverse  one  as  to  come 
within  the  rule  depends  not  upon  what  is  set  up  in  the  answer  in 
regard  to  it,  but  upon  the  allegations  of  the  bill  and  upon  the  tes- 
timony in  the  case  as  to  the  nature  of  the  alleged  adverse  claim. 
Should  it  appear  that  a  defendant  has  a  legal  title  which,  if  valid, 
is  adverse  and  paramount  to  the  claim  of  both  mortgagor  and 
mortgagee,  then  neither  is  the  foreclosure  suit  a  suitable  proceed- 
ing, nor  a  court  of  equity  the  appropriate  tribunal,  in  which  to 
settle  the  question.^ 

But  a  subsequent  purchaser  who  has  procured  releases  from  a 
former  owner  merely  to  perfect  his  title  of  record,  and  under  such 
circumstances  as  would  render  it  fraudulent  for  him  to  set  up  such 
conveyances  as  a  title  adverse  and  paramount  to  that  of  the  mort- 
gagor, may,  under  proper  allegations,  be  made  a  party  to  the  bill 
for  foreclosure,  and  his  title  may  in  such  suit  be  declared  null  and 
void.^ 

It  has  been  claimed,  however,  that  when  one  has  been  made  a 
defendant  in  a  foreclosure  suit  and  has  set  up  by  answer  a  para- 
mount title,  and  without  objections  has  gone  to  trial  upon  that 
issue,  he  cannot,  if  beaten,  ask  a  reversal  on  the  ground  that  the 
issue  was  not  properly  triable  in  that  action.^  But  the  authorities 
do  not  sustain  this  view.  All  the  title  a  mortgagee  can  obtain  by 
foreclosure  is  the  title  of  his  mortgagor,  and  that  is  the  only  title 
that  can  Ije  considered  in  the  foreclosure  suit.^ 

1  Horton  v.  Ingersoll,  13  Mich.  409.  6  Wilkinson  v.  Green,  34  Mich.  221  j 

2  Roberts  V.  Wood,  38  Wis.  60.  Summers  v.  Bromley,  28  Mich.  126. 
8  Ramsdell  v.  Eaton,  12  Mich.  117.  c  Wilkinson  v.  Green,  supra. 

*  Corning  v.  Smith,  6  N.  Y.  82  ;  Palmer         '  Bradley  v.  Parkhurst,  20  Kans.  462. 
V.  Yager,  20  Wis.  91.  »  Per  Horton,  C.  J.,  in  Bradley  v.  Park- 

hurst, supra. 

404 


WHO   ARE  NECESSARY   OR   PROPER   PARTIES.  [§  1441. 

1441.  Priority  between  mortgages.  —  It  has  been  held,  how- 
ever, that  a  question  of  priority  between  mortgages  may  be  settled 
in  a  foreclosure  suit  upon  a  first  mortgage,  by  allowing  the  second 
mortgagee  to  intervene  and  set  up  the  statute  of  limitations  as  a 
bar  to  the  mortgage  upon  which  suit  was  brought ;  ^  and  in  like 
manner  judgment  creditors  have  been  allowed  to  intervene  and 
contest  the  validity  of  a  mortgage ;  2  and  a  junior  mortgagee 
might  perhaps  be  allowed  to  make  a  prior  mortgagee  a  party  to 
the  suit  upon  special  allegations  of  facts,  which  would  give  him 
equitable  precedence,  or  would  put  the  validity  of  the  prior  mort- 
gage in  issue.^ 

As  already  noticed,  it  is  a  rule  of  equity  adopted  also  in  the 
several  codes,  that  additional  parties  may  be  brought  in  when  a 
complete  determination  of  the  controversy  cannot  be  had  without 
their  presence.  The  application  may  be  made  either  by  the  plain- 
tiff or  defendant ;  though  practically  it  is  generally  made  by  the 
former.  But  the  court  may  of  its  own  motion  order  in  additional 
parties  when  without  them  its  decree  would  be  ineffectual  and 
incomplete.'^  Furthermore,  in  the  progress  of  the"  suit  a  third  per- 
son who  has  an  interest  in  the  matter  of  the  suit  may,  on  his  own 
application,  be  made  a  party .^  In  lowa^  and  California'  it  is 
provided  tliat  any  person  having  an  interest  in  the  matter  in  liti- 
gation may  of  right  intervene  by  petition  and  become  a  litigant 
party.  He  may  act  with  either  party  to  the  suit  or  adversely  to 
both.  This  system  is  an  innovation  upon  the  established  prin- 
ciples of  equity. 

In  the  last  named  state,  in  an  action  to  foreclose  a  mortgage 
given  by  a  corporation  which  had  become  insolvent,  certain  judg- 
ment creditors  alleging  fraud  in  the  execution  of  the  mortgage  and 
that  it  was  void  against  the  creditors  were  allowed  to  intervene.^ 

1  Lord  i;.  Morris,  18  Cal.  482.  must  ol)tain  leave  of  court  to  file  his  peti- 

'  Union  Bank  at  Massilion  v.  Bell,  14  tion. 

Ohio  St.  200.  '  Slich  v.  Dickinson,  38  Cal.  G08.     Mr. 

»  Dawson  v.  Danhury  Bank,  15  Mich.  Justice  Crockett  said  :  "  The  subject  raat- 

;■.(,.  ter  of  the  litigation  is  the  note  and  inort- 

♦  Ix;onard  v.  Groome,  47  Md.  499.  gage,  and  the  right  of  the  plaintiff  to  have 

*  Dodge  V.  Fuller,  28  N.  J.  E(|.  578.  a  decree  of  foreclosure  and  sale.     The  in- 

•  Code  of  Iowa,  1873,  §§  208.1-2685.  tervenor  claims   as   against    the  plaintiff 
T  Code  Civil  Proced.  of  California,  1872,  that  he  and  not  the  plaintiff  is  entitled  to 

§387.     In  the  latter  state  the  iutervenor     the  decree  of  foreclosure;  and  as  against 

the  defendant,  that  the  mortgage  debt  is 

406 


§  1442.]  OF   PARTIES   DEFENDANT. 

So  in  ;iu  action  hroiiglit  to  foreclose  ii  mortgage  which  was  barred 
bv  the  statute  of  liniitations,  a  subsequent  incumbrancer  was  al- 
lowed to  intervene  and  set  up  the  statute  as  a  defence.^  In  an 
action  to  foreclose  a  mortgage  on  a  homestead  the  mortgagor's 
wife  was  allowed  to  intervene.^ 

1442.  New  parties  who  were  found  to  have  an  interest  in  the 
premises  may  be  joined  in  the  bill  or  in  a  supplemental  one,  if 
application  be  made  within  a  reasonable  time.^  A  suit  may  be 
stayed  even  on  final  hearing  to  bring  in  subsequent  mortgagees 
and  incumbrancers  who  are  found  to  be  proper  parties.  It  is  not 
only  a  detriment  to  the  complainant,  but  unjust  to  all  other  per- 
sons interested  in  the  proceeds  of  the  sale,  to  allow  this  to  be  made 
subject  to  an  outstanding  right  to  redeem,  for  that  invariably  prej- 
udices the  sale.*  The  want  of  necessary  parties  may  bo  objected 
to  by  demurrer  when  the  defect  appears  upon  the  face  of  the  bill ; 
otherwise  objection  may  be  taken  by  answer.^  The  mortgagor 
having  an  interest  in  the  sale,  by  reason  of  his  personal  liability 
for  the  debt,  may  object  to  the  omission  of  parties  necessary  to 
the  making  of  a  perfect  title.^  Those  who  have  acquired  liens 
upon  the  mortgaged  property  during  the  pendency  of  the  fore- 
closure suit,  if  not  allowed  to  interpose  a  defence  in  the  name  of 
the  defendant,  can  only  make  themselves  parties  to  the  suit  by 
filing  a  bill  to  protect  their  rights.'^  After  adding  new  parties, 
the  statutory  notice  of  lis  pendens  should  be  made  to  conform  to 
the  amended  bill.^ 

When  a  person  made  a  party  to  the  suit,  on  the  supposition  that 
he  had  some  interest  in  the  premises  subject  to  the  mortgage' 
claims  no  such  interest,  he  should  make  a  disclaimer  and  have 
the  suit  dismissed  as  to  himself,^ 

due  and  unpaid,  and  that  he  is  entitled  to  bama  this  may  be  done  by  petition  even 

a  foreclosure.     In  this  case  the  intervener  after  decree  and  sale.    Glidden  v.  Andrews, 

claims  the  demand  in  suit,  viz.,  the  note  G  Ala.  190. 

and   mortgage,  and   we   can  perceive  no         *  Gould  v.  Wheeler,  28  N.  J.  Eq.  541. 
reason  founded  on  the  policy  of  the  law         ^  Morris  v.  Wheeler,  45  N.  Y.  708. 
which  should  preclude  the  settlement  of         "^  Hall  v.  Nelson,   14  How.  (N.  Y.)  Pr. 

the  whole  controversy  in  one  action."  32  ;  Morris  v.  Wheeler,  supra. 

1  Coster  V.  Brown,  23  Cal.  142  ;  Lord         ^  People's    Bank    v.  Hamilton   Manuf. 
V.  Morris,  18  Cal.  482.  Co.  10  Paige  (N.  Y.),  481. 

2  Sargent  i-.  Wilson,  5  Cal.  504  ;  Moss         «  Clark  v.  Havens,  Clarke  (N.  Y.)  Ch. 
V.  Warner,  10  Cal.  296.  560. 

8  Heyman  v.  Lowell,  23  Cal.  106.     See,         »  Pelton  v.  Farmin,  18  Wis.  222. 
also,  Jones  v.  Porter,  23  Ind.  66.     In  Ala- 

406 


WHO   ARE   NECESSARY   OR   PROPER   PARTIES.  [§  1442. 

If  a  defendant  be  found  to  be  an  infant,  a  guardian  ad  litem 
should  be  appointed,  though  if  process  be  served  upon  the  infant 
■without  the  appointment  of  a  guardian,  and  judgment  be  taken 
by  default,  the  judgment  is  not  void  but  voidable.^ 

1  McMurray  v.  McMurray,  66  N.  Y.  175, 

407 


CHAPTER   XXXII. 

FOEECLOSURE   BY   EQUITABLE    SUIT. 

I.   Jurisdiction,   and  the  object  of   the  I    II.    The  bill  or  complaint,  1451-1478. 
suit,  1443-1450.  I  III.   The  answer  and  defence,  1479-1575. 

1.    Jurisdiction,  and  the  Object  of  the  Suit. 

1443.  Jurisdiction.  —  Courts  of  equity  have  inherent  original 
jnrisiliction  of  the  subject  of  mortgages  both  for  the  foreclosure 
and  redemption  of  them.  Redemption  is  purely  a  matter  of 
equity,  and  the  only  remedy  is  here.  Although  other  remedies 
are  used  for  the  foreclosure  of  mortgages  under  different  systems 
of  law  and  practice  adopted  in  different  states,  yet  generally  courts 
of  equity  are  not  deprived  of  jurisdiction  by  the  existence  of 
other  remedies.  In  many  states,  as  already  seen,  jurisdiction  in 
equity  of  the  foreclosure  of  mortgages  is  expressly  conferred  by 
statute.^  When  provisions  in  detail  are  made  on  this  subject, 
they  are  generally  founded  upon  principles  and  rules  of  practice 
already  established  by  courts  of  equity  under  the  general  jurisdic- 
tion they  have  always  exercised  of  the  subject ;  and  the  powers  of 
these  courts  are  only  enlarged  and  defined  by  the  statutes.  But 
even  where  systems  of  foreclosure  not  derived  directly  from  chan- 
cer}' courts  have  been  adopted,  courts  of  equity,  where  they  have 
not  been  superseded  by  codes  of  practice  which  do  away  with  all 
distinctions  between  actions  at  law  and  in  equity,  still  have  con- 
current jurisdiction  of  the  subject  and  are  resorted  to,  if  not  gen- 
erally, then  in  particular  instances,  for  the  reason  that  they  afford 
a  more  complete  and  certain  remedy.^  Even  the  peculiar  statutory 
mortgage  of  Louisiana,  which  is  a  public  act  before  a  notary  pub- 
lic, and  imports  a  confession  of  judgment,  and  under  the  statutes 

1  See  chapter  xxx  ;  Byron  v.  May,  2  ^  Shaw  v.  Norfolk  Co.  II.  R.  Co.  5  Gray 

Chand.  (Wis.)  10.3  ;   State  Bank  of  111.  v.  (Mass.),  162  ;  McCurdy's  Appeal,  65  Pa. 

Wilson,  9  111.  57;  Warehime  v.  Carroll  St.  290;   McElrath  v.  Pittsburg  &  Steu- 

Co.  Build.  Asso.  44  Md.  512.  benville  R.  R.  Co.  55  Pa.  St.  189. 
408 


JURISDICTION,    AKD   THE    OBJECT    OF   THE   SUIT.        [§  1444. 

of  that  state  is  enforced  at  law  by  a  writ  of  seizure  and  sale,  may 
be  foreclosed  in  a  court  of  the  United  States  having  jurisdiction  of 
the  case  by  a  bill  in  equity.^ 

Although  the  mortgage  contains  a  power  of  sale,  courts  of  chan- 
cery are  not  generally  deprived  of  their  jurisdiction  to  foreclose 
it.2  It  has  been  stated  as  a  reason  why  jurisdiction  in  equity 
should  be  retained  in  such  cases,  that  a  mortgagee  may  be  inca- 
pable of  purchasing  at  his  own  sale  under  the  power,^  though  he 
may  at  a  sale  made  by  an  officer  under  a  judgment  or  decree. 
Neither  does  the  fact  that  there  is  a  statutory  remedy  oust  the 
jurisdiction  of  a  court  of  equity  to  enforce  a  mortgage.^ 

One  result  of  the  equitable  character  of  the  statutory  processes 
for  enforcing  mortgages  is,  that  the  parties  have  no  right  to  have 
the  issues  tried  by  a  jury;  although  the  court  may  in  its  discre- 
tion call  in  the  aid  of  a  jury  in  any  case.^ 

1444.  Venue.  —  Actions  for  foreclosure  of  mortgages  are  gen- 
erally required  by  statute  to  be  brought  in  the  county  where  the 
mortgaged  premises  or  some  part  thereof  are  situated.  But  aside 
from  this  requirement,  it  is  not  a  local  action  but  transitory,  and  a 
bill  may  be  brought  wherever  there  is  jurisdiction  of  the  pai'ties. 
The  title  to  the  land  cannot  be  investigated.^  The  courts  in  Eng- 
land regard  the  right  to  redeem  as  a  mere  personal  right,  and  not 
as  an  estate  in  a  proper  technical  legal  sense,  and  on  this  ground 
take  jurisdiction  there  of  the  foreclosure  of  land  situated  in  the  col- 
onies, when  they  have  jurisdiction  of  the  parties.  In  those  states 
in  this  country  where  the  mortgage  is  considered  a  mere  lien,  and 
the  legal  estate  as  remaining  in  the  mortgagor,  the  decree  oper- 
ates either  to  deprive  the  mortgagor  of  that  estate,  by  vesting  it 
in  the  mortgagee  as  by  strict  foreclosure,  or  by  sale  to  convey  it 

1  Benjamin  v.  Cavaroc,  2  Woods,  168.  8  Paget  v.  Edc,  L.  11.  18  Eq.  118 ;  Tol- 

2  Walton  r.  Dody,  1  Wi.s.  420;  Byron  ler  v.  Carteret,  2  Vern.  494;  Broome  v. 
V.  May,  2  Chand.  (Wis.)  10.3;  Carradine  Beers,  6  Conn.  198-207;  Palmer  v.  Mead, 
V.  O'Connor,  21  Ala.  ."iT.S  ;  Alabama  Life  7  Conn.  149,  157  ;  Kinney  v.  McClcod,  9 
Ins.  Co.  V.  Petlway.  24  Ala.  .')44  ;  iMorri-  Tex.  78 ;  Caufman  v.  Sayre,  2  B.  Mon. 
son  V.  Bean,  15  Tex.  207;  Warehime  v.  202;  Owings  y.  Bcall,  3  Litt.  (Ky.)  10.3; 
Carroll  Co.  Build.  Assoc.  44  Md.  512.  Grace  v.  Hunt,  Cooke  (Tcnn.),  341  ;  Cole 

'  Marriott  i-.  Givens,  8  Ala.  094;   Mc-  v.    Conner,    10   Iowa,   299;    Finnagan  i;. 

Gowan  r.  Branch  Bank  of  Mobile,  7  Ala.  Manchester,  12  Iowa,  521  ;  and  see  Varian 

823.  V.  Stevens,  2  Diier  (N.  Y.),  635  ;  Porter  v. 

*  Benjamin  r.  Cavaroc,  2  Woods,  108.  Lord,   4   lb.   082;    Bates  u.  Ileynolds,    7 

*  Knickerbocker  Life  Ins.  Co.  v.  Nelson,  Bosw.  (N.  Y.)  685. 
8  Hun  (N.  Y.),  21. 

409 


§§  144.">,  1M(),]       FORECLOSURE    BY    EQUITABLE    SUIT. 

to  tilt'  puri'liasiM" ;  ami  lluTcforo  would  bo  rogardcd  as  a  local 
action. •  If  a  sale  of  the  property  is  asked  for,  as  this  operates  in 
ri'm,  jurisdii'tion  is  restricted  to  the  local  court  of  the  county  in 
which  the  land  lics.- 

1445.  It  is  not  proper  in  a  foreclosure  suit  to  try  a  claim 
of  title  paramount  to  that  of  the  mortgagor.  The  only  proper 
object  of  the  suit  is  to  bar  the  mortgagor  and  those  claiming 
untlcr  him.''  \Vli('ther  the  claim  of  title  be  made  under  a  convey- 
ance by  a  third  jKirty  prior  to  the  mortgage  or  subsequent  to  it, 
it  is  not  a  proper  subject  of  determination  in  a  foreclosure  suit ; 
nor  is  a  claim  under  a  conveyance  by  the  mortgagor  made  prior 
to  the  mortgage.*  Such  adverse  claims  of  title  are  generally 
matters  of  purely  legal  jurisdiction.  A  claim  under  a  tax  title 
is  one  which  cannot  be  considered  in  a  foreclosure  suit,  unless  it 
affects  the  equit}^  of  redemption.^  Even  if  a  party  having  par- 
amount title  is  made  a  party  and  a  judgment  is  entered  after  a 
hearing,  it  will  not  bind  his  interest,  but  will  be  set  aside  on 
application.^  But  questions  of  priority  of  lien  as  between  two 
mortgages  by  the  same  mortgagor  may  properly  be  determined 
in  a  foreclosure  of  one  of  them.'  Questions,  too,  of  priority  be- 
tween the  owners  of  different  parcels  of  land  mortgaged  together 
may  be  determined,  and  the  order  in  which  they  shall  be  sold 
fixed.^ 

1446.  It   is  proper  in  a  foreclosure  suit  to  determine  the 

1  Paget  V.  Edc,  L.  R.  18  Eq.  118.  ble  proceeding,  for  the  trial  of  claims  to 

2  Claufinan  v.  Sayre,  2  B.  Mon.  (Ky.)  the  legal  title  which  are  hostile  and  para- 
202.  "A  mortgagee  may  either  compel  mount  to  the  interest  and  rights  and  titles 
the  sale  of  the  estate,  in  order  to  get  the  of  both  mortgagor  and  mortgagee.  Such 
whole  of  his  money  immediately,  or  else  a  trial  will  neither  fall  in  with  the  nature 
call  upon  the  mortgagor  to  redeem  his  es-  of  the  jurisdiction,  or  the  genius  or  frame 
tate  presently,  or  in  default  thereof  to  be  of  the  particular  remedy."  See,  further, 
forever  foreclosed  from  redeeming  the  Rathbone  v.  Hooney,  58  N.  Y.  463 ;  Mer- 
same ;  and  though  in  the  latter  case  the  chants'  Bank  v.  Thomson,  55  N.  Y.  7  ; 
decree  might  be  supposed  to  properly  act  Brundage  v.  Dom.  &  For.  Miss.  Soc.  60 
on  the  person  of  the  mortgagor,  in  the  Barb.  (N.  Y.)  204.  §§  1439,  1440. 
former  case  it  acts  emphatically  on  the  *  San  Francisco  t'.  Lawton,  ISCal.  465. 
thing  mortgaged."  Owings  v.  Beall,  .3  <»  Kelsey  v.  Abbott,  13  Cal.609.  §1440. 
Litt.  (Ky.)  103;  and  see  Chadbourne  v.  »  Corning  v.  Smith,  6  N.  Y.  82  ;  Lewis 
Forster,  29  Iowa,  181.  v.  Smith,  9  N.  Y.  502. 

8  Pelton  V.  Farmin,  18  Wis.  222;  Pal-  '  Board  of  Supervisors  of  Iowa  Co.  v. 

mer  v.   Yager,  20  Wis.  91  ;   Summers  v.  Mineral  Point  R.  U.  Co.  24  Wis.  93. 

Bromley,   28   Mich.    125,   per   Graves,  J.  *  N.  Y.  Life  Ins.  &  Trust  Co.  w.  Milnor, 

"  A  court  of  equity  is  not  the  appropriate  1  Barb.  (N.  Y. )  Ch.  353. 
tribunal,  nor  is  a  foreclosure  suit  a  suita- 

410 


JURISDICTION,   AND   THE   OBJECT   OF   THE   SUIT.       [§§  1447-1-449. 

right  of  the  mortgagor  to  remove  a  building  erected  by  liim  on 
the  land  and  to  direct  that  the  land  be  sold  subject  to  such  right. 
This  is  incident  to  the  general  power  and  authority  of  the  court 
to  define  and  describe  in  its  judgment  the  propertj^  to  be  sold. 
Such  a  question  should  be  settled  before  the  sale,  so  that  the 
sheriff  may  know  what  he  is  selling,  and  the  purchaser  may  know 
what  he  is  buying.  In  the  mean  time  the  mortgagor  may  be  en- 
joined from  impairing  the  security,  by  removing  the  building, 
which  is  presumably  a  part  of  the  freehold.^ 

1447.  A  court  of  equity  wiU  prevent  an  improper  use  of 
its  process  even  in  a  legal  way,  as,  for  instance,  when  it  is  ap- 
parent that  the  object  of  the  foreclosure  suit  is  not  to  procure  the 
satisfaction  of  the  debt,  but  to  obtain  a  different  end  by  coercing 
the  owner  of  the  equity  of  redemption.  This  was  done  in  a  case 
where  a  wife  who  owned  the  fee  tendered  the  mortgagee  the 
amount  of  his  debt,  and  asked  for  an  assignment  of  the  mort- 
gage, which  he  refused  to  make,  and  the  evidence  showed  that  the 
mortgage  was  being  foreclosed  in  the  interest  of  the  husband,  in 
order  to  force  her  to  settle  a  suit  by  her  to  annul  the  marriage, 
and  litigation  was  then  pending  about  other  property.  As  a  new 
mortf-ace  could  not  be  obtained  on  account  of  the  ligitation,  the 
court  ordered  that  if  the  mortgagee  refused  to  assign  it  the  pro- 
ceedings should  be  stayed.^ 

1448.  A  trust  deed  made  for  the  security  of  all  the  cred- 
itors of  the  grantor  who  are  not  named,  and  providing  for  a  sale 
by  the  trustee  only  upon  request  made  by  a  majority  of  the  cred- 
itors, should  be  enforced  by  a  bill  in  equity  under  which  the  neces- 
sary parties  can  be  convened,  and  their  rights  ascertained  and  ad- 
ju3ted.3  The  court  will  in  any  case  undertake  the  supervision  of 
the  execution  of  the  trust.  The  decree  of  sale  should  embody  the 
provisions  of  the  deed  in  regard  to  the  sale  ;  but  these  provisions 
may  be  altered  when  necessary,  and  in  such  case  the  sale  must  be 
in  accordance  with  the  terms  of  the  decree.* 

1449.  In  the  foreclosure  of  a  title  bond  the  purchaser  is 
treated  as  a  mortgagor  for  all  purposes  of  the  suit.  The  rights  of 
the  parties  are  the  same  as  those  of  the  parties  to  a  formal  mort- 

1  Brown  v.  Keeney  Settlement  Cheese  »  Hudgins   v.   Liuiicr,  2.T  Gratt.   (Va.) 

Association,  59  N.  Y.  242.  494. 

»  Foster  v.  Hughe.s,  51  How.  (N.  Y.)  Pr.  *  Michie  v.  .Tcffrie.s,  21  Gnilt.  ( Va.)  334. 
20. 

411 


§  1450.]  FORECLOSURE   BY   EQUITARLE   SUIT. 

gage.  Poisons  intcrfstcMl  in  tlie  proporty  not  made  parties  to  the 
suit  are  not  alYcctod  hy  the  decree.^  As  in  the  case  of  the  fore- 
closure of  a  niort»;a<^e  the  jtlaintiff  may  have  judgment  for  foreclos- 
ure, and  for  the  iiuiount  due  on  the  bond  at  the  same  time.^  A 
decree  of  foreclosure  may  be  entered  under  a  prayer  for  general 
relief,  although  not  specifically  asked  for.^  A  decree  for  the.  sale 
of  the  land  described  in  the  bond,  and  payment  of  the  proceeds 
upon  the  judgment,  may  further  provide  that  upon  full  payment 
the  vendor  shall  convey  the  property  to  the  purchaser,  by  a  deed 
containing  all  covenants  stipulated  for  in  the  bond.* 

If  the  vendor  retaining  the  legal  title  assigns  a  promissory  note 
received  in  consideration  of  the  sale,  the  assignee  upon  non-pay- 
ment of  it  may  proceed  to  foreclose  in  his  own  name,  as  if  it  were 
a  mortgage  note.^ 

A  mortgage  of  a  lease  may  be  foreclosed  by  a  sale  of  the  lease. 
The  purchaser  in  such  case  becomes  an  assignee  of  the  lease  and 
term,  and  takes  subject  to  the  obligation  to  pay  rent.*' 

1450.  A  tender  of  payment  not  accepted  does  not  prevent 
the  mortgagee's  proceeding  with  a  bill  to  foreclose.'^  There  may 
be  questions  as  to  the  amount  due  on  the  mortgage,  and  these  can 
be  settled  and  the  mortgage  enforced  for  what  is  actually  due 
only  by  a  foreclosure  suit.  Even  the  pendency  of  a  bill  by  the 
mortgagor  to  redeem  does  not  suspend  the  right  to  foreclose.  The 
mortgagor,  notwithstanding  a  decree  for  redemption,  may  make 
default  when  the  actual  time  for  payment  arrives.^  In  a  fore- 
closure suit,  however,  the  mortgagor  is  bound  to  pay  the  sum  that 
shall  be  found  due,  or  else  to  stand  foreclosed  of  his  right  of  re- 
demption. Until  the  mortgage  debt  is  actually  paid  off  the  mort- 
gagee retains  all  the  rights  and  remedies  incident  to  his  mortgage. 
By  statute,  however,  in  some  states,  a  bill  must  be  dismissed  upon 
the  defendant's  bringing  into  court  at  any  time  before  the  decree 
of  sale  the  principal  and  interest  due  with  .costs.^     Should  there 

1  Dukes  V.  Turner,  44  Iowa,  575.  ^  Dudley  v.  Grissler,  58  N.  Y.  323  ;  Cat- 

2  Mullin   V.    Bloomer,    11    Iowa,   360;  lin  v.  Grissler,  57  N.  Y.  363 ;  Graham  v. 
Merritt  v.  Judd,   14  Cal.  59  ;  Kiernan  v.  Bleakie,  2  Daly  (N.  Y.),  55. 
Blackwell,    27    Ark.    235;     Hartman    v.  ^  gee  §§  886-893. 

Clarke,    11  Iowa,  510;   and  see  Lewis  i;.  ^  Grnj^eon  v.  Gerrard,  4  Y.  &  C.  119. 

Boskins,  27  Ark.  61.  ^  As  in  New  York:  see  Allen  d.  Malcolm, 

8  Herring  v.  Neely,  43  Iowa,  157.  12  Abb.  (N.  Y.)  Pr.  N.  S.  335  ;  Hartley  v. 

*  Wall  V.  Ambler,  11  Iowa,  274.     §  235.  Tatham,  1  Keyes  (N.  Y.),  222  ;  Kortright 

6  Blair  v.  Marsh,  8  Iowa,  144.  v.  Cady,  21  N.  Y.  343. 

•412 


THE  BILL   OR   COMPLAINT.  [§  1451. 

be  a  disagreement  as  to  costs,  the  party  making  the  tender  may 
apply  to  the  court  for  directions  as  to  the  amount  of  them.^  Al- 
though the  tender  should  properly  be  brought  into  court,  an  irreg- 
ularity in  this  respect  will  be  considered  waived  if  the  answer  of 
the  defendant  making  the  tender  be  accepted  and  acted  upon 
without  objection.- 

It  has  been  observed  in  a  former  chapter  that  in  several  states 
a  tender  of  the  amount  due  on  a  mortgage  discharges  the  lien, 
but  does  not  discharge  the  debt.  The  consequence  of  this  doctrine 
is,  that  upon  proof  of  a  tender  of  the  debt  together  with  any  costs 
incurred  at  the  time,  an  action  for  foreclosure  will  be  defeated  ; 
but  as  the  debt  is  not  discharged  a  judgment  for  that  may  still  be 
entered  and  enforced  ;  ^  or  where  the  law  and  equity  systems  are 
distinct  an  action  at  law  may  be  maintained  upon  the  debt.* 

2.   The  Bill  or  Complaint. 
1451.  General  principles.  —  It  is  not  proposed  to  set  forth 
except  quite  briefly  the  rules  and  principles  upon  which  a  bill  in 
equity  to  foreclose  a  mortgage  is  to  be  drawn,  prosecuted,  and 
defended.     Although  the  more  important  features  of  the  plead- 
ings are  the  same  wherever  this  remedy  is  used,  yet  in  matters  of 
practice  there  is  much  diversity  in  the  different  states  arising  from 
enactments  of  different  systems  of   procedure,  and  the  adoption 
of  different  rules  of  practice  by  the  courts.     As  already  noticed 
when  treating  of  the  parties  to  an  equitable  action  for  foreclosure, 
several  states  ^  have  adopted  and  made  applicable  to  all  civil  ac- 
tions alike  codes  of  procedure,   in  which  the  equity  method   of 
pleading  and  practice  in  a  simple  form  is  preserved.     The  special 
provisions  of  these  codes  relating  to  mortgages  are  there  given. 
The  general  theory  and  form  of  the  pleadings  as  a  whole  are  de- 
termined by  provisions  that  the  complaint  or  petition  shall  con- 
tain "  a  plain  and  concise  statement  of  the  facts  constituting  the 
cause  of  action  without  unnecessary  repetition  ;  "  and  "  a  demand 
of  the  relief  to  which  the  plaintiff  supposes  himself  entitled.     If 
a  recovery  of  money  be  demanded,  the  amount  thereof  shall  be 

1  Morris   v.  Wheeler,    45   N.   Y.  708;  »  McCoy  u.  O'Donncll,  2  Thoinp.  &  C. 

Pratt  V.  Ramsdell,  16  How.  (N.  Y.)  Pr.  (N.  Y.)  671. 

59;  Bartow  r.  Cleveland,  II..  304.  •«  As   in   New  York   Lifore    the    Code. 

«  Roosevelt  V.  N.  Y.  &  Mar.  U.  Co.  30  Mann  v.  Cooper,  1   llarl>.  (N.  Y.)  Ch.  185. 

How.  (N.  Y.)  Pr.  226;    45  Barb.  (N.  Y.)  »  See  §  1367. 
554. 

413 


§§  14")il-1454.]       I'ORKCLOSURK    MY    KQUITABLK   SUIT. 

statotl."  '  The  answer  must  contain  :  "1.  A  j^cncral  or  specific 
denial  of  eaeli  material  allej^alion  of  the  complaint  (or  ])etition) 
controverteil  by  the  di'foiulant,  or  of  any  knowledge  or  informa- 
tion thereof  sutlicient  to  form  ii  belief ;  2.  A  statement  of  any  new 
matter  constituting  a  defence  or  counter-claim  (or  set-off),  in  or- 
dinarj'  and  concise  language,  without  repetition."  ^  These  pro- 
visions are  merely  the  essential  requisites  of  a  bill  and  answer  in 
equity  ;  and,  therefore,  the  more  important  decisions  relating  to 
the  substance  of  the  pleadings  apply  in  those  states  in  which  fore- 
closure is  by  a  formal  bill  in  a  chancery  court,  and  equally  in  those 
liaving  these  codes  of  procedure. 

1452.  The  general  requisites  of  the  complaint  are  that  it 
shall  allege  the  execution  and  delivery  of  the  mortgage  and  of  the 
note  or  bond  secured  by  it ;  the  names  of  the  parties  to  it ;  the 
date  and  amount  of  it ;  when  and  where  recorded ;  a  description 
of  the  premises,  the  amount  claimed  to  be  due,  and  the  default 
upon  which  the  right  of  action  has  accrued.  It  must  show  also 
that  the  complainant  is  entitled  to  maintain  the  action,  and  that 
the  defendants  have  or  claim  to  have  certain  interests  in  the 
premises  or  liens  upon  them.  If  the  plaintiff  is  not  the  mortgagee, 
his  right  to  maintain  the  action  by  virtue  of  an  assignment,  be- 
quest, or  otherwise,  must  be  set  forth  with  reasonable  fulness  and 
certainty.  The  terms  and  conditions  of  both  the  mortgage  and 
of  the  bond  or  note  secured  by  it  should  be  set  out.  This  may  be 
done  by  proper  recitals  in  the  complaint  itself,  or  by  annexing 
copies  of  these  instruments,  which  are  referred  to  in  the  complaint 
and  made  part  of  it.  The  relief  which  is  sought  should  be  fully 
and  explicitly  stated.^ 

1453.  Facts  not  inconsistent  with  the  bill  may  be  proved. 
The  evidence  may  in  some  respect  show  a  different  state  of  facts 
from  that  alleged  in  the  bill ;  and  yet  this  will  be  sufficient  if  the 
facts  shown  are  not  inconsistent  with  the  allegations ;  as,  for  ex- 
ample, the  amount  actually  due  may  be  shown  to  bo  less  than  the 
amount  alleged  to  be  due.* 

1454.  An  allegation  of  the  execution  and  delivery  of  the 
mortgage  is  a  sufficient  allegation  of  its  proper  execution  and  of 
its  validity.^     An  allegation  of  the  execution  of  the  mortgage  is 

1  See  Pomeroy's  Remedies,  §  433.  *  Collins  v.  Carlile,  13  111.  2.54. 

2  lb.  §  583.  ^  Moore  v.  Titmaii,  33  HI.  358;    McAl- 
'^  See  §  1578.                                                 lister  v.  Plant,  54  Miss.  106. 

414 


THE    BILL   OR   COMPLAINT.  [§§  1455,  1456. 

also  sufficient  without  any  averment  of  title  in  the  mortgagor. 
He  is  estopped  by  his  deed  from  denying  his  title  ;  and  whatever 
his  title  may  be  the  mortgage  may  be  foreclosed  against  him.^ 
The  possession  of  the  mortgage  by  the  mortgagee  duly  executed, 
acknowledged,  and  recorded,  is  presumptive  evidence  of  delivery .^ 

The  witnessing  and  acknowledgment  of  the  mortgage  where 
made  essential  to  the  validity  of  it  should  be  alleged  ;  but  if  the 
plaintiff  be  an  assignee  of  the  mortgage  these  facts  are  not  pre- 
sumably within  his  knowledge,  and  he  may  properly  aver  them 
upon  information  and  belief  only.^ 

The  mortgage  and  the  note  or  bond  secured  by  it  are  usually 
in  some  manner  made  part  of  the  complaint.  Copies  of  them 
may  be  set  out  in  the  complaint  or  annexed  to  it.  It  is  not  suffi- 
cient merely  to  file  the  originals  or  copies  with  the  complaint 
without  referring  to  them  and  making  them  part  of  it.^  But  it 
is  sufficient,  if  the  bill  sets  out  the  substance  of  the   mortgage.^ 

If  properly  set  forth  in  the  complaint  the  production  of  the 
note  and  mortgage,  and  proof  of  service  of  the  summons,  is  suffi- 
cient where  no  defence  is  interposed  to  justify  a  decree.^  If  the 
answer  admits  the  execution  of  the  mortgage  and  note,  and  does 
not  deny  that  the  amount  claimed  in  the  petition  is  due,  there  is 
nothiug  for  the  plaintiff  to  prove." 

1455.  Proof  of  execution.  —  The  mortgage  and  the  personal 
obligation  accompanying  it,  unless  admitted,  must  be  proved  by 
competent  evidence.  If  these  instruments  be  attested  by  a  wit- 
ness, the  execution  must  be  proved  by  him,  unless  his  attendance 
cannot  be  procured,  or  other  circumstances  make  other  evidence, 
such  as  proof  of  the  handwriting,  competent.  When  the  execu- 
tion is  contested  by  a  person  who  is  not  a  party  to  the  deed,  the 
admission  of  the  mortgagor  is  not  sufficient  if  the  securities  are 
attested  by  a  witness. "^ 

1456.  The  complainant  must  show  by  his  bill  either  that 

1  Shed  r.  Garfidd,  5  Vt.  39.  3    I)nna    (Ky.),  590;    Harlan  v.  Muirtll, 

2  Commercial  Bank  of  N.  J.  i'.  Reckless,     lb.  180. 

5  N.  J.  P:q.  (1  Ilalbt.)  C50.  ^  Cecily.  Dynos,  2  Cart.  (Ind.)  2(;6. 

»  Fairbanks  y.  Isliam,  16  Wis.  118.  "  Whitney   v.  Bucknian,    13  Cal.    530; 

*  Hiatt  V.  Goblt,  18  Ind.  494;   Hcrrcn     Harlan  v.  Smith,  6  Cul.  173. 
>:  Clifford,  18  Ind.  411.     And  see  Dumell         '  Corley  v.  Ilobart,  8  Iowa,  358. 
V.  Terstegge,    23    Ind.   397  ;    lirown    i;.         »  Leigh  v.  Lloyd,  35  IJcav.  455  ;  Iiiman 
Shcaron,  17  Ind.  239;    Triplctt  w.  Soyre,     v.    Parsons,    4    Mad.    271;     Whyinuu   v. 

Uath,  1   C.  L.  K.  482. 
415 


§  1457.]  FORECLOSURK    MY    l'\)UlTAIiLK   SUIT. 

he  is  the  mortgagee,  or  that  he  has  legal  title  to  tlie  security  by 
assignment  or  otherwise.  It  is  not  necessary  in  so  many  words  to 
aver  that  the  complainant  has  title  to  the  mortgagcKl  premises  ; 
it  is  sullieient  to  aver  the  making  of  the  mortgage.^  The  estate 
or  interest  in  the  land  is  not  in  issue.  The  only  questions  are 
whether  the  mortgage  has  been  properly  executed,  and  the  com- 
plainant rightfully  holds  it  and  may  enforce  it.  The  complainant 
showing  priimt  facie  title,  it  is  for  the  defendant  to  allege  and 
provp  that  he  has  no  title  ;  that,  for  instance,  the  mortgage  has 
been  discharged.  The  complainant  need  not  anticipate  the  de- 
fence, and  set  out  in  his  bill  the  facts  which  would  invalidate  the 
discharge. - 

1457.  Assignee's  title.  —  If  the  bill  be  brought  by  an  assignee 
of  the  mortgage,  the  assignment  to  him  should  be  fully  and  dis- 
tinctly alleged.  The  same  technicality  in  pleading  required  at 
law  is  not  necessary  in  a  court  of  equity  ;  and  accordingly  where 
the  bill  alleges  an  assignment  of  the  mortgage,  but  not  of  the 
note  or  bond,  it  is  sufficient  if  it  appears  substantially  from  the 
bill  that  the  debt  belongs  to  the  complainant.*^  But  if  it  does 
not  so  appear,  a  failure  to  aver  that  the  bond  or  note  was  assigned 
to  the  plaintiff,  or  that  he  is  the  holder  or  owner  of  it,  has  been 
held  a  fatal  defect.*  If,  however,  the  mortgage  Avas  given  with- 
out a  bond  or  other  extrinsic  wi-itten  evidence  of  the  debt  secured, 

1  Bull  V.  Meloney,  27  Conn.  560.      The  years ;  but  it  seems  to  us,  as  the  right  of 

allegation  in  this   case  was   that   the  re-  the  plaintiff  to  ask  the  interference  of  the 

spondent,   to  secure   the    debt  described,  court  depends  upon  some  title  in  himself 

"did  execute  to  the  petitioner  a  deed  of  a  to   the  land   mortgaged,   either  legal   or 

certain  piece  of  land,"  described,  with  the  equitable,  that  it  is  incumbent  upon  him 

condition.  to  establish  it  at  least  prima  facie ;  and  of 

In  Frink  v.  Branch,  16  Conn.  260,  268,  course  the  defendant  must  have  a  corre- 

Church,  J.,  says  :  "  It  is  not  often,  in  pro-  spending  right  to  attack  it." 
ceedings  of  foreclosure,  that  the  title  of         2  Frink  v.  Branch,  16  Conn.  260,  268; 

the  mortgage  is  directly  put  in  issue,  or  Palmers.  Mead,  7  Conn.  149,  157;  Spear 

constitutes  the  principal  subject  of    con-  v.    Hadden,  31    Mich.  265 ;    Cornelius   v. 

troversy;  although  the  entire  purpose  of  Halsey,  3  Stockt.  (N.  J.)  27. 
the  plaintiff  is,  in  default  of  payment,  to         ^  Cornelius  i;.  Halsey,  3  Stockt.  (N.  J.) 

make  a  perfect    title,    which   before  was  27;  Buckner  n.  Sessions,  27  Ark.  219.    A 

qualified;  and  the  ground  of  his  applica-  description  of  the  plaintiff  "as  -ssignee  " 

tion  is,  that  he  has  a  mortgage  title ;  and  of   the  mortgagor  is  not  sufficient.     The 

•without  an  averment  of  facts  con.stitutiug  assignment  of  the  estate  cannot  be  implied 

such  title,  his  bill  would  be  defective.     It  from  this.     But  contra,  see  Ercanbrack  v. 

may  not  be  necessary  either  to  allege  or  Rich,  2  Chand.   (Wis.)    100;   Babbitt  v. 

prove  the   precise  condition  of    the  title,  Bowen,  32  Vt.  437. 
whether  it  be  in  fee  or  in  tail,  for  life  or  for         *  Hays  v.  Lewis,  17  Wis.  210. 

416 


THE   BILL    OR   COMPLAINT.  [§  1458. 

an  assignment  of  the  mortgage  passes  the  title  to  the  debt ;  and 
a  complaint  which  alleges  that  the  mortgage  was  given  for  a  part 
of  the  purchase  money,  and  sets  out  the  assignment  of  it  to  the 
plaintiff,  is  sufficient.^  The  bill  need  not  aver  the  record  of  the 
assignment; 2  for  there  is  no  legal  necessity  for  it.^  The  fact 
that  the  assignee  holds  the  mortgage  merely  as  security  does  not 
affect  his  right  to  recover,  but  goes  only  to  limit  his  interest  in 
the  proceeds.* 

Other  liens  which  the  plaintiff  may  have  upon  the  property  he 
may  set  out  in  his  complaint  and  establish  beforehand,  or  may 
present  and  establish  a  claim  to  the  surplus  in  the  same  manner 
as  any  otlier  person.^ 

1458.  A  mortgagee  having  two  mortgages  upon  the  same 
premises  may,  under  the  several  codes,  include  both  of  them  in 
one  bill  for  foreclosure.  Two  suits  being  unnecessary,  he  will  be 
allowed  costs  in  one  only.**  If  one  mortgage  covers  only  a  part  of 
the  premises  included  in  the  other,  suit  should  be  brought  in  the 
first  place  for  the  foreclosure  of  the  mortgage  covering  the  entire 
premises,  as  then  a  second  suit  will  be  unnecessary.'^ 

One  having  two  mortgages  on  the  same  property  may  file  his 
bill  for  the  foreclosure  of  both,  although  the  second  of  them  be 
not  due.  If  the  second  mortgage  becomes  due  before  the  decree, 
the  defendant  cannot  defeat  the  action  as  to  this  mortgage  by  ten- 
dering the  amount  due  on  the  first  mortgage  after  the  maturity  of 
the  second.^  If  the  last  mortgage  be  due,  but  only  a  part  of  the 
first  is  due,  the  plaintiff  is  entitled  to  a  decree  for  the  sale  of 
enough  of  the  mortgaged  premises  to  pay  both  mortgages,  unless 
the  defendant  pay  the  second  mortgage  and  all  that  has  become 
due  of  the  first. ** 

When  the  debt  is  payable  by  instalments,  action  to  foreclose 
may  be  brought  when  the  first  instalment  falls  due  and  is  not 
paid.'O 

>  Severance  t;.  Grimth,  2  Liiiis.  (N.  Y.)  Pr.  75  ;  Tower  v.  White,  10  I'uigc  (N.  Y.), 

38,  and  cases    cited;  Car)l    v.    Williunis,  3'J^>. 

7  Lans.  (N.    Y.)    416;    Colcrmm   v.  Van  «  Roosevelt  v.    Ellithorp,  10  Pait'e  (N. 

Ucns.selaer,  44  How.  (N.  Y.)  I'r.  368.  Y.),  415;  Oconto  County  v.  Hall,  42  Wis. 

»  King  V.  Harrington,  2  Aik.  ( Vt.)  .33.  59. 

'  Fryer  v.  Uocktfelier,  63  N.  Y.  268.  ^   Demarcst  v.  Herry,  16  N.  J.  Ivi-  481. 

♦  McKinncy  r.  Miller,  19  Mich.  142.  «   Hawkins  i'.  Hill,  15  Cul.  499. 

'  Field   V.  Hawxburst,  9    How.  (N.  Y.)  «  Hull  i'.  IJamher,  10  I'aigo,  296. 

w  Graltan  v.  Wiggins,  23  Cal.  16. 

VOL.  II.                           27  417 


§   1450.]  FOKKCLOSURK    HY    KQUITAnLK    SUIT. 

If  till'  nun'ti:;:igt'  secures  the  paynient  of  sovonil  notes,  it  may 
be  forei-K)seil  upon  the  non-payment  when  due  of  any  of  theni.^ 

1459.  Foreclosure  for  instalment.  —  Foreclosure  may  be  had 
for  any  part  of  the  mortgage  debt  due  at  the  time,  and  no  more; 
and  when  the  mortgagee  elects  to  sell  under  a  power  in  the  mort- 
gage, or  to  foreclose  in  chancery,  he  can  only  sell  or  foreclose  for 
the  amount  tlien  due,  according  to  the  terms  of  the  mortgage ;  and 
if  he  sells  the  entire  estate,  that  of  necessity  operates  to  release 
the  security  for  the  amount  not  due.'^  For  stronger  reasons  a 
foreclosure  for  a  part  only  of  a  mortgage  debt,  wlien  it  is  all  due, 
operates  as  a  release  of  tiie  portion  not  embraced  in  the  foreclos- 
ure. The  mortgage  of  record  showing  that  the  entire  debt  is 
due,  and  a  portion  only  foreclosed,  all  persons  have  a  right  to  con- 
clude that  the  other  part  of  the  debt  has  been  paid.  The  lien 
of  the  mortgage  is  released  as  to  creditors,  and  as  to  parties  hold- 
ing the  land  under  the  prior  foreclosure  and  sale.^ 

When  a  decree  of  foreclosure  to  satisfy  a  part  of  the  mortgage 
debt  expressly  declared  that  the  property  should  be  sold  subject 
to  a  lien  to  secure  the  payment  of  the  notes  not  then  due,  and  at 
the  sale  the  premises  were  purchased  by  the  mortgagee,  it  was 
held  that  this  operated  as  a  satisfaction  of  the  entire  debt,  as  well 
the  portion  not  due  as  that  which  was.  The  purchaser  virtually 
became  a  mortgagor  to  the  extent  of  the  balance  of  the  mortgage 
debt.  No  action  at  law  can  afterwards  be  maintained  on  the 
notes.*  But  the  mortgage  may  be  foreclosed  for  an  instalment  of 
the  interest  due  without  waiting  for  the  maturity  of  the  note,  and 
a  sale  may  be  had  of  so  much  of  the  mortgaged  premises  as  will 
be  necessary  to  pay  this  with  costs  of  suit.^  Interest  falling  due 
yearly,  on  a  note  secured  by  mortgage,  is  an  instalinent  of  the 
debt  for  which  the  mortgage  may  be  foreclosed  in  equity.  It  is 
due  and  payable  as  much  as  if  a  separate  note  had  been  given  for 
it.  An  action  at  law  may  also  be  maintained  for  the  interest  as 
it  falls  due.*^ 

Although  a  mortgagee  holding  several  notes  maturing  at  differ- 
ent times  may,  under  the  statute,  foreclose  as  to  all  when  one  of 

1  Miller  r.  Remley,  35  Irid.  539.  v.  Ileintz,  17  111.  259  ;  Hughes  v.  Frisby, 

2  Smith  V.  Smith,  32  111.  198.  81  111.  188. 

8  Rains  v.  Mann,  68  111.  264  ;  and  see         ^  Morgenstern  v.  Klees,  30  111.  422. 
Hughes  i;.  Frisby,  81  111.  188.  *>  Morgenstern  v.  Klees,  supra. 

*  Mines  v.  Moore,  41  111.  273;  Weiner 

418 


THE  BILL   OR   COMPLAINT.  [§§  1460-1462. 

them  is  clue,  yet  he  may  institute  his  suit  to  foreclose  that  note 
alone,  and  a  judgment  upon  this  is  no  bar  to  a  subsequent  suit  to 
enforce  payment  of  another  note  afterwards  maturing.  The  sev- 
eral notes  are  considered  as  so  many  successive  mortgages.^ 

A  mortgage  given  to  secure  several  notes  payable  at  different 
times  is  not,  it  would  seem,  so  far  divisible  that  the  holder  of  all 
the  notes  may,  after  they  have  all  matured,  have  separate  actions 
upon  each  note.  All  the  notes  should  in  such  case  be  included  in 
one  action  ;  and  if  the  holder  obtains  a  decree  and  sale  upon  one 
note,  it  is  probable  that  he  would  not  be  allowed  to  maintain  a 
subsequent  action  upon  either  of  the  other  notes.^  At  any  rate  it 
has  been  held  that  when  such  holder  has  foreclosed  for  the  note 
last  due  only,  a  subsequent  purchaser,  without  notice  that  the 
other  notes  remain  unpaid,  has  a  right  to  presume  that  they  have 
already  been  paid,^  although  in  his  deed  of  purchase  he  assumed 
the  amount  of  the  mortgage  as  part  of  the  purchase  money.* 

1460.  When  the  bill  is  filed  by  the  holder  of  one  of  several 
mortgage  notes  it  should  state  whether  the  other  notes  have  been 
paid,  and  if  not  paid  by  whom  they  are  held,  and  the  dates  of  their 
maturing,  so  that  the  rights  of  the  holders  of  the  other  notes  may 
be  determined  and  protected.^  But  if  the  complainant  holds  all 
the  notes  he  is  not  obliged  to  foreclose  for  all  of  them.  He  may 
take  judgment  in  the  foreclosure  suit  for  part  of  them,  and  for 
those  not  included  in  the  decree  of  foreclosure  he  may  recover  in 
a  suit  at  law.^ 

1461.  When  one  mortgagor  is  not  liable  for  the  debt,  as,  for 
instance,  when  only  one  of  two  or  more  persons  who  have  joined  in 
the  execution  of  the  mortgage  has  executed  the  note,  or  incurred 
any  personal  liability  for  the  payment  of  the  debt,  or  when  a  wife 
has  mortgaged  her  land  to  secure  her  husband's  note,  the  bill 
should  properly  pray  for  a  decree  of  sale  against  the  persons  who 
executed  the  mortgage,  and  for  a  personal  judgment  only  against 
the  deV)tor.'' 

1462.  The  bill  should  so  describe  the  mortgaged  property 
that  if  a  sale  is  ordered  the  oliicer  may  know  on  what  land  Lo  ex- 

'  §§  608,  1577,  1591,  1700;  C^dusc  v.         *  Minor  u.  IhW,  su/na. 
Ilolmau,  11)  Iml.  .in.  ^  Levert  w.  Redwood,  9  Port.  (Ala.)  79; 

•^  Minor  v.  Hill,  t,H  Ind.    170,  per  VVor-     Hurtwell  i;.  Blocker,  6  Ala.  ."iSl. 
,Jen.  .J.  •  LiiRdon  v.  Vtm\,  2<)  Vt.  '217. 

»  Ilrtins  V.  Mann,  08  111.  264.  '  Kollins  v.  Forties,  10  Ciil.  299. 

41'J 


§  14G-'>.]  Four.ci.osuRK  nv  kquitahlk  suit. 

ecuto  the  drUm"  i)f  otnirt.^  A  bill  wliicli  contains  no  suflRcicnt  de- 
8oriptii)n  of  tlio  property,  Jinil  refers  to  a  mortgage  annexed  whi(!h 
in  turn  contains  no  sutHcient  description,  but  itself  refers  therefor 
to  another  instrument,  is  fatally  defective.^  It  is  generally  suffi- 
cient, iiowever,  to  describe  the  premises  as  they  appear  in  the 
mortgage  itself.  The  uncertainty  of  that  description  is  no  ground 
for  refusing  a  decree  of  sale,  though  it  may  affect  the  title  to  the 
premises  when  sold.^  If  the  description  be  correct  in  the  bill,  a 
decree  entered  by  default  cannot  be  avoided  by  showing  that  the 
mortgage  as  recorded  misdescribed  the  premises.*  If  a  bill  to 
foreclose  a  mortgage  upon  several  tracts  of  land  describe  some  of 
them  sufficiently,  though  others  be  insufficiently  described,  there 
is  no  ground  for  demurrer  to  the  entire  bill.^ 

A  description  in  the  mortgage  may  be  sufficient  to  convey  the 
property  as  against  the  mortgagor,  and  yet  be  insufficient,  unaided 
by  proper  averments  in  the  complaint,  to  authorize  a  decree  of 
foreclosure  and  sale.  Such  averments  cannot  aid  a  description 
which  is  so  indefinite  as  to  render  the  mortgage  void ;  but  they 
will  cure  a  description  which  is  merely  insufficient,  and  proper 
evidence  being  introduced  to  support  such  averment,  the  decree 
may  specify  the  true  boundaries.*^  In  a  bill  to  foreclose  a  mort- 
gage upon  certain  real  estate,  with  two  mills,  and  all  "  appurte- 
nances thereunto  belonging,"  an  allegation  that  a  certain  mill-dam 
and  water-power  are  appurtenant  to  said  mills  and  real  estate, 
sustained  by  admissions  by  the  defendant,  will  support  a  judg- 
ment that  the  mortgage  is  a  lien  upon  said  dam  and  water-power 
as  well  as  upon  the  real  estate  more  particularly  desci'ibed.'^ 

1463.  May  omit  part.  —  Althougli  a  mortgage  cannot  be  the 
subject  of  several  different  foreclosure  suits  with  reference  to  dif- 
ferent tracts  embraced  in  it,  yet  if  part  of  the  land  has  been  sold 
under  a  prior  mortgage,  or  the  mortgagee's  title  to  a  part  of  it 

1  Triplett  I'.  Sayre,  .3  Dana  (Ky.),  590;         For  a  case  of  incompatible  description 
StruWe  V.  Nei;.'liljert,  41   Ind.  .344  ;  Magee     see  Schmidt  v.  Mackey,  31  Tex.  659. 

t'.  Sanderson,  10  Ind.  261  ;  Whittlesey  v.  *  Deitrich  v.  Lang,  11  Kans.  636. 

Beall,  5  Blackf.  143;  Davis  v.  Cox,  6  Ind.  &  Rapp  v.  Thie,  61  Ind.  372. 

481  ;  Cecil  v.  Dynes,  2  Ind.  266  ;  Nolte  v.  ^  Halstead    v.   Board   of    Comm'rs    of 

Libbert,  34  Ind.  163;  White  i;.  Hyatt,  40  Lake    County,    56    Ind.   363;    Slater  v. 

Ind.  385.  Breese,  36  Mich.  77  ;  Shcpard  v.  Shcpard, 

2  Struble  v.  Neighbert,  supra;   Emeric  36  Mich.  173. 

V.  Tarns,  6  Cal.  155.  t  Lanouc  v.  McKinnon,  19  Kans.  408. 

8  Tryon  v.  Sutton,  13  Cal.  490 ;  Whit- 
ney i;.  Buckman,  lb.  536. 

420 


THE   BILL   OR   COMPLAINT.  [§§  1464,  1465. 

fails  from  any  cause,  or  he  has  released  a  part  from  the  operation 
of  the  mortgage,  he  may  omit  such  part  from  his  bill.^  In  like 
manner  when  a  part  has  not  been  released,  but  the  mortgagee 
enforces  his  mortgage  upon  one  piece  only,  he  thereby  waives  the 
lien  upon  the  remainder.  The  mortgage  cannot  be  foreclosed 
piecemeal.  The  mortgagor,  however,  if  he  still  owns  the  equity 
of  redemption,  cannot  complain  of  the  omission,  although  there 
be  a  deficiency  for  which  a  personal  judgment  is  rendered  against 
him.2 

1464.  Reforming  description.  —  Where  by  mistake  a  piece  of 
land  not  intended  to  be  mortgaged  was  included  in  the  descrip- 
tion, the  mortgage  may  be  foreclosed  as  to  the  other  land  without 
first  reforming  the  deed.^  But  if  the  premises  are  misdescribed 
so  that  the  instrument  must  be  reformed  before  proceeding,  the 
equity  jurisdiction  of  the  court  is  broad  enough  to  accomplish  this 
in  the  same  suit,  which  may  afterwards  proceed  to  foreclosure.^ 
In  New  Jersey,  however,  it  is  held  that  a  mortgage  cannot  be  re- 
formed or  corrected  in  a  foreclosure  suit ;  but  that  the  only  rem- 
edy is  by  a  cross-bill  for  that  purpose."  A  mistake  in  the  descrip- 
tion first  made  in  the  mortgage,  and  afterwards  carried  all  through 
the  proceedings  and  into  the  sheriff's  deed,  may  afterwards,  by  a 
proceeding  in  equity,  be  reformed  in  all  the  instruments  so  as  to 
make  them  conform  to  the  intention  of  the  parties.^  When  re- 
formed the  lien  attaches  to  the  property  intended  to  be  covered 
by  it  from  the  date  of  the  execution  of  the  mortgage,  aud  not 
merely  from  the  date  of  the  reformation.^  If  the  description  in 
the  mortgage  deed  contains  a  latent  ambiguity  as  to  the  bounda- 
ries, the  court  may  in  the  foreclosure  suit  determine  them.^ 

1465.  Record. —  In  a  bill  against  the  mortgagor  it  is  not  nec- 
es.sary  to  aver  that  tli(j  mortgage  is  recorded,  for  he  is  liable  with- 
out any  record  ;   or  to  aver  tliat  he  has  not  conveyed  away  the 

1  Sedam  v.  Williams,  4  McLean,  51.  4r)0;  McCrary  ?•.  Austell,  46  Oft.  4.50  ;  Ad- 

2  Mascarel  i-.  ItnfTour,  51  Cal.  242.  nins  v.  Stiitzrnan  (C.  P.  Ohio,  1878),  7  Am. 
'  Conklin  v.  Bowmiin,  1 1  Iiiil.  254  ;  and     L.  Uncord,  76. 

sec  Andrews  v.  Gilles])ic,  47    N.  Y.  487  ;  ^  Graham  v.   Rerryman,  10   N.  J.   Ecj. 

Gillespie  v.  Moon,  2  Johns.  (N.  Y.)   Ch.  29  ;  French  v.  GrifTin,  18  N.  J.  K(|.  279. 

585.  °  Quivey  v.   Baker,  .37  Cal.  465  ;  /in^- 

*  §§  97-99;  Davis  v.  Cox,  G  Ind.  481  ;  scm  v.  Kidd,  29  N.  J.  Eq.  516. 

Halstead  r.  Board  of  Comm'rH  of  Lake  '  Adams  v.  Stutzman,  su/ira. 

County,  56  Ind.  .36.3;  Bariiahy  v.  Parker,  "   Doc  i-.  Vallejo,  29  Cal.  .385. 
53   Ind.   271  ;  Alexander  c.   Uea,  50  Ala. 

421 


§  1^06.]  FORKOLOSURE    BY    EQUITAHF-K   SUIT. 

liiml,  (ov  ho  is  a  proper  party  in  that  caso.^  But  if  it  be  against 
a  purihastM-  (loiu  the  mortgagor,  according  to  the  practice  in  some 
states,  the  bill  shouhl  allege  either  that  the  mortgage  was  duly 
recorded,  or  that  the  purchaser  bought  with  notice  of  it ;  ^  but  in 
others  it  is  held  that  this  is  unnecessary  ;  that  it  is  purely  a 
matter  of  defence,  that  the  defendant  purchased  in  good  faith 
without  notice,  and  he  must  set  this  up  for  himself.^ 

An  averment  that  the  mortgage  was  recorded  within  ninety 
days  after  its  execution,  without  any  furtlier  averment  that  it 
was  properly,  duly,  or  legally  recorded,  or  statement  where  it  was 
recorded,  is  insuilicient;  and  the  memorandum  or  certificate  of 
the  recorder  on  the  copy  of  the  mortgage  filed  with  the  complaint 
and  therein  referred  to,  being  no  part  of  the  complaint,  does  not 
cure  the  defect.* 

But  a  failure  to  allege  the  recoi'ding  of  the  mortgage,  or  a  no- 
tice to  the  purchaser  of  its  existence,  is  cured  by  proof  made  of 
the  one  fact  or  the  other  without  objection.^ 

1466.  The  debt  secured  by  the  mortgage  must  be  set  out 
and  described.  If  the  note  or  bond  secured  by  the  mortgage  be 
set  forth,  it  is  not  necessai'y  to  allege,  or  if  alleged  to  prove,  the 
consideration  or  debt  for  which  this  was  given.^  Although  the 
note  does  not  correspond  with  that  described  in  the  mortgage,  as 
where  this  refers  to  a  note  payable  in  one  year,  whereas  the  note 
was  payable  in  sixty  days,  under  an  agreement  for  renewals  for  a 
year,  if  the  complaint  fully  explains  this  misdescription,  and  that 
the  mortgage  was  really  designed  to  secure  this  note,  it  states  a 
good  cause  of  action.'''  A  complaint  which  set  out  an  indebted- 
ness of  the  mortgagors  upon  certain  notes  indorsed  by  them  and 
discounted  by  the  plaintiffs,  and  alleged  that  the  mortgage  was 
given  to  secure  the  payment  of  a  bond  for  the  amount  of  the 
indebtedness,  the  payment  of  which  was  thereby  considerably 
extended,   and  ,that    the   mortgagors  had  failed  to  comply  with 

1  Faulkner  v.  Overturf,  49  Ind.  265;  Ch.    112;    Gallatian    v.   Cunningham,    8 

Perdue  v.  Aldridge,  19  Ind.  290.  Cow.  (N.  Y.)  361,  374. 

*  Lyon   V.  Perry,  14   Ind.    515;   Peru  ^  Faulkner  r.  Overturf,  si//5ra . 

Bridge  Co.  >•.  Hendricks,  18  Ind.  11  ;  Ma-  ^  Lyon  i;.  Perry,  14  Ind.  515. 

gee  V.  Sanderson,  10  Ind.  2G1  ;  Culph  v.  «  Day  v.  Perkins,  2  Sandf.  (N.  Y.)  Ch. 

Phillips,  17   Ind.  209  ;  Faulkner  v.  Over-  359  ;  Brown  v.  Kalinweiler,  28  N.  J.  Eq. 

turf,  supra;  Stevens  ».  Campbell,  21  Ind.  311  ;  Farnum  v.  Burnett,  21  N.  J.  Eq.  87. 

471.  "^  Merchants'  Nat.  Bk.  v.  Raymond,  27 

'  Stacy  i;.  Barker,  1  Sm.  &  M.  (Miss.)  Wis.  567. 
422 


THE    BILL    OR    COMPLAINT.  [§§  1467,  1468, 

the  conditions  of  the  bond,  was  held  to  allege  a  sufficient  cause 
of  action. 1 

1467.  Reference  to  determine  amount  of  debt.  —  It  is  the 
practice  generally  for  the  courts  in  case  the  bill  is  taken  as  con- 
fessed, or  the  right  of  the  plaintiff  is  admitted  by  the  answer,  to 
order  a  reference  as  a  matter  of  course  to  determine  the  amount 
due  upon  the  mortgage  debt.^  According  to  the  practice  of  some 
courts  such  a  reference  may  be  had  whether  the  defendant  has 
answered  or  not.^  The  reference  generally  embraces  other  mat- 
ters also,  as  whether  the  premises  can  be  sold  in  parcels,  or 
whether  there  are  equities  requiring  the  sale  to  be  made  in  a  par- 
ticular order  ;  but  the  referee  is  always  limited  in  his  examination 
to  the  subjects  specified  in  the  order.*  He  should  report  the  facts, 
and  not  merely  his  conclusions."  Upon  the  coming  in  of  the  re- 
port, exceptions  may  be  taken  to  it,  otherwise  it  is  confirmed.^ 
A  final  order  of  sale  before  the  filing  of  the  report  is  erroneous  ;  ^ 
as  it  is  also  when  made  after  the  filing  of  it,  and  before  it  is  con- 
firmed or  set  down  for  hearing.^  The  decree  is  founded  upon  the 
report.^ 

1468.  A  renewal  of  the  note  should  be  alleged.  The  bill 
should  contain  all  the  allegations  necessary  to  cover  the  facts  in- 
tended to  be  introduced  in  evidence,  otherwise  the  evidence  will 
be  inadmissible.  Therefore,  where  a  bill  to  foreclose  a  mortgage 
given  to  indemnify  an  indorser  of  a  note  alleged  the  indorsement 
of  a  note  of  a  certain  date  and  amount  for  the  mortgagor,  under 
the  mortgage,  but  did  not  allege  that  the  note  was  a  renewal  of 
a  former  one,  it  was  held  that  although  the  mortgage  secured  the 
Uability  on  the  renewed  note  in  the  same  manner  as  it  secured  the 
liability  on  the  original  one,  yet  without  amending  the  bill,  evi- 

>  Troy  City  Bank  v.  Howinan,  43  Barb.  *  McCrackan  t- .  Valentine,  9  N.  Y.  42. 

(N.  Y.)  O.rj  ;  19  Abb.  (N.  Y.)  I'r.  18.  &  Anon.  1  Clarke  (N.  Y.),  423  ;  Sccu- 

2  Corninfi  v.  Baxter,  0  Pai(,'e  (N.  Y.),  rity  Fire  Ins.  Co.  v.  Martin,  l.")  Abb.  (N. 

178;  Clianiberlaiti    v.  Dcmpsey,  36   N.  Y.  Y.)  Pr.  479. 

144  ;  Anon.  .'J  How.  (N.  Y.)  Pr.  158.  "  Swarthout  i;.  (-'urti.s,  4   N.  Y.  415  ;  5 

'*  BasHetl   V.    MeDoncl,    13    Wis.    444  ;  How.  Pr.  198. 

Bcvilie  V.  Mflntosh,  41  Miss.  516;  Guy  v.  '  (iraham  v.  KiiiK,  15  Ala.  563. 

Franklin,  5  Cal.  416;  Blackledgc  i'.  Nel-  "   Dean  v.  Codilinj^ton,  2  Jolins.  (N.  Y.) 

son,  1  Dev.  (N.  C.)  Kq.  418.  Cli.  201. 

As  to  duties  of   referee  generally,  sec  »  Poguc  v.  Clark,  25  111.  351  ;  Sims  v. 

Wolcott  I'.  Weaver,  3   How.  (N.  Y.)   Pr.  Cross,  10  Yerg.  (Tenn.)  460. 
159;   Gregory  v.  Campbell,   16   lb.  417; 
Kelly  V.  Scaring,  4  Abb.  (N.  Y.)  Pr.  354. 

423 


§§  1469,  1470.]       KOIJECLOSURE   BY   EQUITABLE   SUIT. 

dence  to  provi'  the  note  described  In  the  bill  to  have  been  given 
in  renewal  of  a  former  one  was  inadmissible.^ 

1469.  Proof  of  note.  —  It  is  no  objection  to  the  introducing 
of  a  note  in  evidence  that  it  was  not  fully  or  perfectly  described 
in  the  mortgage,  the  words  ''or  order"  in  the  note  being  omitted 
in  the  description. ^  Although  the  mortgage  note  be  imperf(^ctly 
described  in  the  complaint,  if  it  be  filed  with  the  complaint,  and 
alleged  to  be  the  same  note  mentioned  in  the  mortgage,  and  on 
the  trial  it  be  proved  to  be  such,  the  defective  description  is 
cured.^  The  note  or  bond  must  be  produced,  or  a  good  reason 
given  for  its  non-production.*  The  fact  that  the  note  is  in  the 
possession  of  the  defendant  is  a  good  reason  why  the  plaintiff 
should  not  produce  it  in  evidence.  If  in  such  case  it  contain,  by 
way  of  indorsement  or  otherwise,  anything  to  the  advantage  of 
the  defendant,  he  may  avail  himself  of  it  by  offering  the  note  in 
evidence.^  If  no  personal  judgment  is  sought,  the  recitals  in  the 
mortgage,  without  producing  the  note,  are  sufficient  to  authorize 
a  foreclosure  of  the  mortgage  simply,  according  to  some  authori- 
ties,^ though  by  others  this  is  not  sufficient  unless  the  absence  of 
the  note  is  accounted  for.''  In  a  suit  against  a  subsequent  pur- 
chaser, after  the  death  of  the  mortgagor  and  nearly  twenty  years 
after  the  maturity  of  the  mortgage,  a  very  satisfactory  showing  of 
a  continuing  obligation  is  required,  in  the  absence  of  the  securities 
themselves.^ 

Secondary  evidence  of  the  contents  of  the  note  and  mortgage 
are  inadmissible  until  proof  is  made  of  the  loss  or  destruction  of 
the  originals.^ 

1470.  It  is  not  generally  necessary  to  prove  payment  of 
the  consideration  money,  unless  this  is  put  in  issue  by  the  plead- 
ings, as  the  deed  itself  is  sufficient  evidence  of  it.^'^ 

1  Boswell  V.  Goodwin,  31  Conn.  74,  81.     71  111.485  ;  Hungerford  v.  Smith,  34  Mich. 
See  Schumpert  v.  Dillard,  55  Miss.  348.  300  ;  Schumpert  v.  Dillard,  supra. 

2  Hou<,'h  V.  Bailey,  32  Conn.  288  ;  Boyd  ''  Hawes  v.  Khoads,  34  Ind.  79. 

V.  Parker,  43  Md.  1 82.  6  Arnold  v.  Stanfield,  8  Ind.  323 ;  Hawes 

'  Dorsch   V.    Rosenthall,  39   Ind.  209;  i>.  Ilhoads,  supra. 

Cleavenger  v.  Beatli,  53  Ind.  172;  and  see  ^  See  cases  cited  above,  and  Bennett  v. 

Hadley  v.  Cliapin,  11  Paige  (N.  Y.),  245.  Taylor,  5  Cal.  502.    Because  the  mortgage 

*  Beers  v.  Hawiey,  3  Conn.  110;  Lucas  is  a  mere  incident  to  the  debt. 

i;.  Harris,  20  111.  165  ;  Moore  v.  Titman,  ®  Hungerford  v.  Smith,  supra- 

35   111.  310;    Burgwin    v.  Richardson,  3  »  Dowden  v.  Wilson,  71  III.  485. 

Hawks  (N.  C),  203;  Dowden  v.   Wilson,  ^''  §§  610,  613;  Minot  v.  Eaton,  4  L.  J. 


Ch.  134. 


424 


THE    BILL    OR   COMPLAINT.  [§  1471. 

A  mortgage  made  without  consideration,  and  under  a  promise 
never  performed,  is  void  for  all  purposes  as  against  the  mortgagor, 
whether  in  the  hands  of  the  mortgagee  or  of  a  third  person  who 
has  taken  it  as  security  without  notice  of  the  want  of  considera- 
tion.i  The  assignee  could  only  take  what  the  mortgagee  could 
give  him,  and  that  was  nothing  at  all.  He  can  stand  in  no  better 
situation  than  the  mortgagee  himself;  and  his  only  remedy  is 
against  the  mortgagee. 

1471.  The  bill  must  show  that  a  right  of  action  has  ac- 
crued. The  right  of  action  to  foreclose  a  mortgage,  in  general, 
accrues  upon  any  breach  of  the  condition.  If  there  are  several 
breaches,  it  is  necessary  to  allege  and  prove  only  one  ;  and  if  sev- 
eral are  alleged,  it  is  only  necessary  to  prove  one  to  be  entitled  to 
a  decree.2  If  the  mortgagee's  right  to  the  money  secured  by  the 
mortgage  is  expressly  made  dependent  upon  his  complying  with  a 
certain  requirement,  as,  for  instance,  the  perfecting  of  the  title  in 
some  particular,  the  bill  to  foreclose  the  mortgage  must  distinctly 
allege  the  performance  of  such  condition  precedent.^  If  the  mort- 
gage debt  is  payable  upon  demand,  the  mortgagee  may  proceed  at 
any  time  to  foreclose  and  need  not  make  or  allege  a  previous  de- 
mand ;  *  and  althougli  tlie  interest  has  been  regularly  paid,^  if  no 
time  of  payment  be  limited  in  a  mortgage,  it  is  payable  within  a 
reasonable  time,*^  and  generally  would  be  regarded  as  due  upon 
demand.  If  the  mortgage  secures  a  debt  already  due,  and  it 
specifies  no  time  of  payment,  it  may  be  foreclosed  at  any  time.'' 

It  is  no  valid  defence  to  the  foreclosure  of  a  mortgage  contain- 
ing a  clause  making  the  principal  sum  due  in  case  of  default  in 
paying  the  interest  for  a  certain  time  after  it  is  due,  that  the  de- 
fendant was  unable  to  find  the  holder  of  the  mortgage  until  after 
the  time  for  paying  the  interest  had  passed,  unless  the  answer 
alleges  fraud  on  the  part  of  the  plaintiff  to  prevent  the  payment 
of  interest.^     Tiie  court  will  not  stay  the  suit  when  such  default 

'   I'arker  r.  Clarke.  30  Bcnv.  54.      Tlic  ''  Austin   i;.   Burlmnk,   '2  Day  (Conn.), 

mortgage  in  this  case  wa.s  f;ivcn  liy  a  per-  474. 

Hon  in  prison,  under  jiromi.scs   to  release  '^  Triebert  r.  Burj^cBs,  1 1  AM-  452. 

him  wliifh  were  never  rtalizcd.  '   Wri^^lit  v.  Sliuinway,  1  Biss.  2.3. 

2  Beckwitli  V.   Wind.ior  Manuf.  Co.  14  "  DwiKlit  i-.  WeKstcr,  32  Barh.  (N.  Y.) 

Conn.  594,  f.02.  47;  10  Abb.  Pr.  ;  liUlow.  (N.  Y.)  I'r.349  ; 

8  Curtis  I).  Goodenow,  24  Mich.  18.  and  nee  Uosseel  v.  Jarvifl,  15  Wis.  r)7l. 

♦  Sec  chapter  xxv;  Gillett  v.  Balcom, 
6  Barb.  (N.  Y.)  370. 

425 


5^§   147-J-l  ITl.]       FORFCLOSUUK    BY    KQUlTAnLE    SUIT. 

of  tlu>  wIidU'  (lobt  occurs  tlinuigli  the  mere  negligence  of  the  mort- 
gagor.^ 

1472.  A  bill  to  foreclose  an  mdemnity  mortgage  must  allege 
a  payment  on  account  of  the  liability  h>i'  which  the  security  was 
given,"-^  and  the  ])reeise  amount  paid  r^  though  if  the  aggregate 
sum  ]iaid  be  stattnl  it  is  not  necessary  that  the  several  sums  con- 
stituting this  should  be  set  out  in  detail.* 

1473.  An  allegation  in  the  bill  that  a  person  made  a  de- 
fendant has,  or  claims  to  have,  a  lien  on  the  premises,  which, 
if  it  exists,  is  subsecpient  to  the  plaintiff's  mortgage,  sufficiently 
shows  that  he  is  a  proper  party  ;^  and  such  allegation  is  not  bad 
on  demurrer  as  stating  no  cause  of  action  against  him.  What  his 
interest  in  the  property  may  be  is  only  important  in  determining 
the  rights  to  the  surplus.^  Though  this  general  allegation  of 
interest  is  held  sufficient,  it  is  also  the  practice  to  allege  the  nat- 
ure of  the  interest  of  each  subsequAit  incumbrancer,  as  that  he 
claims  to  have  an  incumbrance  by  mortgage,  the  date  and  record 
of  which  are  given,  or  by  judgment  entered  at  such  a  date.^ 

If  any  one  of  the  defendants  is  an  infant,  this  fact  should  ap- 
pear, with  a  statement  of  his  interest  in  the  premises,  so  that  a 
guardian  may  be  appointed. 

1474.  The  bill  must  show  that  defendant's  interest  is 
subject  to  the  mortgage.  Unless  the  bill  discloses  that  the  in- 
terest of  a  person  named  as  a  defendant  is  an  interest  junior  or 
inferior  to  the  mortgage  lien  of  the  plaintiff,  it  is  insufficient  to 
support  a  judgment  against  him.  It  should  allege  that  his  claim 
is  subject  to  the  lien  of  the  mortgage.^  But  if  a  defendant  be 
joined  upon  the  allegation  that  he  has  or  claims  some  interest  ad- 
verse to  the  plaintiff,  the  nature  and  amount  of  which  the  latter  is 
ignorant  of,  and  desires  that  the  defendant  may  be  compelled  to 
disclose,  and  such  defendant  answers  by  a  general  denial,  he  is  in 
no  condition  to  question  a  judgment  foreclosing  the  defendant  of 

1  Noyes  i-.  Clark,  7  Paige  (N.  Y.),  179.  "  Drury  v.  Clark,  16  How.  (N.  Y.)  Pr. 

■2  Shepard  i;.  Shepard,  6  Conn.  37  ;  Col-  424.     See  Frost  v.  Koon,  30  N.  Y.  428, 

licr  V.  Ervin,  2  Mon.  T.  33.').     See  §§379-  448. 

387.  '  1  Crary  N.  Y.  Prac.  289. 

3  Seeleyj;.  Hills  (Wis.),  7  Reporter,  312.  "  See§1440;  Shortv.  Nooncr,  16  Kans. 

♦  Dyer.  Mann,  10  Mich.  291.    See,  how-  220;    Nooner  v.    Short,   20    Kans.   644; 

ever,  Shepard  v.  Shepard,  sujira.  Neitzel  v.  Hunter,  19  Kans.  221. 

5  Bowen  v.  Wood,3.'3  Ind.  268  ;  Aldrich 
V.  Lapham,  6  How.  (N.  Y.)  Pr.  129. 
426 


THE    BILL    OF    COMPLAINT.  [§§  1475-1478. 

all  right,  title,  and  interest  in  the  premises  adverse  to  tlie  plain- 
tiff, because  his  answer  denies  that  he  has  any  claim  or  interest 
therein. 1 

1475.  All  the  relief  sought  for  in  the  action  should  be 
prayed  for  in  the  bill,  inasmuch  as  the  court  will  not  generally 
grant  any  relief  not  demanded  in  the  complaint,  especially  when 
no  answer  is  interposed.^  As  will  be  noticed  in  a  subsequent 
chapter,  a  judgment  for  the  deficiency  may  be  had  in  most  of  the 
states  where  foreclosure  is  obtained  by  an  equitable  action,  at  the 
same  time  that  a  decree  for  a  sale  of  the  property  is  entered  ; 
but  if  both  of  these  remedies  are  desired,  the  complaint  must  ask 
for  them  ;  for  otherwise,  after  default,  no  judgment  for  a  defi- 
ciency can  be  rendered ;  ^  and  the  omission  of  a  prayer  for  a  sale 
of  the  property  is  ground  for  demurrer.* 

1476.  The  essential  grounds  for  relief  or  decree  asked  for 
must  be  set  out  in  the  bill ;  as,  for  instance,  if  the  priority  of  the 
mortgage  depends  upon  the  fact  that  it  was  given  for  purchase 
money,  or  upon  the  fact  that  subsequent  mortgagees  had  notice  of 
the  mortgage  before  they  took  their  liens  upon  the  property,  no 
relief  founded  on  these  facts  can  be  given  unless  they  are  stated  in 
the  bill  ;  though  being  a  formal  defect  the  bill  may  be  amended.^ 

1477.  A  personal  judgment  for  a  deficiency  cannot  be  en- 
tered against  a  defendant  unless  it  is  asked  for  in  the  complaint.^ 
But  such  a  judgment  may  be  entered  upon  a  complaint  which 
asks  that  the  mortgage  shall  be  foreclosed,  that  the  mortgaged 
property  shall  be  sold  to  pay  the  debt  evidenced  by  the  note,  and 
to  pay  the  costs,  attorney's  fees,  &c.,  and  that  execution  shall  be 
issued  for  the  balance.  A  petition  no  more  defective  than  this 
may  be  amended  at  any  time,  without  costs,  so  as  to  make  it 
ffirmal." 

1478.  When  the  mortgage  secures  several  notes,  some  of 
which  are  not  due  when  the  bill  is  filed,  the  complainant  should 

1  Blandin  v.  Wade,  20  Kaiis.  251.    And  *  Santiicruz  i-.  Siintacrn/,,  44  Miss.  714. 

gee  Bradley  i;.  I'arkhurst,  20  Kniis.  4»12.  ^  Arinstrong  v.  Koss,  20  N.  J.  Iv|.  109  ; 

"  Buliwiukcr  v.  Uyker,  12  Abb.  (N.  Y.)  lowii  County  v.  Mineral  I'oiiit  U.  K.  Co. 

I'r.  311  ;  and  sec  Grant  i;.  Van  Dcrcook  24  Wis.  93. 

8  Abi).  (N.  Y.)  Pr.  N.  S.  4.55;  57  Barb.  «  Simonson   v.  Blake,   12  Al)b.  (N.  Y.) 

165.  Pr.  .331  ;  20  How.  I'r.  484  ;  Kreneli  v.  Now, 

«  Simonson  v.  Blake,  20  How.  (N.  Y.)  20  Barb.  (N.  Y.)  484  ;  BuUwinkerr.  Uykcr, 

Pr.  484  ;  12  Abb.  Pr.  .331  ;    Hansford  v.  12  Abb.  (N.  Y.)  Pr.  311. 

Hoidam    (Ky.  Sept.   1878),    7   Ileportcr,  '  Footc  u.  Spraguo,  13  Kan.s.  155. 
177. 

427 


§§  1479,  1480.]       FOHKCLOSURE   BY   EQUITABLE   SUIT. 

ask  in  liis  hill  that  so  iiiiu-h  of  the  tleht  as  may  hecorae  due  be 
fore  liiial  dfrrt'i'  sluuilcl  he  iiu-liidtMl  in  it.^  It  is  irregular  to  in- 
clude in  the  jiulgincnt  a  woU^  Mhicli  matured  after  the  filing  of 
the  bill,  unless  some  fi)undation  is  laid  for  it  in  the  pleadings.  If 
this  is  not  done  a  supplruu'ntal  bill  should  be  filed,  praying  that 
the  note  whieh  has  matured  since  the  filing  of  tlie  bill  should  be 
includetl  in  the  decree.-  The  action,  however,  cannot  be  com- 
menced before  anything  is  due,  and  then  be  made  good  by  a  sup- 
plemental complaint  after  a  portion  of  it  has  matured  -/^  but  the 
action  being  properly  begun,  additional  relief  may  in  this  way  be 
had  for  rifrhts  that  have  since  accrued.* 

3.   The  Answer  and  Defence. 

1479.  In  general.  —  Besides  the  special  defences  arising  out 
of  the  circumstances  of  the  particular  case,  there  may  of  course 
be  as  many  general  defences  as  there  are  general  allegations  in 
the  bill  or  complaint,  as  well  as  the  defences  applicable  to  con- 
tracts generally.  There  may  be  a  denial  of  the  execution  and 
delivery  of  the  mortgage,  and  of  the  plaintiff's  right  to  maintain 
the  action  ;  a  denial  of  personal  liability ;  a  denial  of  any  title  in 
the  mortgagor  at  the  time  of  giving  the  mortgage ;  an  allegation 
of  want  of  consideration,  usury,  or  the  statute  of  limitations ; 
an  allegation  of  a  counter-claim  or  set-off ;  of  non-joinder  of  de- 
fendants ;  of  a  discharge  ;  of  an  equity  of  redemption  in  a  part 
of  the  j3remisL's,  and  an  equitable  right  to  require  the  sale  of  the 
residue  of  them  first  ;  and  finally,  a  disclaimer  of  title  or  interest. 
Some  of  these  defences  will  be  illustrated  with  such  citations  of 
cases  as  seem  of  general  importance  and  application. 

As  a  general  rule  one  defendant  cannot  by  his  answer  impeach 
the  mortgage  of  a  co-defendant;  although  he  alleges  in  his  an- 
swer that  such  mortgage  was  fraudulent  and  void,  his  co-defend- 
ant, to  whom  it  belongs,  is  not  bound  to  put  in  any  defence. 
Such  answer  cannot  be  taken  as  confessed  against  him.  One  de- 
fendant can  have  relief  against  another  only  upon  a  cross-bill.^ 

1480.  An  answer  founded  upon  a  release  or  any  written  in- 

1  Sec  §§606,  1459,  1577,  1591,  1700;  ^  Candler  y.  Pettit,  1  Paige (N.  Y.),  168; 

Malcolm  v.  Allen,   49  N.  Y.  488 ;    Dau  Bostwick  v.  Menck,  8  Abb.  N.  S.  (N.  Y.) 

Hartop:  v.  Tibbitts,  1  Utah  T.  328.  Pr.  169. 

-  Williams  v.  Creswcll,  51  Miss.  817.  ^  Brinkerhoff  v.  Franklin,  21  N.  J.  Eq. 

8  McCullough  V.  Colby,  4  Bosw.  (N.  Y.)  334 ;  Vandervcer  v.  Holcomb,  lb.  105. 
603. 

428 


THE  ANSWER  AND  DEFENCE.    [§§  1481,  1482. 

strument  may  set  it  out  at  length  with  proper  averments,  oi-  may 
give  a  brief  description  of  it,  with  averments  of  the  facts  connected 
therewith.  An  answer  which  states  merely  a  conclusion  of  law, 
without  facts  to  support  it,  as,  for  instance,  that  the  mortgage  is 
of  no  Vnnding  effect,  and  no  lien  upon  the  premises  described,  is 
unavailing.^ 

1481.  The  denial  of  an  allegation  must  be  explicit,  and  not 
be  left  to  be  inferred.  Where  a  complaint  sets  forth  the  condition 
of  a  bond,  and  avers  that  a  mortgage  securing  it  was  executed 
"  with  the  same  condition  as  said  bond,"  an  answer  which  merely 
repeats  the  words  of  the  condition  as  stated  in  the  complaint,  and 
avers  that  it  is  not  contained  in  the  mortgage,  is  not  a  denial 
that  such  was  in  substance  the  condition  of  the  mortgage.  The 
answer,  to  avail  anything,  should  at  least  show  that  there  was 
nothing  on  the  face  of  the  mortgage  to  connect  it  with  the  bond.^ 

1482.  The  mortgagee's  title  cannot  be  questioned  in  defence 
to  the  bill.  This  can  only  be  investigated  at  law.^  If  he  took, 
by  virtue  of  his  mortgage,  any  estate  whatever  which  is  still  sub- 
sisting, he  is  entitled  to  a  decree  ;  and  the  court  will  not  inquire 
what  interest  he  has  in  the  mortgaged  estate,  or  whether  he  has 
any  interest  at  all  in  some  part  of  it.* 

An  exception  is  apparently  made  to  this  rule  that  the  title  is 
not  in  issue,  in  cases  where  usury  may  be  shown  in  defence  under 
statutes  which  would  make  the  deed  absolutely  void,  and  usury 
in  the  loan  is  established.  This,  however,  is  not  strictly  an  inves- 
tigation of  the  title,  but  rather  of  the  validity  of  the  instrument ; 
just  as  this  is  the  inquiry  when  it  is  claimed  that  the  maker  of  it 
was  not  of  sound  mind,  or  that  he  made  it  under  duress,  or  that 
he  did  not  make  it  at  all.^ 

The  owner  of  the  equity  of  redemption  subject  to  two  mort- 

*  Caryl  i».   Williams,  7   Laus.  (N.  Y.)  and  yet  it  may  refer  to  the  bond  in  such 

416.  a  manner  as  to  adopt  its  provisiona."  Per 

^  Dimon  v.  Dunn,  15  N.  Y.  498;  revcrs-  Chief  Justice  Dcnio. 

ing,  Dimon  v.  Bridges,  8  IIow.  Pr.  16.  •''  Uull  v.  Meloney,  27  Conn.  560  ;  Pal- 

"  It  simply  pleads  the  exifltence  of  ccr-  mcr  v.  Mead,  7   Conn.   149  ;    Broome  t;. 

tain  lanminne,  without  denying;   the  sub-  Beers,  6  Conn.  198;  Anderson  v.  Baxter, 

Btance  of  the   contract  as  set  out  in  the  4  Oregon,  105. 

compliiint,  and    without   setting   out   the  *  Hill  v.  Meeker,  23  Conn.  592  ;  Wooden 

contract  itself,  so  that  the  court  may  see  v.  Haviiaiid,  18  Conn.  101  ;  Williams  v. 

wliat  it  is.    It  may  be  well   that    nothing  Boiiinson,  16  Conn.  517. 

is  said,  in  terms,  in  the  mortgage,  as   to  ^  Cowles  v.  Woodruff,  8  Conn.  35, 
the  effect  of  the  non-j)Byment  of  interest; 

429 


Js  MSo.]  F0RF.CL0SIM5K    RY    F.QUITABLK   SUIT. 

frames  cannot  objoot  that  the  senior  mortgagee  yiehls  liis  priority 
of  lien  to  the  junior  mortgagee. ^ 

It  is  no  defence  that  the  mortgage  was  executed  hy  the  heirs  of 
the  owner  after  his  deatli,  and  that  ho  left  debts  which  remain 
nniniid,  and  that  the  estate  is  under  administration  in  the  probate 

court.'- 

1483.  A  mortgagor  is  estopped  to  deny  his  title.  He  can- 
not set  u[)  as  a  defence  for  himself  against  the  mortgagee,  that 
the  property  so  mortgaged  is  trust  property  which  he  had  no  right 
to  mort>Mfe.  He  cannot  cUiim  adversely  to  his  deed,  but  is  es- 
topped by  it.3  Wliether  this  estoppel  arises  from  the  making  of 
the  mortf^acre  deed,  or  from  the  relation  of  the  mortgagor  at  com- 
mon law  as  a  quasi  tenant  of  the  mortgagee,  or  from  (ixpress  or 
implied  covenants  for  title,  has  been  an  unsettled  question.  But 
at  the  present  time,  and  especially  where  a  mortgage  is  merely  a 
lien  and  not  a  title,  this  estoppel  must  be  regarded  as  arising  only 
from  a  covenant  for  title,  express  or  implied.  In  the  absence  of 
such  a  covenant  the  mortgagor  may  therefore  show  what  his  inter- 
est in  the  mortgaged  lands  was  at  the  time  of  the  delivery  of  the 
morto-an-e,  and  may  show  that  a  subsequently  acquired  title  does 
not  etuu-e  to  the  benefit  of  the  mortgagee.*  A  wife  joining  her 
husband  in  a  deed  of  his  land,  but  not  making  any  covenants,  is 
not  estopped  to  claim  title  to  the  land  under  a  mortgage  held  by 
her.^  The  decree  binds  his  interest,  whatever  that  may  be,  and 
nothin''  more.*^  A  mortgage  made  by  the  heirs  of  a  deceased 
owner,  before  the  settlement  of  the  estate,  cannot  be  objected  to 
by  them  on  the  ground  that  the  creditors  and  legatees  of  the  es- 
tate have  not  been  paid.'  A  mortgagor  may,  however,  in  an 
action  brought  by  an  assignee,  set  up  and  prove  a  mistake  in  the 
drawing  of  the  instrument  and  have  it  reformed.^  But  it  has 
been  held  that  a  mortgagor  who  had  given  a  mortgage  upon  land 
held  by  him  under  the  preemption  act,  after  filing  his  declaratory- 
statement  and  before  entry,  and  therefore  void,  was  not  estopped 

1  Mobile  &  Cedar  Point  R.  11.  Co.  v.         ^  Van  Araburgh  v.  Kramer,  16  Hun  (N 
Talman,  15  Ala.  472.  Y.),  205. 

2  Cook  V.  I)c  la  Guerra.  24  Cal.  237.  «  Bird  v.  Davis,  14  N.  J.  Eq.  467.     See 
8  §§  682,   683;    Boisclair  v.  Jones,  36     Iloff  v.  Burd,  17  lb.  201. 

Ga.  499  ;  UMoa  v.   Wilder,   58   Ga.    178  ;         ^  Cook  v.  De  la  Guerra,  supra. 
Strong  V.  Waddell,  56  Ala.  471.  »  Andrews  v.  Gillespie,  47  N.  Y.  487. 

*  National   Fire  Ins.  Co.  v.  McKay,  1 
Sheldon  (N.  Y.),  138. 
430 


THE  ANSWER  AND  DEFENCE.     [§§  1484,  1485. 

from  setting  up  the  invalidity  of  it  in  defence  when  no  fraud,  mis- 
representation, or  conceahnent  on  his  part  was  shown.i 

1484.  The  mortgagor  may  be  estopped  by  his  declarations 
or  agreements  from  setting  up  a  defence  otlierwise  valid  ;  as  where 
a  purchaser  of  land  subject  to  a  mortgage  admitted  to  a  third  per- 
son that  it  was  all  right  and  valid,  and  thereb}^  induced  him  to 
buy  it,  he  was  not  allow.ed  afterwards  to  urge  a  failure  of  consid- 
eration of  the  mortgage  to  the  injury  of  the  assignee.^  And  so  he 
may  be  estopped  from  taking  advantage  of  a  sale  made  without 
proper  authority  in  the  officer  to  sell,  because  no  judgment  of  fore- 
closure had  been  entered  on  the  mortgage  ;  his  admission  that  the 
debt  was  due ;  his  acts  at  the  sale  in  forwarding  it  and  waiving 
matters  of  form  ;  his  delivery  of  possession  to  the  purchaser,  and 
his  standing  by  and  suffering  purchasers  to  improve  the  property, 
are  sufficient  for  this  purpose.^  And  so  where  a  mortgage  made 
by  one  member  of  a  banking  firm  to  his  copartner  was  sold  by 
them  to  a  purchaser,  with  the  representation  that  it  was  a  good 
bond  and  mortgage,  each  of  them  was  held  to  be  estopped  from 
setting  up  the  defence  of  usury.*  A  mortgagor  who  has  induced 
another  to  take  an  assignment  of  his  mortgage  is  estopped  from 

,  denying  the  validity  of  it  in  the  assignee's  hands.^ 

1485.  Defences  against  assignee.  —  It  is  not  often  that  the 
mortgage  is  an  obligation  to  the  mortgagee  personally  which 
neither  his  assignee  nor  personal  representative  can  enforce  ;  yet 
such  a  mortgage  may  be  made  ;  and  such  was  held  to  be  the  effect 
of  a  mortgage  which  was  the  only  evidence  of  the  indebtedness 
secured,  and  this  was  "  to  be  paid  by  the  mortgagor  to  the  mort- 
gagee, when  called  on  by  said  mortgagee  ;  and  the  mortgagor  does 
not  agree  to  pay  the  above  sum  to  any  one  else  except  the  mort- 
gagee." The  mortgagee  iiaving  died  without  demanding  payment, 
his  administrator  could  not  make  demand,  and  maintain  a  suit 
upon  the  mortgage.^  It  may  be  presumed  in  such  a  case  that  the 
mortgagee  intended  that  the  debt  should  not  be  paid  at  all  unless 
lie  himself  should  see  proper  to  demand  it ;  and  that  if  he  made 
no  demand  the  indebtedness  should  be  retained  by  the  mortgagor 

1  Brewster  v.  Madden,  15  Kans.  249.  ••   IloulUcr  v.  WcstcoU.  15  Ilun  (N.  Y.) 

«  Smith  V.  Newton,  38  111.  230.  243. 

"Cromwell  t;.  liauk  of  Tittsburg,  2  f^  .Johnson  y.  rarmely,  14  ilun  (N.  Y.), 
Wall.  Jun.  50'J.  398  ;  Norris  v.  Wood,  H).  I'JG. 

ti  SebrcU  V.  Couih,  55  Ind.  122. 

431 


§  148(>.]  KORKCi.osuPvi:  by  kquitablk  suit. 

as  11  Ljift;  iuul    liaving  tlioil  without  in:iking  such  demaml  the  gift 
became  complete. 

In  those  states  in  wliicth  a  transfiM-  of  the  mortgage  note  carries 
with  it  the  mortgage  security,  it  is  no  defence  to  a  suit  by  an  as- 
signee that  he  had  no  formal  assignment  of  the  mortgage.^  The 
fact  that  he  j>uiehased  the  mortgage  at  a  discount  is  no  defence.^ 
If  the  assignment  was  obtained  by  fraud,  the  defendant  may 
show  that  he  has  paid  it  to  the  mortgagee  from  whom  the  phiin- 
tiff  so  obtained  it.^ 

Where  an  assignee  seeks  to  foreclose  a  mortgage  which  the 
mort<^afTee  testifies  was  given  without  consideration  moving  from 
him,  and  that  he  assigned  it  at  the  request  of  one  of  the  mort- 
gagors without  consideration,  this  evidence  casts  upon  the  com- 
phiinant  the  burden  of  proof  that  there  was  a  consideration  for 
the  mortgage."* 

1486.  Assignee  need  not  have  paid  value.  —  It  is  not  nec- 
essary to  constitute  a  bond  fide  holding  by  the  assignee  that  he 
should  have  paid  value  for  the  security  at  the  time  of  receiving 
it.  A  part  consideration  is  sufficient.^  A  farmer  and  his  wife, 
on  the  line  of  a  proposed  railroad  in  Wisconsin,  subscribed  to 
stock  in  the  road,  and  mortgaged  their  farm  to  secure  a  negotia- 
ble note  given  in  payment  of  the  subscription,  upon  representa- 
tions made  by  agents  of  the  road  and  others  that  the  road  would 
prove  a  very  lucrative  investment,  and  a  very  profitable  thing  to 
the  neighborhood.  After  a  good  deal  of  money  had  been  laid  out 
in  grading  and  other  work  upon  the  road,  the  further  building 
of  it  was  stopped  for  want  of  funds,  and  it  remained  unfinished. 
The  mortgage  having  been  assigned  before  maturity  to  a  director 
of  the  road,  who  was  also  a  large  creditor  of  it  at  the  time  the 
mortgage  was  made,  upon  a  bill  filed  by  him  to  foreclose  it,  he 
was  held  to  be  a  bond  fide  holder  for  value,  and  entitled  to  a 
decree.^ 

1  Rice  V.  Cribb,  12  Wis.  179  ;  Jackson  v.         ^  Croft  v.  Bunster,  supra. 

Blodget,  5  Cow.  (N.  Y.)  205;  Jackson  v.  «  Sawyer  v.  Prickett,  19  Wall.  146.     In 

Willard,  4  Johns.  (N.  Y.)4;3.  this   case,   moreover,    the   representations 

2  Knox  V.  Galligan,  21  Wis.  470;  Croft  were  not  considered  binding;,  because  they 
V.  Bunster,  9  Wis.  503;  Grissler  v.  Tow-  were  promissory,  and  not  representations 
ers,  53  How.  Pr.  (N.  Y.)  194,  and  cases  of  existing  facts  peculiarly  within  the 
cited.  knowledge    of   the  party    making    them. 

3  Hall  V.  Erwin,  60  Barb.  349;  57  N.  And  see  Leavitt  v.  Pell,  27  Barb.  (N.  Y.) 
Y.  643  ;  66  N.  Y.  649.  322. 

*  Bishop  f.  Fclch,  7  Mich.  371. 
432 


THE  ANSWER   AND  DEFENCE.  [§§  1487,  1488. 

1487.  When  assignee  takes  free  from  equities.  —  The  as- 
signee before  maturity  of  a  negotiable  note  secured  by  mortgage 
takes  it  free  from  any  equitable  defences  which  the  mortgagor 
might  have  had  against  it  in  the  hands  of  the  mortgagee,  of  which 
the  assignee  had  no  notice  at  the  time  the  assignment  was  made.^ 
When  a  defence  valid  against  the  assignor  is  made,  the  plaintiff 
must  show  that  he  is  a  bond  fide  purchaser  for  value,  where  that 
issue  is  raised  by  the  pleadings.^  The  rule  in  this  respect  is  the 
same  whether  the  negotiable  note  is  secured  by  a  mortgage  or  not. 
"  The  contract  as  regards  the  note,"  says  Mr.  Justice  Swayne,^ 
''  was,  that  the  maker  should  pay  it  at  maturity  to  any  bond  fide 
indorsee,  without  reference  to  any  defences  to  which  it  might  have 
been  liable  in  the  hands  of  the  payee.  The  mortgage  was  con- 
ditioned to  secure  the  fulfilment  of  that  contract.  To  let  in  such 
a  defence  against  such  a  holder  would  be  a  clear  departure  from 
the  agreement  of  the  mortgagor  and  mortgagee,  to  which  the  as- 
signee subsequently  in  good  faith  became  a  party.  If  the  mort- 
gagor desired  to  reserve  such  an  advantage,  he  should  have  given 
a  non-negotiable  instrument.  If  one  of  two  innocent  persons 
must  suffer  by  a  deceit,  it  is  more  consonant  to  reason  that  he  who 
'  puts  trust  and  confidence  in  the  deceiver  should  be  a  loser  rather 
than  a  stranger.'  "  *  Moreover,  the  mortgage  being  considered 
a  mere  incident  of  the  debt,  an  accessory  to  the  principal  thing, 
the  rights  of  the  assignee  in  respect  to  the  mortgage  are  deter- 
mined by  his.  rights  respecting  the  debt.^  If,  therefore,  the  mort- 
gage be  given  to  secure  the  payment  of  a  non-negotiable  note  or 
bond,  the  assignee  takes  it,  as  he  would  such  note  or  bond,  sub- 
ject to  the  equitable  defences  which  the  defendant  would  have 
against  it  in  the  hands  of  the  assignor.^ 

1488.  It  is  a  good  objection  to  a  suit  that  the  complainant 
has  parted  with  his  interest  in  the  mortgage  before  the  time  of 

1  See  §834;  Carpenter  v.  Longan,  IC  396;  Palmer  i;.  Yates,   3   Sandf.  (N.  Y.) 

Wall.  271  ;  Taylor  v.  Page,  6  Allen  (Mass.),  137. 

86  ;  Pierce  v.  Faiince,  47  Me.  .507  ;  Reeves  2  Qetzlaff  v.  Seiiger,  43  Wis.  297. 

V.  Scully,  Walk.  (Mich.)  Ch.  248  ;  Cicotte  *  See  Carpenter  v.  Longan,  supra. 

p.  Gagnier,  2  Mich.  381  ;  Bloomer  r.  Hen-  *  "  Accessorium    non     ducit,    sequitur 

derson,  8  Mich.   395;    Fisher  v.    Otis,   3  siium  principale." 

Chand.  (Wis.)  83;    Martineau  v.  McCol-  ''  Carpenter   v.  Longan,  supra;  Marti, 

lum,  4  Ih.  153;  Croft  v.  Biinster,  9  Wis.  neau  v.  McCoUum,  4  Chand.  (Wis.)  153; 

503  ;    Cornell   v.  Hichens,    1 1    Wis.  353.  Potts  v.   Blackwell,  4  Jones  ICj.  (N.  C.) 

Contra,  see  Baily  v.  Smith,  14  Ohio  St.  58;  Bennett  r.  Taylor,  5  Cal.  502. 

«  Matthews  V.  Wallwyn,  4  Ves.  126. 

VOL.  a.    •                  28  433 


§§  1480,  1490.]       FORECLOSURK    KY    EQUITARLK    SUIT. 

answering  ;  the  party  in  interest  is  not  before  the  court. ^  On  the 
other  liund,  a  defendant  who  has  no  interest  in  the  property  can- 
not assail  tiie  mortgage.-  If  the  mortgagor,  after  having  suffered 
a  bill  of  foreclosure  to  be  taken  as  confessed  against  him,  conveys 
his  interest  in  the  property,  the  purchaser  takes  it  subject  to  the 
rights  Avhieh  the  complainant  has  acquired  in  the  suit,  and  to  the 
admissions  made  by  the  mortgagor's  default ;  and  no  defence  can 
then  be  taken  which  would  not  have  been  open  to  the  mortgagor 
had  he  not  sold  his  interest.^ 

1489.  Indemnity.  —  Although  the  condition  of  a  mortgage 
nuiy  bo  for  the  payment  of  a  certain  sum  of  money,  it  is  com- 
petent to  show,  by  parol  evidence,  that  the  mortgage  was  really 
given  to  indemnify  the  mortgagee  as  a  surety,  and  that  his  liabil- 
ity has  been  discharged  without  his  being  damnified.  The  effect 
of  such  proof  is  not  to  contradict  or  vary  the  mortgage,  but  to 
indemnify  the  demand  to  which  it  really  refers.*  If  there  has 
been  no  breach  of  the  condition  of  a  mortgage  of  indemnity,  there 
can  be  no  foreclosure  of  it.^ 

Where  a  suit  is  brought  to  foreclose  a  lost  mortgage  and  note, 
the  defendant  cannot  resist  the  payment  of  either  principal  or 
costs  on  the  ground  of  a  refusal  to  give  him  indemnity .''  In  case 
the  defendant  is  entitled  to  any  indemnity,  he  cannot  take  advan- 
tage of  the  right  in  this  suit,  unless  that  he  can  show  he  was 
ready  before  suit  to  tender  payment  on  receiving  indemnity.'^ 

1490.  "Want  of  consideration  for  the  mortgage  or  failure  of 
it  is  a  good  defence  to  it.^  A  partial  failure  of  consideration  is  a 
defence  /)?-o  tanto.  These  defences  must  be  distinctly  pleaded.^ 
A  mortgage  given  in  consideration  that  the  mortgagee  should  serve 
nine  months  in  the  army  as  a  substitute  for  the  mortgagor,  who 
had  been  drafted,  cannot  be  enforced  when  it  appears  that  the 
mortgagee  deserted  within  a  few  weeks  after  being  mustered  into 
the  service. ^"^ 

1  Wallace  v.  Dunning,  Walk.  (Mich.)         ^  Massaker  w.  Mackcrley,  1  Stockt.  (N. 
416  ;  and  see  Smith  v.  Bartholomew,  42     J.)  440. 

Vt.  356.  "  §  610 ;  Conwell    v.  Clifford,   45   Ind. 

2  Carlcton  v.  Byington,  18  Iowa,  482.         392  ;  Mell  v.  Moony,  30  Ga.  413  ;  Akerly 
8  Watt  V.  Watt,  2  Barb.    (N.  Y.)  Ch.     v.  Vilas,  21  Wis.  88;  Pacific  Iron  Works 

371.  V.  Newhall,  34  Conn.  77  ;  Banks  v.  Walk- 

*  Colman  v.  Post,  10  Mich.  422  ;    Kim-  er,  2  Sandf.  (N.  Y.)  Ch.  344;  3  Barb.  Ch. 

ball  V.  Myers,  21  Mich.  276.  438. 

5  Ide  V.  Spencer,  .50  Vt.  293.  »  Philbrooks  v.  McEwen,  29  Ind.  347. 

«  Sharp  V.  Cutler,  25  N.  J.  Eq.  425.  ^^  Nelson  v.  McPike,  24  Ind.  60. 

434 


THE   ANSWER    AND   DEFENCE.  [§  1491. 

If  it  appears  that  the  mortgage  was  given  to  secure  future 
advances  which  were  never  made,  the  bill  will  be  dismissed.^  On 
the  foreclosure  of  a  mortgage  given  to  secure  the  payment  of 
judgments  confessed  by  the  mortgagor,  but  which  were  void  for 
want  of  compliance  with  the  statute,  the  defence  may  be  taken 
that  no  indebtedness  is  shown,  and  the  bill  should  be  dismissed.^ 
But  when  there  was  an  actual  consideration  for  a  mortgage,  gen- 
erally the  inquiry  cannot  be  made  whether  the  consideration  was 
full  and  adequate.^ 

1491.  One  who  buys  land  which  is  by  the  terms  of  his  deed 
subject  to  a  prior  mortgage,  whether  he  expressly  assumes  it  as 
part  of  the  purchase  money  or  not,  cannot  set  up  as  a  defence  to 
the  foreclosure  of  it  any  failure  or  want  of  consideration  in  the 
mortgage  as  between  the  parties  to  it.^  In  a  case  in  New  York 
the  owner  of  land  made  a  mortgage  to  an  insurance  company  for 
four  thousand  dollars,  upon  which  the  company  advanced  only 
two  thousand  dollars  at  the  time.  A  further  loan  from  the  com- 
pany of  two  thousand  dollars  was  then  contemplated,  but  was 
never  made.  The  owner  conveyed  his  equity  of  redemption  sub- 
ject to  the  mortgage,  for  a  consideration  expressed  in  the  deed, 
from  which  the  four  thousand  dollars  were  deducted.  Several 
subsequent  conveyances  of  the  premises  were  made  in  the  same 
manner.  Afterwards  the  owner  procured  the  insurance  company 
to  assign  the  mortgage  to  a  creditor,  who  paid  the  company  the 
amount  advanced  upon  the  mortgage,  and  credited  the  owner 
the  balance  of  the  four  thousand  dollars  secured.  The  creditor 
was  allowed  to  foreclose  the  mortgage  for  the  entire  sum  of  four 
thousand  dollars,  against  the  objection  of  the  purchaser  of  the 
equity  of  redemption,  that  it  was  a  valid  lien  for  only  the  amount 

1  McDowell  V.  Fisher,  25  N.  J.  Eq.  93.       rin^ton,  19  Wend.  471  ;    Hartley   v.   Tat- 

2  Austin  V.  Grant,  I  Mich.  490.  ham,  26  How.  Pr.  158;  Lester  v.  Barron, 

•  Norton  v.  Pattee,  68  N.  Y.  144.  40  Uarb.  297.      But  the  rule  is  established 

♦  §  744;  Hortonv.  Davis,  26  N  .Y.  395;  that  the  grantor  may  create  any  lien  he 
Price  u.  Pollock,  47  Ind.  362.  The  partial  pleases  upon  the  land,  whether  it  be 
failure  of  consideration  in  this  case  was  founded  on  any  consideration  as  between 
from  a  deficiency  in  the  quaniity  of  land,  him  and  the  person  in  who.se  favor  it  is 
In  some  of  the  earlier  ca-^es  in  New  York,  made  or  not,  and.  if  his  grantee  either  ex- 
grantees  who  had  assumed  the  payment  of  pressly  or  impliedly  undertakes  for  a  con- 
existing  liabilities  were  allowed  to  set  up  sideration  to  pay  it,  he  cannot  defend 
defences  other  than  usury  ;  all  the  author-  against  it.  Sae  cases  cited  under  tbi.s  sec- 
ities  agreeing  that  such  grantees  cannot  tion,  and  also  llittor  v.  Phillips,  53  N.  Y 
defend  on  that   ground.     Sec    Russell    v.  586. 


Kinney,  1   Sandf.  Ch.  34;  Jewell  v.  Ilar- 


436 


§  14lM.]  FORECLOSURE   BY   EQUITABLE  SUIT. 

orisiinallv  iulvunoi'il  upon  it  wllh  interest.^  Thu  court  said  tiuit 
the  purchaser's  position  was  in  no  respect  different  from  what  it 
•would  have  been  liad  the  original  owner  counted  out  in  cash 
the  sum  specified  in  the  mortgage,  and  placed  it  in  the  hands  of 
their  grantee  as  their  messenger,  with  directions  to  place  it  in  the 
hands  of  the  company,  and  he  had  placed  it  in  the  hands  of  his 
grantee,  who  had  in  turn  delivered  it  to  his  grantee,  the  owner 
of  the  equity  of  redemption,  with  the  same  directions,  who  with 
the  money  in  his  pocket  nevertheless  proposed  to  prove  that  the 
mort^^a'Te  was  not  a  valid  security  for  the  amount  in  excess  of 
the  ctrii'inal  advance.  Mr.  Justice  Hunt  said  :  "  Two  objections 
are  mainly  relied  upon  as  justifying  the  judgment  below  :  1st. 
That  the  insurance  company  advanced  only  the  sum  of  $2,000  ; 
that  they  could  have  enforced  the  mortgage  for  no  greater  amount 
against  Allen  and  Stevens  (the  mortgagors)  ;  and  that  they  could 
transfer  to  their  assignee  no  greater  rights  than  they  possessed. 
2d.  That  if  Allen  and  Stevens,  or  the  insurance  company  as  their 
trustee,  could  have  recovered  the  whole  amount,  that  it  was  a  lien 
or  equitable  claim,  and  that  the  simple  transfer  of  the  mortgage 
did  not  carry  with  it  such  lien  or  claim.  1st.  I  look  upon  the  in- 
surance company  as  holding  this  mortgage  in  a  double  capacity  ; 
as  owners  to  one  half  of  the  amount,  and  as  trustees  for  Allen 
and  Stevens  for  the  residue.  The  latter  wished  to  impose  a  mort- 
gage of  84,000  upon  the  lot.  The  insurance  company  did  not 
wish  to  advance  the  whole  amount,  and  the  mortgagees  were  will- 
ing to  accept  a  reduced  amount,  allowing  the  mortgage  to  stand 
for  its  face.  It  is  quite  true  that,  in  a  controversy  between  the 
mortgagees  and  the  company,  the  latter  could  not  have  compelled 
the  payment  of  the  full  amount.  It  is  equally  true  that,  where 
there  is  no  such  controversy,  where  the  makers  desire  it  to  be  en- 
forced to  its  nominal  amount,  where  the  holders  of  the  property 
have  consented  and  agreed  that  it  should  be  so  enforced,  and  have 
had  a  deduction  of  -^2,000  from  their  purchase  money  based  upon 
the  payment  by  them,  or  the  subjecting  the  premises  to  the  full 
amount  of  the  mortgage,  that  the  payment  in  full  should  be  en- 
forced. The  insurance  company  may  collect  the  full  sum.  They 
hold  it  for  their  own  benefit  to  the  amount  advanced  by  them';  as 
trustees  for  Allen  and  Stevens  for  the  amount  not  allowed." 

1  Freeman   v.  Auld,  44  N..Y.  50;  ovcf-     Griesler  v.  Towers,  53  How.  (N.    Y.)  Pr. 
ruling  same  case  in  37  Barb.  587.      See     194,  distinguished  from  above. 

436 


THE  ANSWER  AND  DEFENCE.    [§§  1492,  1493. 

1492.  Fraud  is  a  good  defence  when  it  is  shown  that  it  was 
practised  by  the  mortgagee  or  his  agents  upon  the  mortgagor ;  or 
when  the  mortgagee  or  his  assignee,  at  the  time  of  taking  the 
mortgage,  was  aware  that  a  fraud  had  been  committed  upon  the 
mortgagor.^  The  answer  should  distinctly  state  the  several  facts 
necessary  to  constitute  the  fraud,  and  to  bring  the  knowledge  of 
it  home  to  the  mortgagee.  The  fraud  may  be  a  defence  to  the 
whole  claim,  or  it  may  be  a  defence  in  part,  and  available  as  a 
counter-claim. 

If  the  defendant  in  a  foreclosure  suit  set  up  the  defence  that 
the  mortgage  was  procured  by  false  representations,  the  burden 
of  proving  them  of  course  lies  with  him.^ 

1493.  Usury  is  a  defence.^  —  The  effect  of  the  illegal  rate  of 
interest  may  be  obviated  if  it  can  be  shown  that  it  was  inserted 
by  mistake  when  the  parties  intended  to  provide  for  the  legal  rate 
only.*  The  law  governing  the  contract  as  to  usury  is  that  of  the 
state  where  it  was  made,  if  made  in  a  state  other  than  that  in 
which  the  mortgaged  property  is  situate.^  It  may  be  availed  of 
by  a  wife  for  the  protection  of  her  homestead  or  of  her  dower  in- 
terest, although  her  husband  be  estopped  by  his  acts  from  setting 
it  up  as  a  defence.^ 

If  the  answer  alleges  generally  that  the  mortgage  contract  is 
usurious  without  any  specific  allegation,  the  defence  must  be  lim- 
ited to  a  violation  of  the  statute  of  the  state  regarding  usury,  and 
its  usurious  character  under  any  other  statute  cannot  be  shown,'^ 
and  sueli  an  answer  under  the  systems  of  pleading  and  practice 
generally  in  vogue  would  amount  to  nothing.^  The  answer  must 
allege  the  usury,  and  strict  proof  of  the  usurious  character  of  the 
mortgage   must   be  given.^      After  default  has   been  entered,  it 

1  §§  624-632;  Aikin  v.  Morris,  2  Barl).  Cox  v.  Douglas,  12  Town,  185  ;  Outten  v. 
(N.  Y.)  Ch.  140  ;   Uucd  j;.  LatHon,  15  Harb.     Grinstcad,  4  J.  J.  Marsh.  (Ky.)  008. 

(N.  Y.)!);  Allen  v.  Shnckelton,  15  Ohio         *  Sec  §§  633-649 ;    (Irifliii  v.  N.J.  Oil 

St.  145.    And  sec  Ahhott  v.  Allen,  2  .Johns.  Co.  •')  Stockt.  (N.  J.)  40. 
(N.  Y.)  Ch.  519;  Champlin  v.  Laytin,  G         ^  §  657;  Dolman  v.  Cook,  14  N.  J.  56. 
Paif,'e(N.Y.),  189;  affirmed,  IS  Wend.  407.         "  Canipl>ell  i-.  IJahcock,  27  Wis.5l2. 

2  Sloan  V.  Holcomt),  29  Mich.  1.5.3  ;  Per-         ''  Atwater  i'.  Walker,  IG  N.  J.  Eq.  42. 
retl  .;.  Yarsdorfer,  .37  Mich.  596.  "  Mosier  v.  Norton,  8.3  III.  519. 

"  §§  633-663;  Dc  Bult.s  v.  Racon,  "  IJirhards  v.  Worthley,  5  Wis.  73; 
6  Cranch,  252;  FanninR  v.  Dunham,  5  Munter  v.  Linn  (Ala.).  2  South.  L.  J. 
Johns.  (N.  Y.)  Ch.  122  ;  Covvles  v.  Wood-  205.  Sec  Huldwin  v.  Norton,  2  Conn.  IGl  ; 
niflF,  8  Conn.  35  ;  Piatt  v.  Uol)inson,  10  Wlieaton  v.  Voorhia,  .5.3  How.  (N.  Y.)  Pr. 
Wis.  128  •  Fay  v.  Lovejoy,  20  Wis.  407  ;     319  ;  .Maher  v.  Lanfrom,  80  III.  513. 

437 


§  14l>:).]  FOKKCLOSUUK    HY    KQUITAHLK    SUIT. 

woulil  soein  that  it  will  not  be  rcMiiovccl  to  allow  this  defence  ex- 
cept upon  sjiecial  terms. ^ 

Whether  the  defence  of  usury  is  a  personal  privilege  of  the 
debtor,  or  may  be  taken  advanta<::e  of  by  others,  is  a  question 
upon  which  the  courts  are  divided  in  opinion.  On  the  one  hand, 
it  is  allinniMl  that  any  person  who  has  become  interested  in  the 
projHM-ty  subject  to  the  mortgage,  unless  he  has  bought  expressly 
subject  to  the  mortgage,  or  has  assumed  the  payment  of  it,  may 
use  this  defence.2  Thus  a  second  or  other  subsequent  mortgagee 
may  take  this  defence.^ 

A  judgment  creditor  of  the  mortgagor  may  avail  himself  of  the 
defence  of  usury  to  the  extent  of  his  legal  lien.*  Creditors  for 
whose  benefit  land  has  been  conveyed  in  trust  may  set  up  this  de- 
fence, though  the  trustees  have  neglected  to  do  so.^  Although 
a  judgment  for  the  full  amount  of  the  note  and  an  order  for  sale 
have  already  been  entered,  subsequent  incumbrancers  may  before 
final  distribution,  by  answer  or  cross-petition,  set  up  the  defence 
of  usury,  and  have  the  proceeds,  to  the  amount  of  the  usurious 
interest,  applied  to  the  payment  of  their  liens.*^ 

On  the  other  hand,  the  weight  of  authority  at  the  present  time 
favors  the  rule,  that  when  the  debtor  is  himself  willing  to  abide 
by  the  terms  of  his  contract  no  one  else  can  interfere  and  set  up 
the  defence  of  usury."     The  fact  that  a  usury  law  does  not  make 


1  Bard  1-.  Fort,  3  Barb.  Ch.  632.  Indiana:   Studabaker  v.    Marquarett,   55 

2  As  in  New  York:  Post  v.  Dart,  8  Intl.  341.  Iowa:  Carmichael  v.  Bodfish, 
Paige,  640;  Hiouks  v.  Avery,  4  N.  Y.  32  Iowa,  418;  Huston  v.  Strinj,^liam,  21 
225.  Ohio:  I'liion  Hank  v.  Bell,  14  Ohio  Iowa,  36;  Powell  v.  Hunt,  11  Iowa,  430. 
St.  200.  Mississippi:  M'Alister  v.  Jer-  Kansas:  Pritcliett  v.  Mitcliell,  17  Kans. 
man,  32  Miss.  142.  Maryland:  Ranks  v.  35:"),  where  the  cases  are  reviewed  and  col- 
McClellan,  24  Md.  62.  New  Hampshire :  lected.  Kentucky:  CampbelU-.. Johnston, 
Gunnison  v.  Grejrg,  20  N.  H.  100.  New  4  Dana,  179.  Michigan:  Farmers'  &  Me- 
Jersey :  Cummins  v.  Wire,  6  N.  J.  Eq.  chanics'  Bank  v.  Kinnnel,  1  Mich.  84. 
73.  Missouri :  Ransom  v.  Hays,  39  Mo.  445. 

3  Green  v.  Tyler,  39  Pa.  St.  361.  Pennsylvania:  Miners'  Trust  Bank  v. 
*  Post  V.  Dart,  8  Paige  (N.  Y.),  639.  Roseberry,  81  Pa.  St.  309.  Under  an  ear- 
5  Union  Bank  at  Massillon  v.  Bell,  14  Her  statute  in  this  state  which  made  void  a 

Ohio  St.  200.  usurious  contract,  it  was  held  that  a  sec- 

c  Brooke  i;.  Morris,  2  Gin.  (Ohio)  528.  ond  mortgagee  or  other  person  interested 

'  Alabama:    Fielder  v.  Varner,  45  Ala.  in  the  equity  could  set   up   this   defence. 

429;  Cain  v.  Gimon,  36  Ala.  168.     Con-  Greene   v.   Tyler,  39  Pa.  St.  361  ;    Bach- 

necticut:  Loomia  v.  Eaton,  32  Conn.  550.  dell's  Appeal,  56  Pa.  St.  386.     Vermont: 

Illinois :  Adams  v.  Robertson,  37  111.  45.  Aubtin  v.  Chittenden,  33  Vt.  553. 

438 


THE  ANSWER  AND  DEFENCE.     [§§  1494,  1495. 

void  usurious  contracts  has  been  held  to  be  decisive  in  favor  of 
this  view.^ 

1494.  Usury  cannot  be  set  up  as  a  defence  by  one  who  has 
pvirchased  land  subject  to  a  mortgage,  the  amount  of  which  is 
made  part  of  the  consideration  of  the  purchase,  whether  he  has 
assumed  the  payment  of  it  or  not.'-^  When  the  purchaser  sets  up 
this  defence  the  complainant  caimot  overcome  it  by  proof  that  the 
lands  were  conveyed  to  him  subject  to  the  mortgage,  unless  his 
pleading  set  forth  the  execution  and  terms  of  the  conveyance.^ 
But  a  purchaser  who  has  bought  not  merely  the  equity  of  redemp- 
tion, but  the  whole  title,  paying  the  full  price,  with  no  deduction 
on  account  of  the  mortgage,  may  set  up  usury.* 

A  mortgagor  who  has  conveyed  the  property  subject  to  a  mort- 
gage which  is  usurious,  and  has  afterwards  taken  a  reconveyance 
in  which  nothing  is  said  about  the  mortgage,  is  entitled  to  set 
up  the  defence  of  usury.^  It  was  suggested  that  if  there  had 
been  a  personal  liability  on  the  part  of  the  intermediate  purchaser 
to  pay  the  mortgage  debt,  it  might  not  be  in  his  power  to  release 
that  liability  by  such  a  reconveyance  without  the  consent  of  the 
mortgagee. 

1495.  Accordingly  a  mortgagor  may  be  estopped  from  set- 
ting up  the  defence  of  usury.  If  a  mortgage  should  be  made  for 
the  purpose  of  being  sold  at  a  discount  to  some  third  person,  and 
subsequently  assigned  at  a  considerable  discount  under  a  promise 
of  the  mortgagor  that  he  would  make  an  affidavit  to  the  effect 
that  the  consideration  of  the   mortgage  was   the  full  amount  ex* 

1  Miners'  Trust  Bank  v.  Roseberry,  81  J.;  Perry  i'.  Kcarns,  13  Iowa,  174;  Greither 
Pa.  St.  .3(19.  I'.  Alexander,   1.5   Iowa,   470;   Huston  v. 

2  §§633,  644,745:  Keed  v.  Eastman,  Stringham,  21  lb.  36 ;  Sellers  y.  Botsford, 
.50  Vt.  f.7  ;  Hartley  f.  Harrison,  24  N.  Y.  11  Mich.  59  ;  Cramer  v.  Lepper,  26  Ohio 
170;  Morris  v.  Floyd,  5  Barb.  (N.  Y.)  St.  59;  S.  G.  20  Am.  R.  756;  Hough  v. 
130;  Sands  1-.  Church,  6  N.  Y.  347 ;  Ma-  Horsey,  36  Md.  181;  S.  C.  11  Am.  R. 
son  V.  I>ord,  40  N.  Y.  476  ;  Post  v.  Dart,  484;  Conover  i;.  Ilohart,  24  N.  .7.  Eq.  120. 
8  Paige  (N.  Y.),  639;  Hardin  i-.  Flyde,  40  When  grantee's  title  is  in  hostility  to  the 
Barb.  (N.  Y.)  435;  Freeman  v.  Auld,  44  mortgage,  see  Chamberlain  v.  Dempsey, 
N.  Y.  .50;    Merchants'  Ex.  Nat.  Bank  v.  9  Bos.  (N.  Y.)  212. 

Commercial  Warehouse  Co.  49  X.  Y.  635,  »  Hetfield  v.  Newton,  3  Sandf.  (N.  Y.) 

643,    note;     Dc    Wolf    v.    Johnson,    10  Ch.  564. 

Wheat.  367;  Thomas  r.  Mitchell,  27  Wis.  *  Lilienthal  v.  Chamjiion,  58  Ga.  158; 

414  ;    Stein  v.  Indianapolis,  &c.  Ass'n,  18  Mahcr  v.  Lanfrom,  86  111.  513. 

Ind.  237;    Butler   v.    Myer,   17   Ind.  77;  *  Knickerbocker  Life  Ins.  Co.  f».  Nel.son, 

Wright  >,'.  Bundy,  11   Ind.  398;    Price  v.  13  Hun  (N.  Y.),  .321. 

Pollock,  47  Ind.   362,   366,  per  Downey, 

439 


§§  1400,  1407.]   FORECLOSURE  RY  EQUITABLE  SUIT. 

pressed  in  it,  niul  (hut  llicro  was  no  (lofonce  or  set-off,  he  would 
be  precliultHl  Uoiu  eontnulioting  liis  airulavit,  if  he  obtained  the 
money  upon  the  strength  of  it.^  And  so  if  a  mortgagor  upon  the 
assignment  of  a  mortgage  by  the  mortgagee  signs  a  certificate 
stating  that  the  whole  principal  sum  and  interest  thereon  is  due 
without  any  offset  or  legal  or  equitable  defence,  the  mortgagor 
is  estopped  from  setting  up  usury.^  But  where  part  of  the 
money  is  paid  before  the  giving  of  the  affidavit,  the  creditor  does 
not,  in  paying  it,  act  upon  the  statements  contained  in  the  affi- 
davit, and  therefore  the  mortgagor  is  not  estopped  from  assert- 
ing the  usurious  nature  of  the  transaction  so  far  as  the  amount 
then  paid  is  concerned.  That  the  creditor  believes  that  an  es- 
toppel will  be  made  in  the  future  avails  nothing.^ 

1496.  Set-off.  —  Upon  a  bill  to  foreclose,  the  mortgagor  is  al- 
lowed to  set  off  a  debt  due  to  him  from  the  complainant,  not  only 
in  cases  where  this  would  be  allowed  in  actions  at  law,*  but  also 
in  cases  of  peculiar  equity  not  strictly  within  the  rules  of  law  ;  as, 
for  instance,  in  an  action  against  a  mortgagor  and  his  surety  on  a 
bond  secured  by  the  mortgage,  a  debt  due  the  mortgagor  from  the 
plaintiff'  may  be  allowed  in  set-off.  The  joint  bond  in  such  case 
is  nothing  more  than  a  security  for  the  separate  debt  of  the  mort- 
gagor. The  mortgage  is  executed  by  him  alone,  and  is  a  lien 
upon  his  land,  and  his  interests  alone  are  affected  by  the  fore- 
closure. That  a  joint  judgment  might  be  rendered  on  the  bond 
for  any  deficiency  does  not  exclude  the  allowance  of  the  counter 
claim.^  The  defendant  cannot  make  a  counter  claim  and  demand 
judgment  upon  it,  unless  he  is  personally  liable  to  the  plaintiff,  or 
claims  an  interest  in  the  mortgaged  premises.  His  counter  claim 
must  in  some  way  go  to  qualify  or  defeat  the  plaintiff's  demand.'' 

1497.  If  the  suit  to  foreclose  be  brought  in  the  name  of  a 

1  Real   Estate   Trust  Co.  v.  Rader,  53         In  earlier  cases  it  was  held  that  the  de- 
How.  (N.  Y.)  Pr.  231.  fendaut  could  not  set  off  a  demand,  but 

2  Smyth  I'.  Lombardo,  15  Ilun  (N.  Y.),     must   resort    to  a    cross-bill.      Troup    v. 
415.  Haight,  Hopk.  (N.  Y.)  Ch.  239. 

8  Payne  v.  Burnham,  62  N.  Y.  69.  ''  Ex  parte  Hanson,  12  Ves.  346  ;  Bath- 

*  Nat.  F.  Ins.  Co.  i;.  McKay,  21  N.  Y.  gate  v.  Haskin,  59  N.  Y.  533;  Holbrook  v. 

191,  196;  Irving  i-.  I)e  Kay,  10  Paige  (N.  Receivers,  &c.  6  Paige  (N.  Y.),  220. 

Y.),  319  ;  Chapman  i;.  Robertson,  6  Paige  ^  Lathrop  v.  Godfrey,  3  Hun  (N.  Y.), 

(N.  Y.),  627;  Holden  U.Gilbert,  7  Paige  739;  6  Thomp.  &  C.  96  ;  Nat.  Fire  Ins.  Co. 

(N.  Y.),  208  ;  Hunti;.  Chapman,  51  N.  Y.  v.  McKay,  supra. 
555;  Hess  v.  Final,  32  Mich.  515;  Lock- 
wood  V.  Beckwith,  6  Mich.  168. 
440 


THE  ANSWER  AND  DEFENCE.     [§§  1498,  1499. 

person  other  than  the  real  owner  of  tlie  mortgage  note,  the 
defendant  ma}'  have  the  benefit  of  any  defence  or  set-off  he  has 
against  the  real  owner.  No  other  defence  can  be  set  up- on  the 
ground  that  the  holder  of  the  mortgage  security  is  prosecuting  the 
foreclosure  for  the  benefit  of  another  person. ^ 

1498.  To  entitle  the  defendant  to  set  off  against  the  mort- 
gage debt  any  payment  made  by  him,  it  must  be  shown  that  it 
was  made  in  direct  payment  of  part  of  the  debt,  or  that  it  was 
agreed  that  this  sum  should  be  received  and  credited  on  account 
of  the  mortgage ;  ^  because  if  there  was  no  actual  appropriation 
by  the  debtor  at  or  before  the  time  of  payment,  the  creditor  may 
apply  the  payment  to  any  other  claim  he  has  at  his  discretion.^ 
An  independent  claim  of  the  mortgagor  cannot  be  set  of?.^  More- 
over, to  entitle  the  defendant  to  set  off  a  debt,  it  must  have  been 
due  to  him  from  the  plaintiff  at  the  time  the  foreclosure  suit  was 
commenced.^  Genei'ally  a  claim  for  unliquidated  damages  cannot 
be  set  off  when  the  defendant  has  an  adequate  remedy  at  law  ; 
but  under  the  codes  of  practice  in  some  states  such  a  claim  may  be 
allowed." 

A  mortgage  to  secure  future  advances  is  valid  only  to  the 
amount  of  the  advances  actually  made ;  but  the  mortgagee's 
failure  to  complete  the  contemplated  advances  affords  ground  for 
only  nominal  damages  by  way  of  set-off  ;  "^  unless,  perhaps,  there 
was  an  express  obligation  to  make  them.  Under  a  covenant  by 
the  mortgagee  to  make  partial  releases,  damages  sustained  by  his 
refusal  to  release  may  be  a  matter  of  equitable  offset  to  his  claim 
upon  the  mortgage.^ 

1499.  Illegal  interest  previously  paid  upon  the  mortgage  or 
included  in  it  may  b<;  offset,'-^  as  also  may  be  a  payment  of  a  bonus 
in  addition  to  the  lawful  interest  paid  to  procure  an  extension  of 
time  within  which  to  pay  the  debt.^*^ 

1  Sjiear  v.  Hailden,  31  Mich.  2G5  ;  La-  Thompson  v.  Ellsworth,  1  Barb.  (N.  Y.) 
throp  V.   Godfrey,   .'5  Hun   (N.  Y.),  739;     Ch.  024. 

Chase  v.  Brown,  32  Mich.  225.  <>  Hattier  v.  Etinaud,  2  Dcsau.  (S.  C.) 

2  Dudley   V.   Bergen,  23  N.  J.  Eq.  397;     570. 

Dolman  v.  Cook,  14  N.  J.  Kq.  56  ;  Cona-  ^  Dart  v.  McAdam,  27  Bnrh.  (N.  Y.)  187. 

way  I'.  Carpenter,  58  Ind.  477.  ^  Warner  v.  Gouverneur,  1  Burl).  (N.  Y.) 

«  Bird  V.  Davis.  14  N.  J.  Eq.  4C7.  30. 

*  White   V.    Williams,  3  N.  J.  Eq.  (2  »  §648;  Pond  i;.  Causdell,  23  N.  J.  Eq. 

Green)  376.  181  ;  llarhi.son  u.  Houghton,  41  111.522; 

»  Uolden   V.   Gilbert,  7   I'aige  (N.  Y.),  Ward  v.  Sharp,  15  Vt.  115. 

208;    Knapp    v.    Buruham,    II   lb.  330;  i'  Ileal  Est.  Trust  Co.  v.  Kecch,  7  Hun 

441 


§§  1500,  1501,]       FORKCLOSURF,    HY    FQnTAnLK   SUIT. 

1500.  It  is  no  defence  to  a  foreclosure  suit  on  a  purchase 
money  mortgage  that  there  is  an  outstanding  title  or  incum- 
brance. The  mortgagor  is  left  to  his  remedy  on  the  covenant. 
If,  however,  the  mortgagor  has  been  evicted,  or,  according  to  some 
autliorities,  if  an  ejectment  suit  has  been  commenced  against  him 
on  such  outstanding  title,  the  court  will  interfere.^  In  the  latter 
case  proceedings  upon  the  mortgage,  even  if  it  be  a  power  of 
sale  mortgage  not  requiring  a  suit,  will  be  enjoined  until  the  ac- 
tion of  ejectment  is  determined.^  Although  there  is  an  objection 
to  undertaking  a  settlement  of  unliquidated  damages  in  a  court 
of  equity,  yet  this  may  be  done  either  by  directing  an  issue,  or 
by  a  I'eference  to  a  master  to  ascertain  the  damages,  before  en- 
tering a  decree  upon  the  mortgage  ;  or  the  court  may  avoid  this 
objection  by  staying  the  foreclosure  suit  until  the  damages  aris- 
ing from  the  failure  of  title  are  ascertained  in  a  suit  at  law.^ 

The  same  rule  applies  to  a  bill  to  enforce  a  lien  for  purchase 
money.  "  The  rule,"  says  Mr.  Justice  Swayne  of  the  Supreme 
Court,*  "  is  founded  in  reason  and  justice.  A  different  result 
would  subvert  the  contract  of  the  parties  and  substitute  for  it  one 
which  the}'  did  not  make.  In  such  cases  the  vendor  by  his  cove- 
nants, if  there  be  such,  agrees  upon  them,  and  not  otherwise,  to 
be  responsible  for  defects  of  title.  If  there  are  no  covenants,  he 
assumes  no  responsibility  and  the  other  party  takes  the  risk.  The 
vendee  agrees  to  pay  according  to  his  contract,  and  secures  pay- 
ment by  giving  a  lien  upon  the  property.  Here  it  is  neither  ex- 
pressed nor  implied  that  he  may  refuse  to  pay  and  remain  in 
possession  of  the  premises  —  nor  that  the  vendor  shall  be  liable 
otherwise  than  according  to  his  contract." 

1501.  This  defence  is  founded  on  the  covenants.  An  an- 
swer to  a  suit  to  foreclose  a  mortgage  given  for  the  purchase 
money,  which  alleges  a  failure  of   title,  must,  in   the  absence  of 

(N.  Y.),  253;  McGregor  i.  Mueller,  1  Cln.  was  questioned  in  Church  v.  Fisher,  40 

(Ohio)  486.  Ind.  145. 

1  Price  V.  Lawton,  27  N.  .J.  Eq.  325  ;  2  Johnson  v.  Gere,  2  Johns.  (N.  Y.)  Ch. 

Glenn   v.    Whi].ple,  1  Beasley  (N.  J.),  50;  546;  Edwards  v.  Bodine,  26  Wend.   (N. 

Van  Waggoner  f.  McEwen,  1  Green's  Ch.  Y.)  109.     See,  however,  to  the  contrary, 

(N.J.)  412;  Shannon  I'.  Marselis,  Saxton  Peat  v.  Gilchrist,  3  Sandf.  (N.  Y.)  Sup. 

(N.  J.),  413  ;  Withers  v.  Morrell,  3  Edw.  Ct.  118,  and  cases  cited. 

Ch.  560;   Taylor  i;.  Whitmore,  35  Mich.  »  Coster  u.  Monroe  Manuf.  Co.  I  Green's 

97.     Whether  there  can  be  any  defence  Ch.  (N.  J.)  467  ;  Couse  v.  Boyles,  3  lb.  212. 

by  way  of   recoupment,    before  eviction,  *  Peters  v.  Bowman  (Oct.  T.  1878),  11 


442 


Chicago  L.  N.  118  ;  7  Wash.  L.  R.  156. 


THE   ANSWER   AND   DEFENCE. 


[§  1502. 


any  allegation  of  fraud,  either  set  out  the  deed  or  the  covenants 
contained  in  it ;  ^  because  the  defence  is  founded  on  the  cove- 
nants of  warranty  or  seisin.  Therefore,  where  the  deed  contains 
no  such  covenants,  as  in  the  case  of  a  deed  made  by  executors, 
containing  no  covenants  except  against  the  acts  of  themselves 
and  their  testator,  it  is  no  defence  that  a  portion  of  the  property 
was  covered  by  an  incumbrance  not  specified  in  the  covenant.^ 
The  existence  of  a  lease  upon  part  of  the  premises  is  no  defence 
to  a  suit  to  foreclose  the  purchaser's  mortgage,  if  it  is  no  breach 
of  any  of  the  covenants  of  his  deed,  and  his  grantor  did  not  fraud- 
ulently mislead  him.^ 

1502.  If  the  mortgagor  is  in  undisturbed  possession,  and 
no  suit  is  pending  for  the  possession  of  the  property  by  an  ad- 
verse claimant,  the  courts  will  not  generally  interfere  to  restrain 
the  vendor  from  foreclosing  a  mortgage  given  for  the  price  of  land 
conveyed  with  full  covenants  of  warranty,  on  account  of  any  al- 
leged defects  in  the  title  not  amounting  to  a  total  failure  of  con- 
sideration.* Before  this  defence  will  avail,  there  must  be  either 
an  eviction  or  something  tantamount  to  it.^ 

(1  Beas.)  50 ;  Miller  v.  Gregory,  16  N.  J. 
Eq.  274  ;  Key  v.  Jennings,  66  Mo.  356, 
368  ;  Smith  i;.  Fiting,  37  Mich.  148  ;  Pat- 
ten V.  Taylor,  7  How.  132,  159.  Mr.  Jus- 
tice Nelson,  in  the  latter  case,  referring 
to  several  authorities  there  cited,  said: 
"  These  cases  will  show  that  a  purchaser, 
in  the  undisturbed  possession  of  the  land, 
will  not  be  relieved  against  the  payment  of 
the  purchase  money  on  the  mere  ground 
of  defect  of  title,  there  being  no  fraud  or 
misrepresentation  ;  and  that,  in  such  a 
case,  he  must  seek  his  remedy  at  law  on 
the  covenants  in  his  deed.  That  if  there 
is  no  fraud,  and  no  covenants  to  secure  the 
title,  he  is  without  remedy;  as  the  vendor, 
selling  in  good  faith,  is  not  responsil)le  for 
the  goodness  of  his  title,  beyond  the  ex- 
tent of  his  covenants  in  the  deed."  This 
doctrine  is  affirmed  in  Noonan  v.  Lee,  2 
Black,  499,  508  ;  Peters  v.  Bowman  (Su- 


i  Church  V.  Fisher,  40  Ind.  145  ;  and 
see  Davis  v.  Bean,  114  Mass.  358,  360. 

2  Niics  V.  Harmon,  80  111.  396  ;  Sand- 
ford  I'.  Travers,  40  N.  Y.  140. 

8  Sandford  v.  Travers,  7  Bosw.  (N.  Y.) 
498. 

<  Leggett  V.  McCarty,  3  Edw.  Ch.  (N. 
Y.)  124;  Withers  v.  Morrell,  lb.  560; 
Edwards  v.  Bodine,  26  Weud.  (N.  Y.)  109  ; 
Tallmadge  v.  Wallis,  25  lb.  107;  Davison 
V.  De  Freest,  3  Sandf.  (N.  Y.)  Ch.  456  ; 
Banks  v.  Walker,  3  Barb.  (N.  Y.)  Ch. 
438  ;  York  v.  Allen,  30  N.  Y.  104  ;  Curtiss 
V.  Bush,  39  Barb.  (N.  Y.)  661  ;  Sandford 
V.  Travers,  7  Bosw.  (N.  Y.)  49S  ;  Biimpus 
V.  Platner,  1  Johns.  (N.  Y.)  Ch.  218;  Ab- 
bott V.  Allen,  2  lb.  519  ;  Chesterman  v. 
Gardner,  5  lb.  29  ;  Denston  v.  Morris,  2 
Edw.  (N.  Y.)  37  ;  Burke  v.  Nichols,  21 
How.  (N.  Y.)  Pr.  459;  34  Barb.  430;  2 
Kcyes,  670  ;  Miller  v.  Avery,  2  Barb.  (N. 
Y.)  Ch.  582;  Parkinson  v.  Jacobson,  13     prcmc  Ct.  of  U.  S),  11  Chicago  L.  N.  118  ; 


Hun  (N.  Y.),  317  ;  Hile  v.  DaviHon,20  N. 
J.  Eq.  228;  Hulfish  v.  O'Brien,  lb.  2.30; 
Shannon  v.  Marselis,  Saxt.  (N.  J.)  426  ; 
Van  Waggoner  v.  M'Ewcn,  1  Green  (N. 
J.)  Eq.  412  ;  Glenn  v.  Whipple,  12  N.  J.  Eq. 


and  is  sustained  also  in  Hill  v.  Butler,  6 
Ohio  St.  207,  where  numerous  cases  arc 
cited.     See  §  1366  near  end. 

6  Plat   V.   Gilchrist,   3    Sandf.  (N.  Y.) 

448 


§  1500.]        FORKCLOSURE  HY  EQIHTARLE  SUIT. 

Tt  is  iKit  always  nooosaary  tliat  tho  purcliaser  should  sliow  that 
ho  has  been  dispossessed  to  establish  eviction  ;  it  may  be  estab- 
lished by  proof  that  at  the  time  of  his  purchase  the  lands  were  in 
the  actual  possession  of  one  claiming  under  a  title  hostile  to  his 
vendor,  by  reason  of  which  he  had  not  and  could  not  obtain  pos- 
session.^ Neither  is  it  necessary  that  he  should  resist  the  claim 
under  the  paramount  title,  or  even  await  eviction  by  legal  process. 
He  may  voluntarily  surrender  possession  ;  but  then  must  stand 
ready  to  show  that  the  title  to  which-  he  surrendered  was  para- 
mount, and  was  covered  by  his  grantor's  covenants  of  warranty.'^ 
If  a  judgment  for  the  possession  of  the  property  be  recovered 
against  him,  his  delivery  of  possession,  without  awaiting  expulsion 
by  legal  process,  is  an  eviction.^  The  mortgagor  may  safely  pay 
the  adverse  claimant  with  the  consent  of  his  mortgagee  that  the 
amount  may  be  applied  in  reduction  of  the  mortgage  debt,  if  he 
obtain  sufficient  evidence  of  such  consent.* 

The  defence  of  eviction  cannot  be  set  up  by  one  who  has  merely 
purchased  the  equity  of  redemption  subject  to  the  mortgage,  with- 
out assuming  any  personal  liability  for  it,  or  against  whom  no 
personal  claim  is  made,  merely  upon  the  ground  that  he  is  the  as- 
signee of  the  plaintiff's  covenants.^  Eviction  is  no  defence  when 
no  right  or  title  to  the  part  of  the  land  from  which  the  mortgagor 
is  evicted  was  convej'ed  to  him  ;  as  where  a  building  and  fence, 
not  specified  in  the  deed,  encroached  on  an  adjoining  lot.^ 

1503.  Cases  exceptional  to  general  rule.  —  The  rule  gen- 
erally is  that  above  stated,  that  the  entire  want  of  title  in  the 
vend(jr,  or  the  partial  failure  of  it,  is  no  defence  to  the  action,  un- 
less fraud  be  shown  or  the  mortgagor  has  been  evicted.'^     Yet  it 

Sup.  Ct.  118.    In  this  case  the  earlier  cases     (3  Green)   141;  Brou   v.   Becnel,  20  La. 
are  reviewed  at  length.  Ann.  2.54  ;  and  see  Sandford  v.  Travers, 

1  Withers  v.  Codwise,  2  Sandf.  (N.  Y.)     40  N.  Y.  140. 

Ch.  350.  0  Burke  v.  Nichols,  1  Abb.  (N.  Y.)  App. 

2  York  V.  Allen,  30  N.  Y.  104  ;  Cowdrey     Dec.  260  ;  2  Keyes,  670. 

V.  Coit,  44   N.    Y.   382,   392,    per   Gray,  '  Booth  v.  Ryan,  31  Wis.  45  ;  Robards 

Com'r;  Simers  v.  Saltus,  3   Den.  (N.  Y.)  v.  Cooper,  16  Ark.  288;  Cromwell  v.  Clif- 

214.  ford,  45  Ind.  392 ;  Rogers  v.  Place,  29  Ind. 

8  Dyettw.  Pendleton,  8  Cow.  (N.  Y.)  727.  577;  Jordan  v.  Blackmore,  20  Ind.  419; 

*  Hart  V.  Carpenter,  36  Mich.  402.  Buell  v.  Tate,  7  Blackf.  55;  Hume  v. 
After  the  death  of  the  mortgagee  there  Dessar,  29  Ind.  112  ;  Hubbard  v.  Chappel, 
may  be  difficulty  in  proving  his  oral  ad-  14  Ind.  601  ;  Hanna  v.  Shields,  34  Ind. 
missions.  84  ;  Plowman   v.    Shidler,   36  Ind.   484 ; 

*  Nat.  Fire  Ins,  Co.  v.  McKay,  21  N.  Y.  Conklin  v.  Bowman,  7  Ind.  533  ;  Church 
191  ;  Van  Houten  v.  McCarty,  4  N.  J.  Eq.  v.  Fisher,  40  Ind.  145. 

444 


THE   ANSWER   AND   DEFENCE,  [§  1504. 

has  been  held  in  some  cases  that  the  mortgagor  may  defend  b}^  a 
recoupment  or  oJEEset  of  damages  for  a  breach  of  the  covenants  in 
the  deed  to  him,  to  the  extent  of  the  damages  sustained,  whether 
the  failure  of  title  be  complete  or  partial.^  A  breach  of  covenant 
in  the  vendor's  deed  is  a  defence,  where  it  is  shown  that  the  ven- 
dor is  unable  to  respond  to  the  damages  occasioned  by  the  breach.^ 
When  a  remedy  upon  the  covenants  would  be  ineffectual,  as,  for 
instance,  when  the  mortgagee  is  insolvent,  the  defendant  in  a  suit 
upon  the  note  or  mortgage  may  set  up  the  damages  on  the  cove- 
nants.^ 

1604.  But  when  the  covenant  is  broken  at  the  time  the 
suit  is-  brought  to  recover  the  purchase  money  and  the  amount 
claimed  under  it  is  certain,  the  purchaser  is  entitled  to  detain  the 
purchase  money  to  the  extent  to  which  he  would  at  that  time  be 
entitled  to  recover  damages  upon  the  covenant,  in  order  to  avoid 
circuity  of  action.  It  is  therefore  held  that  a  breach  of  the  cove- 
nant of  seisin  in  the  vendor's  deed  may  be  set  up  as  a  defence  to 
an  action  for  the  foreclosure  of  a  mortgage  given  for  the  purchase 
money,  although  a  breach  of  the  covenant  of  warranty  may  not.* 
A  total  failure  of  title  is  a  total  failure  of  consideration.  The  ob- 
ligation of  the  mortgagor  is  not  made  for  a  covenant  of  the  mort- 
gagee, but  for  the  land ;  and  if  the  land  fails  to  pass,  the  promise 
of  the  mortgagor  is  a  mere  nudum  pactum.  The  damages  in  an 
action  on  the  covenant  would  be  the  same  as  the  consideration  for 
the  promise;  and  it  is  just  that  the  mortgagor  should  be  allowed 
to  show  a  total  failure  of  consideration  instead  of  being  compelled 
to  seek  his  remedy  on  the  covenants.^ 

A  covenant  against  incumbrances  is  broken  at  the  time  of  the 

*  Coy  V.  Downie,  14  Fla.  544  ;  Lowry  In  such  case,  a  failure  of  title  to  the  land 
V.  Hurd,  7  Minn.  356  ;  Walker  v.  Wilson,  mifjfht  be  interposed  in  an  action  on  the 
13  Wis.  522;  Hall  v.  Gale,  14  Wis.  54;  niortga},'e.  Rice  v.  Goddard,  14  Pick. 
Mendenliall  v.  Steckel,  47  Md.  453.  293  ;  Tallmadge  v.  Wallia,  25  Wend.  107. 

2  McLcmore  v.  Mahson,  20  Ala.  137.  So    mif,'ht  he  have  reserved  a  j)ortion  of 

8  Knapp  y.  Lee,  3  Pick.  (Mass.)  452.  the   purchase   money,   by   .at;reenient,    to 

*  Latham  v.  McCann,  2  Neb.  276.  The  await  the  clearing  up  of  any  suspicion 
court  say  :  "  Tlie  parties  in  this  case,  as  in  on  the  title ;  but  he  chose,  for  some  reason, 
every  other  case,  must  be  bound  by  the  to  accept  u  deed  with  covenants  of  war- 
bargain  they  have  chosen  to  enter  into,  ranty.  He  cannot  now  come  forward  and 
The  grantee  might  have  demanded  a  cov-  aay  he  will  j)ay  liis  note  and  mortgage 
enant  of  seisin,  —  the  assurance  that  the  upon  certain  alleged  defects  being  rcm- 
grantor  had  at  the  time  of  making   his  edied." 

deed  the  very  estate,  both  as  to  rjuantity         '  Rice  v.  Goddard,  14  Pick.  (Mass.)  293. 
and  quality,  that  he  professed  to  convey. 

445 


§  loOo.]  FORKCLOSrHK    I'.Y    KQUITAHLK    SUIT. 

C(tn\H'y;iiU'i>  if  a  third  [tcrsoii  tlu'ii  luul  an  interest  in  the  hmd 
granted  whieh  diminished  tht^  value  of  tlio  absolute  interest  in  the 
same,  while  at  the  same  time  the  fee  })assed  hy  the  deed.  If  an 
incumbrance  upon  land  conveyed  to  the  grantee  by  deed  contain- 
ing such  a  covenant,  be  fixed  and  capable  of  deduction  out  of  the 
grantee's  purchase  money  mortgage,  a  suit  upon  such  mortgage 
may  be  allowed  to  proceed  to  judgment,  when  the  amount  of  the 
incumbrance  may  be  offset  against  the  amount  of  the  mortgage  ; 
and  if  a  sale  be  had  the  proceeds  will  be  applied  in  the  first  place 
to  discharge  the  incumbrance,  and  the  amount  so  applied  deducted 
from  the  mortgage  debt.^  The  possession  of  a  third  person,  with- 
out right  and  without  the  consent  of  the  grantor,  does  not  con- 
stitute an  incumbrance,  or  a  breach  of  a  covenant  in  the  grantor's 
deed  against  incumbrances  ;  consequently  the  purchaser  who  has 
given  a  mortgage  for  a  portion  of  the  purchase  money  cannot 
charge  the  mortgagee  Avith  rent  or  for  damages  equal  to  rent,  for 
the  period  during  which  such  third  person  has  held  possession.^ 
Thus  it  is  held  that  if  there  be  a  breach  of  the  covenant  against 
incumbrances  by  reason  of  the  existence  of  tax  liens,  the  amount 
of  these  would  be  a  proper  offset  to  the  amount  due  on  the  mort- 
gage.^ But  if  for  any  reason  a  decree  cannot  be  made  for  the 
mortgagee  directing  a  deduction  of  the  amount  due  on  the  prior 
incumbrances  against  which  the  mortgagor  is  protected  by  the 
covenant,  as,  for  instance,  when  such  incumbrances  exceed  the 
amount  of  the  mortgage,  the  foreclosure  suit  upon  the  latter  will 
be  stayed  until  the  property  has  been  released  from  such  incum- 
brances.'* A  provision  in  the  purchase  money  mortgage  for  a  re- 
lease from  a  prior  mortgage  on  the  mortgagor's  paying  certain 
sums  does  not  form  an  exception  to  the  rule,  that  the  grantor  who 
has  conveyed  by  deed  having  the  usual  covenants,  including  a  cov- 
enant against  incumbrances,  must  procure  a  release  from  such 
prior  mortgage  before  he  is  entitled  to  a  decree  of  foreclosure  on 
the  purchase  money  mortgage.^ 

1505.     The  breach   by  the  mortgagee  of   an  independent 
covenant  is  no  defence  to  the  foreclosure  of  a  mortgage  which 

1  §  1698,  last  clause;  and  see  Smith  v.     22  N.  J.  Eq.  76 ;  Van  Riper  v.  Williams, 
Fiting,  37  Mich.  148, 151,  per  Marston,  J. ;     1  Green  (N.  J.)  Ch.  407. 

Coffman  v.  Scoville,  86  111.  300.  *  Dayton  v.  Dusenbury,  25  N.  J.  Eq. 

2  Dinsinore  v.  Savage,  68  Me.  191.  110. 

'  Union  Nat.  Bank  of  Kahway  v.  Pin-         ^  Stiger  v.  Bacon,  29  N.  J.  Eq.  442. 
ner,  25  N.  J.  Eq.  495  ;  White  v.   Stretch, 

446 


THE   ANSWER   AND   DEFENCE.  [§  1506. 

by  its  terms  has  become  due  and  payable.  Where,  for  instance, 
a  mortgage  is  given  in  part  payment  of  the  purchase  money  of  the 
premises,  and  at  the  same  time  the  mortgagee  executes  a  covenant 
to  the  purchaser  that  he  will  immediately  procure  releases  of  their 
title  from  certain  persons  named,  who  are  reputed  to  have  some 
claim  upon  the  lands,  the  covenant  is  not  dependent  upon  the 
payment  of  the  mortgage  money,  and  does  not  constitute  with  the 
mortgage  a  condition  that  the  mortgage  shall  be  paid  when  the 
releases  shall  be  procured. ^ 

1506.  But  if  the  sale  was  effected  by  the  vendor's  fraud,  as 
by  fraudulently  procuring  and  exhibiting  as  true  a  false  abstract 
of  title,  the  purchaser  may  have  the  mortgage  and  the  conveyance 
rescinded.2  Fraud  is  a  defence  only  when  it  was  practised  upon 
the  defendant  by  the  mortgagee  or  his  agents,  or  with  his  knowl- 
edge.2  The  mortgagor  may  also  set  up  a  counter  claim  for  dam- 
ages occasioned  by  the  fraud  practised  by  the  mortgagee  in  the 
sale  of  the  premises  to  the  mortgagor ;  *  and  if  such  damages  ex- 
ceed or  equal  the  amount  of  the  mortgage,  the  claim  under  the 
mortgage  will  be  wholly  defeated.^ 

A  mere  mistake  of  both  parties  as  to  the  number  of  acres  of 
laud  conveyed  is  no  ground  for  defence  to  a  mortgage  given  for 
the  purchase  money,  there  being  no  fraud  or  misrepresentation  by 
the  grantor.6  But  it  would  seem  that  a  misrepresentation  by  the 
grantor,  though  made  under  a  mistake  as  to  his  own  rights,  but 

1  Coursen  v.  Canfield,  21  N.  J.  Eq.  92.  al,  because  it  will   give  better  protection 

"  The  inort{,'agcc,"   said  the  Chancellor,  to   a  party,  or  will   diminish  litigation." 

"  has  a  right  to  say  in  hiecfmlera  non  veiii.  And  see  Duryee  v.  Linsheimer,  27  N.  J. 

He  might  have  been  willing  to  bind  him-  Eq.  366. 

self   in    a  covenant    to    procure    releases  -  Booth  v.  Ryan,  31  Wis.  45  ;  Robards 

which  he  knew  were  of  little  or  no  im-  r.  Cooper,  16  Ark.  288  ;  Furman  r.  Meek- 

portance,  a  breach  of  which,  if  he  should  er,  24  N.  J.  Eq.  110. 

be  unable  to  procure  them,  would  subject  «  Aikin  v.  Morris,  2  Barb.  Ch.  140. 

him   to   small   damages;  but  he  might  be  *  Allen  v.  Shackelton,  15  Ohio  St.  145. 

unwilling  to  bind  himself  to  forfeit  $2,500  The  fraud  alleged  in  this  case  was  a  mis- 

of  the   purchase  money  if   he  could  not  representation  of   the  boundaries  of   the 

obtain    the   releases.     The    parties   could  lot,  and  the  property  covered  by  the  mort- 

have  made  the  bargain  either  way.     They  gage. 

chose  to  make,  and   did    make,  indepen-  ''  fJrant  v.  Tallman,  20  N.  Y.  191  ;  Lu- 

dcnt  covenants.    And  there  is  no  principle  throp  v.  Godfrey,  6  Thomp.  &  C.  96;  S. 

established   in  courts  of  equity  by   which  C.  3  Hun,  739. 

an  effect  will  be  given  to  such  covenants  •■'  Northrop  w.  Sumney,  27  Barb.  (N.  Y.) 

different  from  their  legal  effect,  and  indo-  196. 
pendent  covenants  turned  into  condition- 

447 


§§  1507-1509.]       FORKCLOSURK    BY    KQUlTAliLE   SUIT. 

acted  \\\nn\  by  tlio  purrhiist'r,  may  be  <^roiin(l  for  ri'lief  in  respect 
to  a  mortgage  given  for  the  purchase  money. ^ 

1507.  An  assifxnoe  of  mortgage  not  due  is  not  subject  to 
this  defence.  Faibirc  of  title  to  a  part  of  tiie  })remis('s  for  the 
purchiise  money  of  wiru-li  tlio  mortgage  was  given  is  no  defence 
to  an  action  by  an  assignee  of  the  mortgage,  wlio  pureliased  it 
before  due,  and  without  notice  of  such  faihire.^  And  as  ah-eady 
stated  such  defence  would  not,  generally,  avail  against  the  origi- 
nal mortgagee,  for  the  mortgagor's  remedy  would  be  on  the  cov- 
enants of  the  deed  of  purchase;  but  when  the  defence  may  be 
taken,  the  defendant  may  show  that  the  assignment  of  the  mort- 
gage was  colorable  only,  and  that  the  mortgagee  is  still  the  equi- 
table owner.3 

1508.  Validity  of  title  may  be  made  a  condition  precedent 
to  the  pasnnent  of  the  mortgage.  Wliere  the  mortgage  and 
note  are  conditioned  that  the  note  shall  not  be  deemed  due  and 
payable  until  the  title  of  the  grantor,  which  was  known  to  be  de- 
fective as  to  a  portion  of  the  premises,  is  perfected,  the  mortgagor 
may  set  up  the  non-performance  of  this  condition  as  a  defence, 
and  be  allowed  the  value  of  that  portion  of  the  property  in  set- 
off ;  but  he  should  be  required  at  the  same  time  to  release  what- 
ever title  he  may  have  acquired  to  it  by  his  deed.*  A  mortgage 
for  purchase  money  has  been  regarded  as  conditional  upon  the 
title,  even  when  the  condition  is  not  expressed.  And  so  where  a 
mortgage  was  given  of  one  tract  of  land  to  secure  the  purchase 
money  of  another  tract,  which  the  mortgagee  covenanted  by  his 
bond  to  convey  with  covenants  of  warranty,  in  an  action  to  fore- 
close the  mortgage,  the  failure  of  title  in  the  vendor  was  declared 
a  good  defence,  on  the  ground  that  the  mortgagor  only  undertook 
to  pay  the  mortgage  on  the  condition  that  the  mortgagee  had  title 
to  the  tract  he  agreed  to  convey.^ 

1509.  Statute  of  limitations.  —  But  the  fact  that  the  debt 
secured  by  the  mortgage  is  barred  by  the  statute  of  limitations  is 
no  defence  to  a  bill  to  foreclose  it.^  In  a  few  states,  however, 
when  an  action  on  the  note  is  barred,  the  remedy  on  the  mort- 

1  Champlin  v.  Lay  tin,  6  Paige  (N.  Y.),  *  Weaver  v.  Wilson,  48  111.  125. 
189  ;  afTd  18  Wend.  407.  ^  gmith  v.  Newton,  38  111.  230. 

2  834-847  ;  Silwell  v.  Kellogg,  14  Wis.  ^  See  §  1204.  The  effect  of  the  statute 
461.  of    limitations   is   there   fully  examined. 

8  Lathrop  v.  Godfrey,  3  Ilun  (N.  Y.),  See,  also,  Haskell  t;.  Bailey,  22  Conn.  573; 
739.  Michigan  Ins  Co.  v.  Brown,  U  Mich.  265. 

448 


THE  ANSWER  AND  DEFENCE.     [§§  1510,  1511. 

gage  is  gone.  Distinct  remedies  may  be  pursued,  but  the  same 
limitation  applies  to  both.^  Moreover,  it  is  held  that  purchasers 
from  the  mortgagor  subsequent  to  the  execution  of  the  mortgage 
may  plead  the  statute  of  limitations  as  a  defence  to  an  action 
commenced  after  the  statute  has  run  against  the  debt  secured. ^ 

1510.  Insanity  of  mortgagor.  —  If  the  sanity  of  the  mort- 
gagor is  questioned,  the  burdt^n  is  upon  the  defendant  to  show  it ; 
and  he  must  show  not  merely  an  incapacity  to  make  a  valid  con- 
tract at  the  date  of  its  execution,  but  that  the  mortgagee  knew 
and  took  advantage  of  the  grantor's  state  of  mind  ;  otherwise,  the 
consideration  being  paid,  the  security  will  be  held  good  for  the 
amount,  although  the  insanity  of  the  mortgagor  be  admitted  or 
proved. 

The  mortgage  deed  must  at  the  hearing  be  admitted  or  proved. 
If  there  is  an  attesting  witness,  the  only  question  that  need  be 
asked  of  him  is  whether  the  mortgagor  executed  the  deed  in  the 
witness's  presence.  It  is  not  necessary,  as  in  the  case  of  a  will, 
to  prove  that  the  person  when  he  executed  it  was  of  sound  mind. 
Although  he  has  been  found  insane  by  an  inquisition  of  lunacy, 
it  is  not  tlie  duty  of  the  phiintiff  to  do  more  tlian  prove  the  exe- 
cution of  the  deed.  The  defendant  must  bring  forward  his  own 
case  to  have  the  deed  set  aside,  and  the  burden  of  proof  lies  on 
his  siih;.'^ 

1511.  A  recovery  of  judgment  on  the  mortgage  note  or 
bond  is  no  defence;'*  on  the  contrary  such  judgment  may  be  re- 
lied upon  as  establishing  the  validity  of  the  note  or  bond,  and  of 
the  mortgage  so  far  as  the  debt  is  concerned.^  Neither  is  the 
pendency  of  a  suit  at  law  upon  the  mortgage  debt  any  defence  to 
a  suit  to  foreclose  the  mortgage,  unless  made  so  by  statute."  Of 
course  a  satisfaction  of  a  judgment  upon  the  debt  would  be  a  de- 

J  Coster  V.  Brown,   23  Cnl.  142;  Hoin-  Jenkinson   v.  Ewinp,  17  Ind.  505;  Sever- 

lin  V.  Castro,   22   Cal.  100;  M(Cnrtliy  v.  son    v.   Moore,   17    Ind.    2.'Jl ;    Gocnen    v. 

White,  21    Cal.   495  ;  Lord  v.  Morris,   18  Sehrocder,  18  Minn.  66. 

Cal.  482.     When  there  is  no  written  ohli-  ''  Ilosford   v.  Nichols,  1    riiige   (N.  Y.), 

Ration   for  the  debt,  see  Union,  &c.  Co.  i*.  220;   Morris  v.  Flo^d,  5  Barb.    (N.   Y.) 

Murphy,  &c.  Co.  22  Cal.  620.  I.JO;  Clarke  v.   Bancroft,    13    Iowa,  320. 

''McCarthy    v.    White,    21     Cal.    495;  Sec  Batchelder  w.  Taylor,  11  N.  II.  129. 

Grattan   v.  Wiggins,   23  Cal.  16;  Low  v.  "  Suydam  v.   Bartle,  9  Paige   (N.  Y.), 

Allen,  26  Cal.  141  ;  Lent  v.  Shear,  26  Cal.  294  ;    Williamson   v.  Champlin,   1    Clarko 

861.  (N.  Y.),   9;  Tappan   v.  Evans,  II    N.  H. 

'  Jacobs  V.  Richards,  18  Bcav.  300.  31 1  ;  Guest  v.  Byington,  14  Iowa,  30. 

*  §  936;  Vausant  v.  Allmon,  23  111.  .30; 

VOL.  II.                     29  <^4Q 


§§  ir)12-l')14.]       FORECLOSURE    IIY    EQUITABLE   SUIT. 

fonce.^  Under  tlui  Code  of  New  York  :iiul  tlie  codes  of  some 
other  states  following  that,  proceedings  in  an  action  at  law  are 
suspentleil  by  a  foreclosure  siiit;^  and  if  judgment  has  been 
obtained  at  law,  the  remedy  upon  that  must  bo  first  exhausted.^ 

1512.  If  the  defendant  set  up  satisfaction  of  the  mortgage, 
he  must  clearly  set  out  the  defence  in  his  answer,  and  his  proofs 
must  clearly  substantiate  his  answer ;  and  if  both  answer  and 
the  testimony  be  vague  and  uncertain  the  defence  will  fail.*  Pay- 
ment in  whole  or  In  part  when  properly  set  up  is  a  good  defence, 
not  only  for  the  mortgagoi*,  but  for  junior  incumbrancers.'''  It  is 
a  good  answer  to  a  foreclosure  suit  that  the  debt  for  the  security 
of  which  the  mortgage  was  given  was  an  advancement  or  gift, 
and  that  accordingly  the  deed  and  note  had  been  left  with  the 
mortgagor.*'  The  defence  that  the  complainant  has  received  a 
piece  of  propert)%  which  should  be  applied  on  the  mortgage  debt, 
may  be  taken  by  answer  without  filing  a  cross-bill.' 

1513.  An  agreement  by  the  parties  subsequent  to  the  mort- 
gage by  which  the  rents  of  the  mortgaged  premises  are  assigned 
to  the  mortgagee  to  be  collected  by  him,  and  applied  to  the  debt 
until  it  is  fully  paid,  is  a  good  defence  to  a  suit  to  foreclose ;  ^  and 
so  is  an  agreement  to  rescind  a  sale  of  land,  the  purchase  money 
of  which  the  mortgage  was  given  to  secure,  by  which  the  land 
is  to  be  reconveyed,  and  the  mortgage  surrendered  ;  ^  or  an  agree- 
ment to  extend  the  time  of  payment,^**  when  made  for  a  valuable 
consideration.^^  An  agreement  extending  the  time  of  payment  is 
no  part  of  the  mortgage,  and  does  not  draw  the  mortgage  within 
an  act  forbidding  the  foreclosure  of  a  mortgage  until  one  year 
after  the  last  instalment  is  due.^^ 

1514.  As  a  general  rule  a  defendant  cannot  object  to  an 
insufficient  service,  or  the  ■want  of  service,  upon  another  de- 

1  Farmers'  Loan  &.  Trust  Co.  v.  Reid,  ^  Peabody  v.  Peabody,  59  Ind.  .556. 
3  Edw.  (N.  Y.)  414.  7  Ed},'erton  v.  Young,  43  IlL  464. 

2  Williamson    v.   Champlin,    1    Clarke  ^  Angler  v.  Mastersou,  6  Cal.  61. 
(N.  Y.)  9.  9  Bledsoe  i;.  Radcr,  30  Ind.  354. 

8  Shtifelt  V.   Shufelt,  9  Paige  (N.  Y.),  i"  Dodge  y.  Crandall,  30  N.  Y.  294 ;  An- 

137  ;    North   River   Bank    i;.    Rogers,    8  drews  v.  Gillespie,  47  N.  Y.  487. 

Paige  (N.  Y.),  648.  n  Trayser  v.  Trustees  of  Ind.  Asbury 

*  Suhr  u.  Ellsworth,  29  Mich.  57  ;  Fin-  University,  39    Ind.   556.      Tompkins   v. 

layson  v.  Lipscomb,  16  Fla.  751.  Tompkins,  21  N.  J.  Eq.  338;  Maryott  v. 

6  Prouty   V.  Eaton,  41    Barb.   (N.  Y.)  Renton,  lb.  381. 

409  ;  Prouty  v.  Price,  50  Barb.  (N.  Y.)  344.  ^2  Wallace  v.  Ilussey,  63  Pa.  St.  24. 
bee  Edwards  v.  Thompson,  71  N.  C.  177. 

450 


THE   ANSWER  AND   DEFENCE.  [§  1515. 

fendant  who  is  not  a  necessary  party  to  the  suit.^  Of  course  a 
defendant  may  take  advantage  of  want  of  service,  or  of  an  in- 
efifectual  service,  upon  himself  by  a  special  appearance  and  plea 
in  the  suit ;  or  he  may  in  such  case  take  no  notice  of  the  suit,  as 
he  would  not  be  bound  by  the  decree.  A  decree,  however,  which 
recites  that  process  was  duly  served  upon  a  defendant  is  primd 
facie,  if  not  conclusive,  proof  of  notice  to  him  of  the  foreclosure 
suit.2  It  has  been  held,  however,  that  a  person  who  stands  in 
the  relation  of  surety  for  the  mortgage  debt,  and  whose  right  it 
is  to  have  the  entire  equity  of  redemption  applied  in  the  first 
place  to  the  payment  of  it,  may  require  the  bringing  in  of  parties 
having  an  interest  in  it,  so  as  to  make  the  sale  perfect  against  all 
equities.^ 

1515.  Bill  of  interpleader.  —  If  the  defendant,  admitting  the 
indebtedness,  is  in  doubt  to  which  of  two  claimants  he  ou£fht  to 
pay  it,  he  should  make  his  answer  a  bill  of  interpleader,  placing 
himself  indifferently  between  them.* 

The  mortgagor  cannot  set  up  by  cross-bill  the  defence  that  the 
notes  secured  by  the  mortgage  were  improperly  made  payable  to 
one  of  two  partners  who  has  misappropriated  the  funds  of  the 
firm,  and  is  indebted  to  his  copartner. 

1  Mims  V.  Minis,  35  Ala.  23;  Scrapie  v.         »  Kortright  v.  Smith,  3  Edw.  (N.  Y.) 
Lee,  13  Iowa,  304.  402. 

2  Carpenter  v.  Millard,  38  Vt.  9.  *  Harrison  v.  Pike,  48  Miss.  46. 

451 


CHAPTER  XXXIIL 

THE  APPOINTMENT  OF  A  RECEIVER. 

I.  Wlit-n    a   receiver  will   be   ajipointcd,  I  II.  Duties  and  powers  of  a  receiver,  1535- 
151G-1534.  I  1537. 

1.    When  a  Receiver  will  be  appointed. 

1516.  General  principles.^  —  A  receiver  of  the  rents  and  prof- 
its may  be  appointed  pendente  lite  when  the  mortgage  is  insuffi- 
cient, and  the  party  jjersonally  liable  is  insolvent ;  or  when  it  is 
provided  by  the  deed  that  the  mortgagee  shall  have  the  rents  and 
profits  after  a  default ;  for  otherwise  the  owner  of  the  equity  of 
redemption,  in  all  those  states  where  the  mortgagee's  i-ight  of 
entry  upon  the  happening  of  a  default  is  taken  away,  being  en- 
titled to  the  rents  and  profits  until  a  sale  under  decree  of  court, 
and  possession  under  it  given  to  the  purchaser,  the  holder  of  the 
mortgage  would  be  deprived  of  a  valuable  part  of  his  security .^ 
The  mere  fact  that  there  has  been  a  default  in  the  payment  of 
the  debt  is  no  ground  for  the  appointment  of  a  receiver,^  unless 
there  be  a  stipulation  in  the  mortgage  that  the  mortgagee  shall 
have  the  rents.'*  This  right  to  have  a  receiver  of  the  rents  ap- 
pointed pending  the  litigation  depends  upon  the  general  principle 
of  equity,  that  the  purpose  of  such  an  appointment  is  to  preserve 

1  For  the  law  relating  to  receivers  of  v.  Ripley,  10  Paige  (N.  Y.),  43;  Freling- 
railroad  companies,  see  Jones  on  Rail-  huysen  v.  Golden,  4  lb.  204 ;  Syracuse 
road  Securities ;  the  appointn)ent  and  ju-  Bank  v.  Tallman,  31  Barb.  (N.  Y.),  201  ; 
risdiction  of  such  receivers,  §§  456-492 ;  Whitehead  v.  Wooteu,  43  Miss.  523  ; 
their  rights  and  liabilities,  §§  493-530,'-  Myers  i;.  EstcU,  48  Miss.  372;  Douglass 
their  debts  and  certificates,  §§  5.33-546.  v.   Ciine,   12  Bush   (Ky.),  608;  Newport, 

2  Bank  of  Ogdensburg  v.  Arnold,  5  &c.  Bridge  Co.  v.  Douglass,  lb.  673.  For 
Paige  (N.  Y.),  40;  Astor  v.  Turner,  11  the  reason  intimated  in  the  text,  the  prac- 
Paige  (N.  Y.),  436  ;  Sea  Insurance  Co.  v.  tice  of  appointing  a  receiver  is  chiefly  con- 
Stebbins,  8  Paige  (N.  Y.),  566;  Shotwell  fined  totlio.se  states  where  the  mortgagee's 
V.  Smith,  3  Edw.  (N.  Y.)  Ch.  588  ;  War-  right  of  entry  upon  default  is  taken  away, 
ner  v.  Gouverneur,  1  Barb.  (N.  Y.)  38;  «  Williams  v.  Robinson,  16  Conn.  517. 
Clason  V.  Corley,  5  Sandf.  (N.  Y.)  447  ;  ^  Whitehead  v.  Wooten,  43  Mi.ss.  523  ; 
Mitchell  V.  Banlett,  51  N.  Y.  447  ;  Howell  Morrison  v.  Buckner,  1  Hempst.  442. 

452 


WHEN  A  RECEIVER  WILL  BE  APPOINTED.      [§  1516. 

the  property,  so  that  it  may  be  appropriated  to  satisfying  the 
decree  of  court.  A  mortgagee  or  trust  creditor,  to  be  entitled  to 
a  receiver,  must  show  that  it  is  necessary  to  interfere  with  the 
mortgagor's  possession  on  account  of  the  inadequacy  of  the  secu- 
rity and  the  insolvency  of  the  mortgagor.^  This  relief  is  given 
with  great  caution,  and  only  when  the  mortgagee  has  no  other 
adequate  means  of  protecting  his  rights.^  The  necessity  for  this 
protection  and  the  special  grounds  and  reasons  for  asking  it  must 
be  clearly  alleged  and  proved  before  it  will  be  granted.^  The 
appointment  is  a  matter  for  the  sound  discretion  of  the  court.* 

If  the  mortgagor  is  applying  the  rents  and  profits  to  keep  down 
the  interest  on  the  first  mortgage,  the  court  will  not  appoint  a 
receiver  on  the  application  of  the  second  mortgagee,  although  it 
may  appear  that  the  security  is  inadequate  and  the  mortgagor  in- 
solvent.^ If  the  first  mortgagee  be  in  possession,  he  cannot  be 
disturbed ;  and  when  a  receiver  is  appointed  on  the  application  of 
a  subsequent  mortgagee,  it  must  be  with  the  consent  of  prior  in- 
cumbrancers or  without  prejudice  to  their  rights.^  The  first 
mortgagee  may  at  any  time  enter  or  bring  ejectment  against  such 
receiver. 

The  appointment  of  a  receiver  is  an  equitable  remedy,  and  has 
been  said  to  be  in  effect  an  equitable  execution.'^  This  remedy 
bears  the  same  relation  to  courts  of  equity  that  proceedings  in 
attachment  bear  to  courts  of  law.  "  The  issuing  of  an  attach- 
ment and  the  Mppointment  of  a  receiver  in  a  civil  action  are  both 
proceedings  which  are  merely  ancillary  or  auxiliary  to  the  main 
action.  The  action  may  be  prosecuted  to  final  judgment,  either 
with  or  without  such  proceedings.  These  auxiliary  proceedings 
an;  mtircly  intended  to  secure  the  means  for  satisfying  tlie  final 
judgment  in  case  the  plaintiff  should  succeed  in  the  action,  and 

1  Shotwell  V.  Smith,  3  Kdw.  (N.  Y.)  Hackett  v.  Snow,  10  Ir.  Eq.  220;  First 
Ch.  538  ;  Qiiincy  v.  Chcescman,  4  Sandf.  Nat.  Bank  of  Sioux  City  v.  GaRC,  "9  HI- 
(N.  Y.)  Ch.  40.5  ;  Piillan  v.  Cincinnati,  &c.     207. 

R.  R.  Co.  4  Biss.  .15.  ♦  Cone  v.  Paute,  12  Heisk.  (Tenn.)  ."iOC. 

2  FirKt  Nat.  Bank  of  Sioux  City  v.  '  Cortlcyeu  t>.  Hathaway,  3  Stockt.  (N. 
Gace,  79  III.  207  ;  Cortlcycu  v.  Hathaway,     J.)  39. 

3,Stockt.   (N.  J.)  39;  Syracuse  Bank  v.  8  Bryan  v.  Cormirk,  1    Cox's  Eq.  Ca. 

Tallman.  31  Barh.  (N.  Y.)  201.  422;  Dalmer  y.  Dashwood.  2  lb.  378. 

'  .Morri-ion  v.  Biickni-r,  Hi^np.  (Tenn.)  '  Jeremy's  Eq.  .lur.  249. 
U2;    Callanan    v.  Shaw,    19   Iowa,    183; 

453 


§§  1.") 1 7-1. ')!!).]        rilH    APPOINTMKNT    OF    A    RKCKIVKK. 

thov  I'liM  only  l>i^  resorted  to  wiuM-e  tlu>  special  circumstances  exist 
wliicli  the  law  prescribes  for  their  institution."  ^ 

1517.  A  receiver  may  be  appointed  on  the  application  of 
the  mortgagor  as  against  the  mortgagee  in  poss(;ssion,  when 
there  is  et]uital)le  ground  for  it ;  as,  for  instance,  when  the  mort- 
gagee is  irresponsible,  and  the  rents  and  profits  are  liable  to  be 
lost,  or  he  is  committing  waste.  But  if  he  be  responsible,  and 
anything  remains  due  to  him  on  the  mortgage  debt,  the  appoint- 
ment will  not  be  made  ;  and  his  affidavit  that  there  is  a  balance 
due  him  will  be  sufficient  to  i)revent  the  appointment,  for  the 
question  of  indebtedness  will  not  be  tried  on  such  an  application  ; 
and  when  the  question  depends  upon  a  settlement  of  the  mort- 
gagee's account,  it  can  be  determined  only  upon  a  suit  in  equity 
to  redeem.^ 

A  receiver  will  not  be  appointed  in  a  proceeding  to  enforce  a 
vendor's  implied  lien.  It  is  no  part  of  the  contract  of  sale,  either 
express  or  implied,  that  the  vendor  shall  appropriate  anything  but 
the  land  itself  by  sale,  for  the  satisfaction  of  his  purchase  money  ; 
and  it  is  a  part  of  the  implied  contract  that  the  purchaser  is  en- 
titled to  the  possession  until  the  land  is  sold  to  enforce  the  lien.^ 

1518.  This  remedy, is  regarded  as  peculiarly  appropriate  in 
oases  of  mortgages  of  leasehold  estates,  inasmuch  as  the  value 
of  such  a  security  consists  chiefly  in  the  right  to  receive  the  rents, 
and  the  delay  of  protracted  litigation  may  wholly  destroy  this 
value*  In  such  a  case  there  may  be  urgent  need  of  the  aid  of  a 
receiver  by  reason  of  the  mortgagor's  failure  to  pay  the  rent,  and 
the  landlord's  threatening  an  eviction  ;  and  a  receiver  may  con- 
sequently be  appointed  before  answer,  and  even  before  the  service 
of  process  upon  the  defendant  mortgagor.^ 

1519.  The  English  rule,  which  prevailed  before  the  right  was 
made  general  by  a  recent  statute,^  was  that  a  mortgagee  who  had 

1  Cincinnati,  Sandusky  &  Cleveland  R.  statute  applies  to  all  mortgages,  those  con- 
R.  Co.  v.  Sloan,  31  Ohio  St.  1,  per  White,  J.  taining   powers  of   sale   as  well  as  those 

2  Bolles  V.  Duff,  33  How.  (N.  Y.)  Pr.  that  do  not.  It  enables  the  mortgagee  in 
481  ;  Patten  v.  Accessory  Transit  Co.  4  all  cases  where  the  jjaymcnt  of  the  prin- 
Abb.  (N.  Y.)  Pr.  237  ;  Quinn  v.  Brittain,  cipal  is  in  arrear  one  year,  or  the  interest 
3  P2dw.  (N.  Y.)  314.  six  months,  or  after  any  omission  to  pay 

3  Morford  v.  Hamner,  59  Tenn.  391.  any    insurance   premium,  which,   by  the 
*  Astor   V.   Turner,  2    Barb.    (N.    Y.)     terms  of  the  deed,  ought  to  be  paid,  to  ob- 

444.  tain  the  appointment  of  a  receiver  of  the 

6  Barrett  y.  Mitchell,  5  Ir.  Eq.  501.  rents   and   profits  of   the   estate.      He  is 

«  23  &  24  Vict.  c.  145,  §§  11-32.      This     deemed  the   agent  of   the    mortgagor  or 

454 


WHEN   A   RECEIVER   WILL   BE    APPOINTED.  [§  1520. 

a  legal  estate  and  might  enter  after  a  default,  or  recover  possession 
at  law,  was  not  entitled  to  a  receiver  of  the  rents.i  A  subsequent 
mortgagee,  however,  having  an  equitable  estate  only,  and  being 
unable  to  enter  as  against  the  first  mortgagee,  was  held  to  have  a 
better  ground  for  the  application,  and  was  therefore  generally  en- 
titled to  a  receiver  when  proper  occasion  for  the  appointment  was 
shown.2  This  distinction  was  clearly  established  by  Lord  Eldon, 
upon  the  ground  that  equity  will  not  interfere  when  the  mort- 
gagee has  an  adequate  remedy  at  law.^  When,  under  peculiar 
circumstances,  the  reason  for  this  distinction  fails,  and  the  mort- 
gagee, although  having  the  legal  estate,  is  unable  to  take  posses- 
sion, he  is  entitled  to  this  relief  in  equity ;  as  where  a  mortgage 
was  given  by  a  surety  in  addition  to  one  s^iven  by  the  principal 
debtor,  yet  with  a  proviso  that  the  mortgagee  should  not  have 
recourse  to  the  surety's  estate  or  be  at  liberty  to  sell  it  until  the 
estate  primarily  liable  shall  prove  an  insufficient  security.'* 

1620.  In  the  United  States,  courts  of  equity  have  generally 
exercised  their  powers  in  appointing  receivers  with  much  more 
freedom.  In  some  courts  there  has  been  a  disposition  to  leave  a 
mortgagee  who  lias  the  legal  title,  or  the  right  at  law  to  enter  and 
take  possession  of  the  mortgaged  premises,  to  pursue  his  legal 
remedy  without  aid  from  a  court  of  equity.^  There  must  be  some- 
owner  of  the  property,  who  is  solely  re-  "  though  the  court  refuses  to  grant  the 
sponsible  for  his  acts  or  defaults,  unless  receiver  in  cases  where  there  is  no  ques- 
otherwise  provided  for  in  the  mortgage,  tion,  and  the  mortgagee  can  take  posses- 
The  statute  regulates  his  duties,  powers,  sion  at  once,  there  biinix  no  defence  wiiat- 
and  compensation.  This  right  to  obtain  ever  to  his  action  of  ejectment,  siill  if  the 
tlie  appointment  of  a  receiver  is  inde-  mortgagee  cannot  take  possession,  as  if,  for 
jHjndentof  any  action  to  foreclose.  It  is  instance,  there  is  a  prior  mortgagee,  who 
not  unusual  to  provide  in  the  mortgage  refuses  to  take  possession,  then,  at  the  in- 
deed for  the  ajipointment  of  a  receiver,  stance  of  the  second  mortgagee,  the  court 
See  Jolly  v.  Arbuthnot,  4  De  G.  &  J.  224  ;  does  grant  a  receiver." 
Law  V.  Glenn,  L.  H.  2  Ch.  Ap.  634.  *  Ackland  v.  Gravener,  suimi. 

»  Berney  i'.  Sewell,  1  J.  &  W.  C47  ;  Cox  ^  Oliver  v.  Decatur,  4  Cranch  C.  C. 
V.  Champncys,  Jac.  570  ;  Sturch  v.  Young,  458  ;  Williamson  v.  Now  Albany  U.  11.  Co. 
5  Beav.  557;  Ackland  v.  Gravener,  31  1  Biss.  201  ;  Union  Trust  Co.  r.  St.  Louis, 
Beav.  482.  &c.  K.  U.  Co.  4  Cent.  L.J.  585  ;  Frisbic  v. 

2  An<lerson  v.  Kemshead,  16  Beav.  329 ;  Bateman,  24  N.  J.  Eq.  28  ;  Best  v.  Scher- 
Dalmer  v.  Dashwood,  2  Cox,  378;  Gre-  mior,  2  Halst.  Ch.  (N.J.)  154;  Ccrllcyeu 
viUc  i;.  Fleming,  2  Jo.  &  Lat.  335  ;  Mea-  v.  Hathaway,  11  N.  J.  K<i.  3<>.  In  the  last 
den  I'.  Sealey,  6  Hare,  620.  named  case  the  court  appointed  a  receiver 

"Berney  v.  Sewell,  .su/irn.  Sec,  also,  upon  the  application  of  a  subse<|uent  mort- 
obBcrvations  of  I^ord  Uomilly  in  Ackland  ga^ec, — showing  the  insolvency  of  the 
V.   Gravener,  supra,  where    he  Bays  that     mortgagor,  inadequacy  of  the  security,  the 

466 


§  l.VJl.] 


THE    ArrOINTMKNT    OF   A    RECEIVER, 


thinjx  inort*  tlian  tlio  inad^'quai'v  of  (lie  socurity  and  tlio  insolvency 
of  tlio  niorto;agor  to  warrant  the  ai)poiiitnient,  at  the  iiistancio  of  a 
mortgagee  having  the  legal  estate.  Other  special  circumstances 
calling  for  this  equitable  relief  must  be  shown  ;  either  that  the 
mortgagee  has  only  an  equitable  estate  and  cannot  enter  and  take 
possession,  or  that,  by  reason  of  the  fraud  or  negligence  of  the 
person  in  possession,  the  security  is  likelj'  to  be  impaired  ;  as,  for 
instance,  by  allowing  the  taxes  to  go  unpaid,  whereby  a  lien  is 
created  superior  to  that  of  the  mortgage,  and  which  may,  if  not 
extingiiislicd,  extinguish  the  mortgage.^ 

1521.  The  prevailing  rule,  however,  is  that  a  receiver  will  be 
appointed  u{)on  the  application  of  a  mortgagee  without  reference 
to  his  legal  rights,  whenever  sufficient  equitable  grounds  for  this 
relief  are  shown  ;  which  are  in  general  that  the  premises  are  an 
inadequate  security  for  the  debt,  and  the  mortgagor  or  other  per- 
son in  possession,  who  is  personally  liable  for  the  debt,  is  unable 
to  make  good  the  deficiency .^ 

It  is  true  that  in  half  or  more  of  the  states  and  territories  the 
mortgagee  has  no  legal  rights  that  would  aid  him  in  such  case,  and 
resort  to  equity  is  the  only  remedy  ;  but  it  is  equally  an  aj)pro- 
priate  remedy  in  some  states  in  which  the  mortgagee  has  a  legal 

sale  of  the  jiremises  to  an  insolvent  pur-  rity  with  the  disadvantaj^es  of  a  second 
chaser,  who  hail  agreed  as  part  of  the  con-  incunihraiicer."  See,  also,  McLean  v. 
sideraiion  to  reduce  the  niortf,'age  debt,  Presley,  56  Ala.  211,  where  a  receiver 
and  upon  obtaining  possession  refused  to  was  denied  to  a  mortgagee  after  he  had 
keep  his  ajxreeinent,  and  offered  to  sell  the  himself,  without  riuht,  become  purchaser 
property  for  the  amount  of  the  incum-  at  a  sale  under  a  power  in  the  mortgage, 
brances  after  taking  off  the  crops.  Mr.  i  Mahon  v.  Crothers,  28  N.  J.  Eq.  567  ; 
Chancellor  Williamson,  remarking  upon  Cone  v.  Paute,  12  Heisk.  (Tenn.)  506; 
the  general  rules  governing  the  appoint-  Johnson  v.  Tucker,  2  Tenn.  Ch.  398. 
ment  of  a  receiver,  said  that  the  courts  '^  Bank  of  Ogdensburgh  v.  Arnold,  5 
of  New  Jersey  had  not  adopted  the  rule  Paige  (N.  Y.),  39  ;  Shotwell  v.  Smith,  3 
of  appointing  a  receiver,  simply  on  the  Edw.  (N.  Y.)  Ch.  588;  Sea  Ins.  Co.  v. 
ground  of  the  inadequacy  of  the  security  Stebbins,  8  Paige  (N.  Y.),  566  ;  Warner  v. 
and  the  insolvency  of  the  mortgagor.  Gouverneur,  1  Barb.  (N.  Y.)  38 ;  Jenkins 
"This  court  has  gone  upon  the  ground,  v.  Ilinman,  5  Paige  (N.  Y.),  .309;  Syra- 
that  where  a  man  takes  a  mortgage  .secu- 
rity for  hisdelit,  and  permits  the  mortgagor 
to  remain  in  possctsion,  if  there  is  a  default 
jn  payment,  the  mortgagee  must  appropri- 
ate the  property  in  the  usual  way  to  the 
payment  of  the  debt.  If  he  is  a  first 
mortgagee  and  wishes  possession,  he  must 
take  lii-?  legal  remedy  by  ejectment.  If  he 
js  a  second  mortgagee,  he  takes  his  secu- 

456 


cuse  Bank  v.  Tallman,  31  Barb.  (N.  Y.) 
201  ;  Patten  v.  Accessory  Transit  Co.  4 
Abb.  (N.  Y.)  Pr.  235;  S.  C.  13  How.  502; 
Bolles  V.  Duff,  35  How.  (N.  Y.)  Pr.  481  ; 
Smiih  V.  Tiffany,  13  Hun  (N.  Y.),  671. 
This  broader  rule  seems  to  be  favored  in 
Mississippi.  Myers  v.  Estell,  48  Miss.  372, 
per  Sirnrall,  J.  ;  Whitehead  y.Wooten,  43 
Miss.  526  ;  Phillips  v.  Eiland,  52  Miss.  721. 


.  WHEN   A   RECEIVER   WILL   BE   APPOINTED.  [§  1522. 

remedy  for  recovering  possession.  In  several  states  there  is  a 
statutory  provision  in  the  same  terms,  that  in  an  action  by  a  mort- 
gagee for  the  foreclosure  of  his  mortgage,  and  the  sale  of  the 
mortgaged  property,  a  receiver  may  be  appointed  where  it  ap- 
pears that  the  mortgaged  property  is  in  danger  of  being  lost,  re- 
moved, or  materially  injured,  or  that  the  condition  of  th»  mort- 
gage has  not  been  performed,  and  that  the  property  is  probably 
insufficient  to  discharge  the  mortgage  debt.^  This,  however,  is 
merely  an  enactment  of  the  general  equitable  rule. 

1522.  The  appointment  as  affected  by  statutes.  —  As  al- 
ready seen,  by  the  statutory  provisions  of  many  of  the  states  the 
mortgagee  is  not  in  any  case  entitled  to  possession  of  the  mort- 
gaged property  upon  a  default,  but  the  mortgagor  may  still  retain 
possession  until  a  sale  is  made  under  a  decree  in  a  foreclosure  suit, 
and  in  some  states  even  until  the  lapse  of  a  period  of  redemption 
allowed  after  the  sale.  Some  of  these  statutes  would  seem  to  pre- 
vent the  appointment  of  a  receiver  in  any  case  ;  while  others 
might  be  regarded  as  giving  special  occasion  for  it,  because  they 
prevent  the  mortgagee's  obtaining  possession  and  protecting  his 
rights,  as  he  might  under  a  mortgage  conveying  the  legal  title  at 
common  law.  Even  statutes  precisely  alike  have  in  different 
states  been  interpreted  as  operating  in  opposite  ways  upon  the 
generally  received  rules  for  the  appointment  of  receivers  in  fore- 
closure suits ;  for  while  in  Florida  and  Nevada  the  possession 
which  the  law  allows  to  the  mortgagor  until  a  foreclosure  sale  is 
regarded  as  subordinate  to  the  equitable  rights  of  the  mortgagee 
to  the  rents  and  profits  under  the  condition  of  things  which  ordi- 
narily authorizes  the  appointment  of  a  receiver  in  equity,  and 
while  the  statute  confining  the  mortgagee  to  one  remedy  in  case 
of  default,  which  is  an  equitable  suit  for  foreclosure  and  sale  of 
the  property,  and  a  judgment  for  any  deficiency,  is  held  to  be  a 
reason  for  adopting  the  practice  of  appointing  a  receiver  when 
there  were  the  usual  grounds  for  the  apitointment ;  ^  in  California, 

'  California:  Codes  &  Stats.  1876,  §  10,  Code.     Ohio:  R.  S.  1860,  p.  1019.      New 

564.     Arkansas:  Di^.  1874,  p.  8.38,  §  4810.  York:  in   similar    terms.     3    U.   S.  1875, 

Kentucky:    Code  of  I'riic.    1876,   §    299.  511,  §244. 

Dakota  T. :  Code  of  Civil  Procedure,  1877,  2  Pusco  v.  Gamhle,  1.")  VUi.  562  ;  Ilymnn 

§  2\'.>.     Montana!. :   Laws,  1877,  p.  9.T  ;  i;.  Kelly,  1  Nev.  179.     The  court  say,  that 

Code  of  Civil  rroccdure,  §  2'JI.     Wash-  tlie  leKi>iaturcliHvinp  forbid  the  morttjagee 

ington  T. :  Laws,  1877,  p.  40.   Wyoming T. :  jiuiHuinj;  the  common  law  reencdy  of  eject- 

Couip.  Laws,  1877,  c.   1.3,  §  2.V3,  of  Civil  meiit  is  rather  a  reason  for  a  more  lihcral 

457 


§  loll^.]  Tlir.    ArrOlNTMRNT    OF    A    UKCKIVER. 

on  tlu>  otlior  hand,  it  was  licUl  tliat  by  reason  of  tlio  shituto  the 
jn-ai'tii'o  of  a[>i>(iintin<;  a  n'coivcr  to  coHoct  the  rents  ]H'n(lin^  the 
suit  was  not  applicable  :  tliat  lh»^  nn)itt^agor  continued  to  be  tlie 
owner  of  the  estate,  and  is  entitled  to  the  possession  of  it  until  it 
passes  to  sonu*  one  else  under  a  forech)sure  salo.^  In  Michigan, 
alsi>.  the  mortgagor  being  entitled  by  statute  to  the  possession  and 
consequently  to  the  rents  and  profits  of  the  mortgaged  premises, 
until  he  is  divested  by  foreclosure  and  sale,  it  is  held  that  it  is  not 
competent  to  cut  short  his  right  in  this  respect  by  the  appoint- 
ment of  a  I'eceiver  in  the  foreclosure  suit.^ 

1523.  A  subsequent  mortgagee  cannot  have  a  receiver  ap- 
pointed to  the  prejudice  of  any  prior  incumbrancer,  to  whom 
something  is  due,  in  case  such  incumbrancer  is  in  actual  posses- 
sion ;  and  whenever  an  appointment  is  made,  it  is  without  preju- 
dice to  the  right  of  any  such  prior  incumbrancer  to  take  posses- 
sion.-'^ The  possession  of  the  prior  mortgagee,  and  his  applica- 
tion of  the  rents  to  the  debt  due  him,  may  be  as  much  to  the 
advantage  of  tlie  subsequent  mortgagee  as  his  own  would  be.  If 
the  subsequent  mortgagee  insists  upon  obtaining  possession  liim- 
self,  his  only  course  is  to  redeem  the  estate  from  the  prior  incum- 
brance by  paying  it  off ;  *  and  this  may  be  rendered  necessary  in 
case  the  prior  mortgagee  in  possession  does  not  apply  the  income 
of  the  property  to  the  payment  of  the  interest  and  principal  of 
the  mortgage  debt,  but  applies  it  to  other  debts  of  the  mortgagor, 
or  pays  it  over  to  him.  A  receiver  may  even  be  appointed  on 
the  application  of  the  mortgagor,  when  his  grantee  or  mortgagee 

exercise  of  the  chancellor's  powers  to  pro-  2  Cox,  378 ;  Norway  v.  Rowe,  19  Vcs.  153 ; 

tect  the  security.     They  expressly  dissent  Quinn  v.  Brittain,  3  Edw.  Ch.  314  ;  Tren- 

from  the  case   in   California  next   cited,  ton  Banking  Co.  t>.  Woodruff,  2  Green  (N. 

Guy  r.  Ide,  6  Cal.  99.    See  statute,  §  1521.  J)    Ch.  210;    Wiswall    v.   Sampson,   14 

In  like  manner  an  express  stipulation  in  How.   64.     In   Berney  v.    Sewell,   siqva, 

the  mortgage  that  the  mortgagor  may  re-  Lord    Eldon  said:  "I  rememher    a  case 

tain  possession  of  the  property  until  fore-  where  it  was  much  discus.sed  whether  the 

closure  prevents  the  appointment  of  a  re-  court  would   appoint  a   receiver,  when  it 

ceivcr.        Chadboum    i;.  'Henderson,    58  appeared  hy  the  hill  that  there  was  a  prior 

Tenn.    460.  mortgagee  who  was  not  in  possession.     I 

1  Ibid.  have  a   note  of  that  case.     There    Lord 

2  Wager  v.  Stone,  36  Mich.  364.  Thurlow  made   the  appointment  without 
8  1  Fi-sher's  Law  of  Mortg.  408 ;    Rowe  prejudice  to  the  first  mortgagee's  taking 

V.  Wood,  2  Jac.    &   W.    S.W;  Berney   v.  possession;  and  that  was  afterwards  fol- 

Sewell,  I  Jac.  &  W.  647  ;  Hiles  v.  Moore,  lowed  by  Lord  Kcnyon." 

15  Beav.  175;   Davis   v.  Duke  of   Marl-  *  Trenton   Banking    Co.   v.  Woodruff, 

borough,  2  Sw.  137  ;  Dalmer  v.  Dashwood,  3  N.  J.  Eq.  (2  Green)  210. 
458       . 


■WHEN   A    RECEIVER   WILL   BE   APPOINTED.       [§§  1524,  1525. 

is  in  possession  and  is  insolvent,  and  it  is  probable  that  the  rents 
and  pi'ofits  will  be  lost  through  his  management.^ 

1524.  Consent  of  prior  mortgagee.  —  It  is  not  necessary,  as 
was  at  first  held  by  Lord  Thurlow,^  that  the  first  mortgagee's 
consent  should  be  obtained  before  a  receiver  can  be  appointed  on 
the  application  of  an  equitable  mortgagee.^  If  he  is  not  in  pos- 
session the  application  will  be  allowed  ;  and  he  cannot  prevent  it 
in  any  way  except  by  taking  possession  himself.*  But,  as  already 
stated,  the  appointment  is  made  without  prejudice  to  those  who 
have  prior  rights  in  the  property .°  If  the  prior  mortgagee  has 
the  legal  estate  he  may  take  possession  at  any  time  ;  and  if  he  has 
an  equitable  estate  only  his  equitable  rights  are  protected  by  the 
court.  The  receiver  appointed  at  the  instance  of  a  junior  incum- 
brancer is  entitled  to  receive  the  rents  and  profits  until  the  prior 
mortgagee  takes  possession,  or  has  a  receiver  in  aid  of  his  own  suit 
to  foreclose.*"  It  is  held,  however,  that  if  the  prior  mortgagee  com- 
mences proceedings  in  a  different  court,  a  receiver  already  ap- 
pointed by  another  court  on  the  application  of  a  junior  mortgagee 
will  not  be  interfered  with  while  such  mortgagee  is  in  actual  pos- 
session, and  administering  the  property  under  the  directions  of 
that  court." 

1525.  So  long  as  anything  is  due  the  prior  mortgagee,  how- 
ever small  the  amount,  the  possession  will  not  be  taken  from 
him.^  This  is  stated  by  Lord  Eldon  very  forcibly.  "  If  you  rec- 
ollect in  Mr.  Beckford's  case,  I  went  to  the  every  utmost ;  I  said 
then  that  if  Mr.  Beckford  would  swear  that  there  was  sixpence 
due  to  him,  I  would  not  take  away  the  possession  from  him.     If 

1  Williiims  V.  Kobinson,  10  Conn.  517,  one  having  a  right  prior  to  that  of  the 

524;  Bollcs  )'.  Duff,  35  How.  (N.  Y.)  Pr.  plaintiff  can  afterwards  take  possession. 

481.     See  §  1517.  He  must  finally  account  according  to  the 

*  Phipps  V.  IJishop  of  Bath,  Dick.  G08.  jiriorities  of  the  different  incuniliranccrs. 
»  Bryan  v.  Cormick,  1  Cox,  422.  Beverley  v.  Brooke,  4  Grat.  187. 

*  Silvers.  Bishop  of  Norwich,  3  Swans.  "^  Young  v.  H.  Co.  3  Am.  L.  T.  K.  N. 
112,  note.  S.  '.M  ;  2  Woods,  606. 

6  Dftlmcr  V.  Dashwood,  2  Cox,  378;  "  Chalmers  u.  Goldwin,  cited  anil  corn- 
Davis  i;.  Duke  of  Marlliorough,  2  Swans,  mcnted  upon  in  Quanell  v.  Beckford,  13 
137,  165;   Norway  v.  Kowe,  19  Vcs.  1.53.  Ves.  377  ;   Hilcs  v.  Moore,  15  Bcav.   175; 

9  Washington    Life    Ins.   Co.    v.   Flcis-  Codrington  y.  Parker,  16  VeH.  469  ;  Kaulk- 

chaucr,  10    Hun    (N.  Y.),  117;  Howell  v.  cner   i-.    Daniel,    10   L.  J.  N.   S.   Ch.  .33; 

Ripley.  10  Paige  (N.  Y.),  43;  Sanders  v.  Trenton  Banking  Co  r.  Woodruff,  2  Green 

Lord  Lisli',  Ir.  Ucp.  4  Eq.  43.  (N.  J.)    Ch.   210.     In    this    last  case    the 

In    Viruinia   a  receiver   is  regarded   as  priority  of  the   first  mortgagee  in  posses- 

acting  in  the  interest  of  all  parties,  and  no  sion  was  contested. 

459 


§§  1;VJ(3,  l.')27.]     Tiir.  Ari'OiNTMHNT  of  a  kkckivku. 

tluMV  is  anythiii*^  duo,  I  cuimot  substitute  another  security  for  tliat 
wliit'h  the  niort;j^;i«;ee  has  contracted  for.  1  know  no  case  where 
the  court  h;is  iippointi'd  a  receiver  against  a  mortgagee  in  posses- 
sion, unless  the  parties  making  the  application  will  pay  him  off, 
and  i>av  him  according  to  his  demand  as  he  states  it  himself."  ^ 
If  he  insists  by  his  answer  that  he  has  not  been  fully  paid,  the 
court  will  not  upon  hearing  of  the  motion  try  the  question  whether 
any  balance  is  due.-  Hut  if  he  refuses  to  accept  what  is  due,  or 
will  not  swear  that  something  is  due,  a  receiver  will  be  appointed  ;8 
and  it  being  his  business  to  keep  his  accounts,  if  these  be  so  in- 
complete that  he  cannot  determine  whether  anything  is  due,  the 
court  may  assume  that  nothing  is  due  and  act  accordingly.* 

1526.  As  a  general  rule,  the  appointment  cannot  be  made 
until  a  bill  has  been  filed  for  foreclosure,  and  the  merits  of  the 
case  have  been  disclosed  by  the  defendant's  answer;  ^  though  under 
circumstances  rendering  an  immediate  appointment  necessary  to 
prevent  threatened  loss  and  injury  to  the  propei'ty,  an  appoint- 
ment may  be  made  before  the  defendant's  appearance,^  and  even 
before  service  upon  him,''  and  especially  if  his  residence  be  un- 
known.® The  appointment  may  be  made  at  the  hearing,  though 
not  prayed  for  by  the  bill,  if  the  facts  stated  in  it  are  sufficient  to 
authorize  it.^  On  petition  supported  by  the  proper  proof,  the  ap- 
pointment may  be  made  at  any  time  during  the  pendency  of  the 
suit.  It  is  against  the  policy  of  the  law  that  a  mortgagee  should 
receive  the  appointment,  and  if  he  does  he  is  not  entitled  to  com- 
pensation.^'^ 

1527.  Defences  to  the  application.  —  To  prevent  the  appoint- 
ment of  a  receiver  the  mortgagor  must  either  make  a  special  afl&- 
davit  of  merits,  or  show  that  the  property  is  sufficient  to  secure 
the  mortgage. ^^     His  affidavit  that  he  has  a  good  defence,  without 

1  Bi-rney  v.  Scwcll,  1  Jac.  &  W.  G47.  den  v.  Sealey,  6   Hare,   620  ;  Caillard  v. 

2  Rowe  t;.  Wood,  2  Jac.  &  W.  553.  Caillard,    25    Beav.    512;    McCarthy    v. 

3  Berney  v.  Sewell,  supra.  Peake,  9  Abb.  (N.  Y.)  Vr.  164. 

*  Codrin{,'ton  v.  Parker,   16  Vcs.  469;  ^  Barrett  v.  Mitchell,  5  Ir.  Eq.  .501. 

Hik's  V.  Moore,  15  Beav.  175.  8  Dowiing  i'.  Hudson,  14  Beav.  423. 

6  Astor  V.  Turner,  2  Barb.  444;  3  How.  ^  Malcolm  v.  Montgomery,  2  Mol.  500; 

(N.  Y.)  Pr.  225  ;  11   Pai{;e,  436 ;  Katten-  Osborne  v.  Harvey,  1  Y.  &  C.  C.  C.  116. 

stroth  V.  Astor  Bank,  2  Duer  (N.  Y.),  632  ;  i"  Lani,'staffe  v.  Fenwick,  10  Ves.  405  ; 

Anon.  1   Atk.  .578  ;  Morrison  v.  Buckner,  Scott  v.  Brest,  2  Tenn.  II.  238. 

Hemp.  443  ;  Hardy  i'.  McClelian,  53  Miss.  "  Sea  Ins.  Co.  v.  Stebbins,  8  Pait,'e  (N. 

507.  Y.),  565;    Bancker  v.   Hitchcock,   1   Ch. 

0  Ex  parte  Whitfield,  2  Atk.  315 ;  Nea-  Dec.    (N.  Y.)    88;    Lofsky  v.  Maujer,  3 

460 


WHEN   A   RECEIVER   WILL   BE   APPOINTED.       [§§  1528-1530. 

stating  what  it  is,  is  no  answer  to  the  application  for  a  receiver.^ 
If  he  has  conveyed  the  hind  subject  to  the  mortgage,  he  is  in  no 
position  to  oppose  the  appointment.^  Only  those  whose  rights 
would  be  affected  by  the  appointment  can  oppose  it.  Upon  a  bill 
to  restrain  waste  by  the  mortgagor,  there  is  no  occasion  for  a  re- 
ceiver; the  injunction  is  sufficient.^ 

After  a  receiver  has  once  been  appointed  without  opposition 
made  at  the  time,  an  objection  raised  at  a  later  stage  of  the 
case  that  the  application  was  improperly  allowed  will  not  be  re- 
garded.* 

1528.  The  application  should  show  the  defendant  in  posses- 
sion, and  Jiotice  of  the  application  should  be  given  hi  in  unless  he 
has  defaulted  in  the  action,^  inasmuch  as  in  general  tiie  court  is 
warranted  in  appointing  a  receiver  only  when  the  property  is  in 
possession  of  a  party  to  the  foreclosure  suit,  either  by  himself  or 
his  tenant.  If  the  premises  are  in  possession  of  a  tenant  who  is 
not  himself  a  party  to  the  suit,  he  is  not  disturbed  in  his  posses- 
sion, but  is  directed  to  attorn  to  the  receiver.*^  When  the  tenant 
is  before  the  court,  the  receiver  is  appointed  without  restriction.'' 

There  can  be  no  appointment  of  a  receiver  of  mortgaged  lands 
after  an  assignee  in  bankruptcy  of  the  estate  of  the  owner  of  the 
equity  of  redemption  has  been  appointed  and  has  taken  posses- 
sion of  the  mortgaged  property.  The  assignee  is  clothed  with 
functions  similar  to  those  of  a  receiver.^ 

1529.  The  plaintiff  must  show  by  affidavit  the  amount  due 
after  the  allo\vance  of  all  just  credits,  if  decree  has  been  taken  pro 
confeisso.  The  statement  in  the  bill  is  not  enough. ^  The  affidavit 
must  also  show  that  the  defendant  is  in  possession.  If  the  amount 
actually  due  is  in  dispute,  and  the  answer  denies  the  allegations 
as  to  the  inadequacy  of  the  security,  the  court  will  not  interfere 
with  the  possession.'*^ 

1530.  Generally   the  mortgage  debt  must  be  already  due 

Sanflf.   (N.  Y.)  Ch.  fi;» ;  Darcy   r.  Blake,  ^  High  on  Receivers,  §  GGO ;  Sen  Insur- 

1    Molloy,  247;  Sliephtrd   v.  Murdock,  2  ancc  Co.  i'  Stel)l)ins,  8  Pjii;;e  (N.  V.),  565. 

II).  531  ;  Lealiy  v.  Arthur,  1  llogan,  92.  "^  Sea  In.surance  Co.  i'.  Stebltins,  supra; 

1  Sea  Ins.  Co.  v.  Stebbins,  8  Paige  (N.  Smith  v.  Tiffany,  13  Hun  (N.  Y.),  G7I. 
Y.)  565.  T   Keep  i-.  Mieliigan   Lake  Slioro  li.  R. 

2  Wall    St.   Fire  Ins.  Co.  v.  Loud,  20  Co.  6  Chicago  Leg.  News,  101. 
How.  (N.  Y.)  Pr.  95.  »  In  rn  Bennett,  2  Hughes,  156. 

'  Robinson  v.  Preswick,  3  ICdw.  (N.  Y.)         '  Rogers  v.  Newton,  2  Ir.  K(|.  40. 
Ch.  246.  w  Callanan  v.  Shaw,  19  lowu,  183. 

♦  Post  I'.  Dorr,  4  Kdw.  (N.  Y.)  Ch.  412.  4(31 


§§  15B1,  1532.]     THE  appointment  of  a  receivek. 

to  ontitlo  tlu>  mortgagee  to  liave  a  receiver  appointed  ;  at  any  rate 
tliert^  must  have  been  siu-h  a  default  as  entitU's  him  to  commence 
an  action  to  foreclose  the  morttj;a<;e.^  Yet  a  receiver  lias  been 
granted  under  peculiar  circumstances  when  the  mortgagee  was  not 
entitleil  to  a  forct'losure,  and  merely  to  keep  down  the  interest  on 
the  mortgage  ;  as  in  a  case  where  the  principal  debt  did  not  be- 
come due  until  after  the  mortgagor's  death.^ 

1531.  While  a  receiver  is  usually  appointed  only  after  the 
filing  of  a  bill  to  foreclose  the  mortgage,  and  while  it  is  pend- 
ing,'^  yet  under  circumstances  showing  an  urgent  occasion  for  it,  a 
receiver  has  been  appointed  after  the  decree  for  foreclosure,  as 
where  there  was  danger  that  a  tenant  in  possession  might  by  fur- 
ther delay  acquire  rights  by  adverse  possession.^  Generally  the 
appointment  does  not  affect  the  rights  of  persons  who  are  not  par- 
ties to  the  suit ;  and  will  not  be  made  unless  the  person  in  posses- 
sion is  either  a  party  to  the  suit  or  his  tenant.^ 

1532.  To  warrant  an  appointment  of  a  receiver  it  must  be 
shown  both  that  the  property  itself  is  an  inadequate  security, 
and  that  the  debt  or  the  deficiency  after  the  application  of  the 
proceeds  of  the  security  could  not  be  collected  of  the  mortgagor  or 
other  person  liable  for  it.^  The  property  may  be  inadequate  se- 
curity for  all  the  incumbrances  upon  it,  and  yet  be  sufficient  for 
the  particular  mortgage  which  is  the  subject  of  the  foreclosure 
suit.^ 

1  Bank  of  Ogdensburgh  v.  Arnold,  5  Stebbins,  8  Paige  (N.  Y.),  565 ;  Myers  v. 
Paige  (N.  Y.),  38;  Lofsky  v.  Maujer,  3  Estell,  48  Miss.  403;  Keep  v.  Mich.  Lake 
Sandf.  (N.  Y.)  Ch.  69;  Quincy  u.  Cheese-  Shore  R.  R.  Co.  6  Chicago  L.  N.  101  ; 
man,  4  Sandf.  (N.  Y.)  Ch.  405.  Pullan  v.  Cincinnati, &c.  R.  R.  Co.  4  Biss. 

2  Bunowcs  V.  Molloy,  2  Jo.  &  Lat.  521  ;  33  ;  Morrison  v.  Buckner,  Hemp.  442. 

S.  C.  8  Ir.  E(|.  482  ;  Newman  v.  Newman,        ^  Warner  v.  Gouverneur,  1   Barb.  (N. 

2  Bro.  C.  C.  92,  note  6  ;  Latimer  v.  Moore,  Y.  36,  per  Edmonds,  J.     "  The  allegation 

4  McLean,  111.  is  that  they  are  not  an  adequate  security 

'  Adair  v   Wright,  16  Iowa,  385;  and  for  '  all  just  incumbrances' on  them.     All 

see  Barlow  v.  Gains,  8  Bcav.  329.  of  the  just  incumbrances,  it  would  seem, 

*  Thomas  v.  Davies,  1 1  Beav.  29 ;  and  amount  to  near  $70,000,  while  the  claim 

see  Hackett  v.  Snow,  10  Ir.  Eq.  220.  of  the  defendants  is  not  more  than  half 

6  Sea  Ins.  Co.  v.  Stebbins,  8  Paige  (N.  that  sum.     And  while  the  defendants  do 

Y.),  565;  and  see  Zeiter  v.  Bowman,  6  not  say  whether  the  premises  are  or  are 

Barb.  (N.  Y.)  133.  not  adequate  security  for  the  amount  due 

''  Astor  V.  Turner,  2  Barb.  (N.  Y.)  444;  to  them,  the  mortgagor  on  the  other  hand 

Quincy  y.  Cheeseman,  4  Sandf.  (N.  Y.)  Ch.  avers    that    they   are   sufficient  for   that 

405  ;  Hyman  v.  Kelly,  1  Nev.  179;  Brown  amount.     There  is,  therefore,  no  ground 

V.   Chase,    Walk.    (Mich.)   43;   Adair  v.  for  the  appointment  of  a  receiver." 
Wright,   16   Iowa,  385;    Sea  Ins.   Co.  v. 

462 


DUTIES   AND   POWERS   OF   A   RECEIVER.       [§§  1533-1535. 

1533.  There  may  be  other  and  additional  grounds  for  the 
application ;  but  these  two  are  the  principal  ones  which  are  essen- 
tial in  every  case  ;  and  usually  no  others  are  essential  if  these  are 
fully  and  clearly  alleged  and  proved.  Coupled  with  these  there 
may  be  strong  grounds  for  interference,  in  the  fact  that  the  taxes 
have  been  suffered  to  remain  unpaid,  and  the  property  to  be  sold 
to  satisfy  them,  and  that  the  insurance  has  been  neglected  ;  ^  or 
that  there  is  a  contest  as  to  whether  a  large  portion  of  the  prop- 
erty claimed  under  the  mortgage  is  really  covered  by  it ;  ^  or  that 
there  is  fraud  or  bad  faith  on  the  mortgagor's  part  in  the  manage- 
ment of  the  property,  as  in  appropriating  the  rents  and  profits 
to  other  purposes  than  keeping  down  the  interest  on  the  incum- 
brances, or  in  permitting  the  property  to  depreciate  and  the  build- 
ings to  go  to  decay. ^ 

1534.  In  determining  whether  the  security  is  adequate, 
the  proper  criterion  in  respect  to  city  property  is  the  rental  of  it 
rather  than  the  price  it  would  be  likely  to  sell  for.  The  income 
of  impi-oved  property  in  large  towns  is  considered  a  fair  test  of  its 
value  as  an  investment.*  Of  course  there  may  be  circumstances 
which  in  particular  cases  will  modify  or  make  inapplicable  such 
a  test. 

2.  Duties  and  Poioers  of  a  Receiver. 

1535.  A  receiver  is  the  representative  of  all  parties  in 
interest ;  of  the  mortgagee,  the  mortgagor,  and  all  holding  under 
them,  and  all  having  rights  superior  to  theirs.  The  receiver  of 
a  bankrupt  corporation  represents  not  only  the  mortgagees,  but 
the  assignees  in  bankruptcy,  the  creditors,  and  stockholders  as 
well.^  He  is  not  allowed  to  act  with  reference  to  the  mortgaged 
property  in  any  other  relation  inconsistent  with  his  duties  as  re- 
ceiver. If  he  is  also  mortgagee,  he  will  not  be  permitted  to  deal 
with  the  property  in  any  way  inconsistent  with  his  duty  as  a  re- 
ceiver acting  in  the  interest  of  all  parties  concerned.^ 

But  a  receiver  of  a  corporation  empowered  to  enforce  a  mort- 

1  Wall  St.  Fire  Ins.  Co.  v.  Loud,  20  '>  Sutherland  i;.  Lake  Superior  Ship 
How.  (\.  Y.)  Tr.  95.  Canal  R.  &  I.  Co.  9  Nat.  Bank.  Ucg.  .307  ; 

2  Wall  St.  Fire  InH.  Co.  .;.  Loud,  supra.     Davis  v.  Gray,  16  Wall.  204,  217. 

«  Per  Williamson,  Chancellor,  in  Cor-  «  Bollcs  v.  Duft",  54  Barb.  (N.  Y.)  215  ; 
tieyeu  «.  Hathaway,  1 1  N.  J.  Ch.  39.  .37    How.    (N.    Y.)    Pr.   102;    Mdings   t;. 

*  Shotwdl   V.  Smith,  3  Edw.   (N.  Y.)     Bruen,  4  Sandf.  (N.  Y.)  Ch.  417. 


588. 


463 


§  1535.]  nil-   ArroiNTMENT  of  a  receiver. 

t^:i>X(>  lu'lonfiiiL;-  to  it  niav  bid  <'IV  the  jji-opin-ty  to  save  a  sacrifice 
of  it.  lie  succeeds  to  the  rijj^hts  and  powers  of  the  company  in 
this  respect.^ 

lie  shoiiUl  not  involve  the  estate  in  any  expense  without  the 
authority  of  the  court;  nor  without  siicli  sanction  bring  suits  or 
defend  them.-  He  shouhl  always  apply  to  the  court  before  exer- 
cisinij  unusual  discretion."' 

His  possession  is  the  possession  of  the  court,  and  without  its  au- 
thority no  one  can  directly  or  indirectly  interfere  with  the  })rop- 
erty.*  Like  a  trustee,  he  is  bound  to  exercise  such  care  over  the 
property  as  a  prudent  man  would  take  of  his  own.*^ 

A  receiver  who  acts  in  good  faith,  but  under  a  mistake  as  to 
the  extent  of  his  powers,  is  not,  it  would  seem,  liable  for  his  acts. 
But  if  he  wilfully  and  corruptly  exceeds  his  powers,  he  would  be 
liable  for  the  actual  damage  sustained  by  his  conduct.^  The  re- 
ceiver of  a  railroad  may  be  empowered  by  the  court  to  borrow 
money  to  complete  unfinished  portions  of  the  road,  to  issue  bonds, 
and  make  them  a  first  lien  upon  the  property  of  the  road.'^ 

A  receiver  cannot  be  sued  without  leave  of  the  court  which  ap- 
pointed him,  first  obtained.  That  court  has  jurisdiction  of  all 
matters  in  controversy  affecting  the  property  in  the  hands  of  the 
receiver,  and  may  draw  to  itself  all  controversies  to  which  the  re- 
ceiver can  be  made  a  party.  This  court  is  not  compelled  to  take 
jurisdiction  of  all  such  matters,  but  may  assert  its  right  to  do  so. 
Bv  acting  upon  the  parties  it  may  prevent  their  proceeding  in 
other  courts  against  the  receivers.  If  leave  be  not  obtained  upon 
motion  to  prosecute  an  independent  suit  at  law  or  in  equity 
against  a  receiver,  the  proper  mode  of  proceeding  is  to  apply  for 
the  appropriate  remedy  against  the  receiver  by  petition  in  the 
cause  in  which  the  receiver  was  appointed,  and  not  by  original  bill. 
Thus  a  bill  in  equity  does  not  lie  against  a  receiver  to  restrain 

1  Jacobs  V.  Turpin,  83  111.  424.  kenhead  Docks,  20  Beav.  353  ;  Noe  v.  Gib- 

2  Wynn  v.  Lord  ^cwborough,  3  Bro.  C.  son,  7  Paijje  (N.  Y.),  513  ;  Albany  City 
C.  87  ;  Wardi;.  Swift,  6  Ilare,  313  ;  Swaby     Bank  v.  Schermerhorn,  9  lb.  372. 

V.  Dickon,  5  Sim.  631  ;  Cowdrey  v.   Gal-  '^  Per  Lord  Eldon,  1  J.  &  W.  247  ;    1 

veston  K.  K.  Co.  93  U.  S.  352 ;  Ketchum  Fisher's  Law  of  Mort.  444. 

V.  TaciKc  K.  R.  Co.  3  Cent.  L.  J.  380.  *"  Stanlon  v.  Ala.  &  Chattanooga  R.  R. 

8  Parker  v.  Browning.  8  Paige  (N.  Y.),  Co.  2  Woods,  506,  518. 

888.  '  Kennedy  v.  St.  Paul  &  Pacific  R.  R. 

*  Russell  V.   East  Anglian  Ry.  Co.  3  Co.  2  Dill.  448. 
Mac.  &  G.  104;  Ames  v.  Trustees  of  Bir- 

464 


DUTIES   AND    POWERS    OF   A   RECEIVER.      [§§  1536,  1537. 

him  from  foreclosing  a  mortgage  by  sale  under  a  power  on  the 
ground  that  the  mortgage  was  obtained  by  fraudulent  represen- 
tations and  is  void,  but  relief  should  be  sought  by  petition.^ 

1536.  Receiver's  claim  to  the  rents.  —  By  the  appointment 
of  a  receiver  the  mortgagee  obtains  an  equitable  claim  not  only 
upon  the  rents  and  profits  actually  due  at  the  time,  but  also  upon 
the  rents  to  accrue  ;  and  his  right  to  them  is  superior  to  that  of 
the  mortgagor's  assignee  in  bankruptcy ,2  or  to  that  of  any  one 
else  claiming  under  the  mortgagor,  as,  for  instance,  his  grantee 
who  has  bought  subject  to  the  mortgage,  even  when  he  has  taken 
a  note  with  personal  security  for  the  rent.^  But  the  receiver  can- 
not call  upon  the  mortgagor,  or  a  junior  mortgagee,  to  refund 
rents  collected  before  the  appointment  of  the  receiver  ;  *  nor  is 
the  receiver  entitled  to  receive  such  rents. ^ 

The  tenants  of  the  premises  may  be  compelled  to  attorn  to  the 
receiver.^  So  also  a  purchaser  of  the  premises  from  the  mort- 
gagor may  be  directed  to  pay  to  the  receiver  an  occupation  rent.^ 
If  the  person  in  possession  refuses  to  attorn,  the  court  may  on  mo- 
tion pass  an  order  directing  him  to  do  so,  although  he  was  not 
made  a  party  to  the  suit  in  the  first  instance.^  If  he  disobeys 
the  order  of  court  he  may  be  proceeded  against  for  contempt.^ 
The  court  will  not  support  a  receiver  in  using  forcible  or  violent 
means  to  assert  his  rights. ^'^ 

1637.  Payment  discharges.  —  It  is  the  right  of  the  mort- 
gagor whose  property  has  been  placed  in  the  hands  of  a  receiver 
pending  a  suit  for  foreclosure  to  pay  the  debt  at  any  time,  and 
have  the  property  restored  to  his  possession.  This  right  does  not 
depend  upon  the  discretion  of  the  court,  but  is  one  which  he  can 
claim,  and  the  court  cannot  withhold  it.^^  Payment  destroys  the 
plaintiif's  cause  of  action  ;  and  though  in  general  the  receiver  is 
appointed  for  the  benefit  of  all  parties  interested,  when  upon  pay- 

1  Porter  v.  Kingman  (Mass.  1879),  ^  Astor  y.  Turner,  2  Hurh.  (N.  Y.)  444. 
Boston  Daily  L.  Keporter,  Feb.  20,  1879.  «  Ileid  v.  Middlcton,  1  Turn.  &  R.  445; 

2  Hayes  v.  Dicltinson,  9  Ilun  (N.  Y.),  Sea  Ins.  Co.  v.  Stebbins,  8  I'aigo  (N.  Y.), 
277  ;  Post  r.  Dorr,  4  Edw.  (N.  Y.)  Cli.412.  .565;    Parker  v.  Browning,  8  Pui^;e   (N. 

*  Lofsiiy  i;.  Maujcr,  3  Sandf.  (N.  Y.)  Y.),  388,  390;  Bowery  Sav.  JJk.  r.  Hich- 
Ch.  69.  ards,  3  llun  (N.  Y.),  36G. 

*  Howell  V.  Ripley,   10  Paige  (N.  Y.),         "  Ilensliaw  v.  Wells,  supra. 

43  ;  Post  t;.  Dorr,  4  Edw.  (N.  Y.)  412.  "^'  Parker  v.  Browning,  8  Paige  (N.  Y.), 

*  Noyes  v.  Rich,  52  Me.  115.  388. 

*  Henshaw  u.  Wells,  9  Humph.  (Tcnn.)  "  Milwaukee  &  Minn.  R.  H.  Co.  v. 
5ti8.  Soutter,  2  Wall.  510  ;  Woolwortii  C  C.  49. 

VOL.  II.  SO  405 


§  1537.]  TllK   AlM'OlNrMENT   OK   A    RKCKIVER. 

ment,  the  plaintitrs  right  of  action  is  ended,  the  rights  of  the 
other  parties  fall  with  it.^  Hut  while  the  plaintiff's  action  is  pend- 
ing, a  receiver  appointed  at  his  instance  will  not  generally  be  dis- 
charged on  his  application  without  the  concurrence  of  all  others 
interested  in  the  property .^ 

>  Diivis    V.    Duke     of     Marlborough,        2  Bainbrigge  v.  Blair,  3  Beav.  421. 
Swans.  168;   Pav"ter   i".  Carew,  18  Jur. 
417. 

466 


CHAPTER   XXXIV. 

DECREE  OF  STRICT   FORECLOSURE. 


L   Nature  and  use  of  this  remedy,  1538- 

1541. 
II.   In  what  states  it  is  used,  1542-1556. 


III.  Pleadings  and  practice,  1557-1568. 

IV.  Setting  aside  and  opening  the  fore- 

closure, 1569,  1570. 


1.  Nature  and   Use  of  this  Remedy. 

1538.  Historical.  —  In  the  progress  of  the  doctrine  of  mort- 
gages, the  first  advance  was  to  i-elieve  the  mortgagor  from  the 
forfeiture  of  his  estate  through  failure  to  perform  the  condition 
within  the  time  limited  by  the  deed.  "At  length,"  says  Spence, 
"  in  the  reign  of  Charles  I.,  it  was  established  that  in  all  cases 
of  mortgages,  when  the  money  was  actually  paid  or  tendered, 
though  after  the  day,  the  mortgage  should  be  considered  as  re- 
deemed in  equity  as  it  would  have  been  at  law  on  payment  before 
the  day  ;  and  from  that  time  bills  began  to  be  filed  by  mortgagees 
for  the  extinction  or  foreclosure  of  this  equity,  unless  payment 
were  made  by  a  short  day,  to  be  named."  ^  This  was  the  form 
of  foreclosure  first  adopted  by  courts  of  equity,  and  until  quite 
recent  times  was  the  only  form.  Although  this  form  of  fore- 
closare  has,  through  the  action  of  the  courts  and  by  statutory 
enactments,  gradually  given  way  within  the  last  hundred  years  to 
the  more  equitable  mode  of  foreclosure  by  sale,  it  is  still  used  by 
courts  of  equity  as  the  mode  best  adapted  to  a  few  special  cases, 
and  in  two  of  our  states  is  the  mode  in  general  use. 

This  is  the  foreclosure  spoken  of  in  the  books  ;  but  since  fore- 
closure, in  this  country  at  least,  has  come  to  moan  generally  a 
foreclosure  by  sale,  this  form,  by  which  the  absolute  ownership 
of  the  property  is  given  to  the  mortgagee  under  a  decree  of  court, 
has  of  late  come  to  be  designated  for  the  purpose  of  distinguish- 
ing it  a  strict  foreclosure. 

1539.  Nature  of  this  remedy.  —  A  strict  foreclosure  was  the 

1  Spence  Efj.  Juris.  603. 

467 


§§  lo40,  ir)41.]       DKCRliK   OF   SrUICT    FORECLOSURE. 

imtnnil  roinody  upon  a  mortgage,  when  it  was  regarded  as  a  con- 
ditit)nal  sale  of  the  hind  rather  than  as  a  mere  security  ;  for  the 
mortgagor  having  failed  to  perform  the  condition,  it  was  consist- 
ent with  this  doctrine  of  the  condition  that  the  courts  should, 
after  liaving  relieved  the  mortgagor  from  the  foi-feiture  of  his 
condition,  require^  hitu  to  perform  it  within  a  reasonable  time  or  be 
forever  barred  of  his  right  to  redeem.^  But  when  the  mortgage 
came  to  be  regarded  as  a  new  security  for  the  payment  of  the 
debt,  and  the  breach  of  the  condition  as  of  no  effect  beyond  giv- 
ing the  mortgage  creditor  the  right  to  resort  to  his  security,  the 
natural  remedy  for  the  breach  was  to  sell  the  property  secured 
and  apply  the  proceeds  to  the  payment  of  the  debt ;  as  in  this 
way  the  debtor  would  have  the  benefit  of  the  estate  when  this 
was  of  greater  value  than  the  debt,  and  the  mortgagee  would 
have  a  claim  for  the  deficiency  not  paid  by  the  proceeds  of  sale. 
The  advantages  of  a  sale  of  the  property  over  a  foreclosure  were 
discussed  in  the  earlier  cases,  before  the  practice  of  ordering  a 
sale  had  become  almost  universal  as  it  now  is,  except  in  special 
cases. 2 

1540.  Foreclosure  is  proper  in  the  case  of  a  mortgage  given 
for  the  entire  purchase  money,  when  the  value  of  the  premises 
is  not  more  than  the  mortgage  debt,  and  the  mortgagor  does  not 
appear  in  the  suit.^  It  is  proper  where  a  mortgagee  is  in  pos- 
session under  a  title  from  the  mortgagor,  for  the  purpose  of  cut- 
ting off  subsequent  liens  or  incumbrances,  as  in  case  one  has  pur- 
chased in  good  faith  at  a  mortgage  sale,  which  is  not  conclusive 
against  some  incumbrancer  not  made  a  party  to  the  suit,  and  the 
purchaser  has  gone  into  possession.*  It  is  proper,  too,  where  the 
mortgage  is  in  the  form  of  an  absolute  deed  without  any  written 
defeasance.''  In  these  cases  the  decree  of  strict  foreclosure  per- 
fects and  confirms  the  title. 

1541.  Land  contract.  —  A  judgment  of  strict  foreclosure  may 
properly  be  rendered  upon  a  land  contract  for  failure  of  the  ven- 

1  Per  Jones,  Chancellor,  in  Lansing  v.  v.  Ilaughey,  21  Minn.  101 ;    Mussina  v. 

Goclet,  9  Cow.  (N.  Y.)  .-352.  Bartlett,  8  Port.  (Ala.)  277. 

-  Per  Jones,  Chancellor,  in  Lansing  v.         ^  Wilson  v.  Geisler,  19  111.  49. 
Goelet,  supra  ;  j>cr  Kent,  Chancellor,  in         *  Kendall   v.   Treadweli,    14  How.  (N. 

Mills   V.   Dennis,    3   Johns.  (N.  Y.)  Ch.  Y.)  Pr.  1G5;  5  Abb.  Pr.  16;   Benedict  v. 

367  ;  perPeckham,  J.,  in  Bolies  v.  Duff,  43  Oilman,  4  Paige  (N.  Y.),  58. 
N.  Y.  469  ;  per  Bland,  Chancellor,  in  Wil-         ^  Hone  v.  Fisher,  2  Barb.  (N.  Y.)  Ch. 

liams's  case,  3  Bland  (Md.),  193;  Wilder  559. 

468 


IN   WHAT   STATES   IT  IS  USED.         [§§  1542-1544. 

dee  to  make  the  payments  stipulated  for.i  As  to  the  form  of 
the  decree,  it  shouM  be  that  the  money  due  on  the  contract  be 
paid  within  such  reasonable  time  as  the  court  shall  direct,  and 
that  in  case  of  failure  to  make  payment,  the  vendee  be  foreclosed 
of  his  equity  of  redemption. 

A  decree  of  sale  would  be  improper,  because  the  title  to  the 
premises  does  not  pass  by  the  contract,  but  remains  in  the  vendor. 
The  vendor  is  entitled  to  such  decree,  although  he  is  unable  to 
give  a  perfect  title  to  the  property,  unless  the  purchaser  offers  to 
rescind.  He  need  not  first  tender  a  deed.  If  the  purchaser  has 
not  tendered  the  purchase  money,  and  it  appears  that  he  would 
not  have  paid  it  if  a  tender  of  the  deed  had  been  made,  such 
tender  is  rendered  unnecessary .^ 

A  mortgagee  who  has  taken  possession  of  premises  mortgaged 
for  his  support,  on  account  of  a  breach  of  the  condition,  and  has 
for  several  years  supported  himself,  may  have  a  decree  to  quiet 
the  title.3 

2.  In  what  States  it  is  used. 

1542.  Alabama.  —  There  may  be  a  strict  foreclosure  where 
the  parties  have  themselves  agreed  to  this,  or  where  it  is  for  their 
interest ;  ^  and  it  is  a  proper  remedy  in  case  the  mortgagee  has 
obtained  a  release  of  the  equity  of  redemption,  which  is  worth 
nothing  above  the  debt,  in  order  to  cut  off  intermediate  incum- 
brancers ami  quiet  the  title.^ 

1543.  California.  —  There  may  be  a  strict  foreclosure  when 
the  circunistancfs  of  the  case  render  this  proper.^ 

1544.  Connecticut. —  A  strict  foreclosure  is  the  usual  form. 
As  will  be  seen  by  reference  to  the  statutes  no  other  form  is  pro- 
vided for."  When  foreclosure  is  made  by  an  executor,  adminis- 
trator, or  trustee,  the  premises  foreclosed,  or  the  avails  thereof, 
if  sold  by  him,  are  iield  by  him  for  the  benefit  of  the  same  per- 
sons as  the  money  secured  by  the  mortgage  wouhl  have  been  held 
if  collected  without  foreclosure  ;  and  in  case  the,  i)rtMnist'S  are  not 

1  §§  226-235;  Landon  v.  Burke,  36  *  Hunt  v.  Lewin,  4  St.  &  V.  (Ala.)  138. 
Wis.  378;  IJiitton  v.  Schroyer,  5  Wis.  ^  Hiuhcock  i'.  U.  S.  IJauk  of  IVnii.  7 
598  ;  Baker  v.   Bench,  l.-S  Wis.  99  ;  Kim-     Ala.  386. 

ball  V.  DarliriK.  32  Wis.  675  ;  Buswell  v.  '"'  Goodenow  v.  Ewer,  16  Cal.  461  ;  Mc- 

Peterson,  41  Wis.  82.  Millan  v.  Kicliards,  9  Cal.  365. 

2  Mclndoe  v.  Morman,  26  Wis.  588.  '  See  §  1326. 
«  Frizzle  v.  Dearth,  28  Vt.  787. 

469 


§§  1'>45-1551.]       DECREE   OF   STRICT    FORECLOSURE. 

sold,  they  aro  ilistribiitod  or  disposed  of  to   tlic  same  persons  as 
would  have  been  entitled  to  the  money  if  collected. ^ 

1545.  Illinois.  —  It  is  onl}'  in  rare  cases,  as  where  the  prop- 
erty is  of  less  value  than  the  debt  and  the  mortgagor  is  insolvent, 
and  the  mortgagee  is  willing  to  take  the  property  and  discharge 
the  debt,  that  a  strict  foreclosure  is  allowed.^  It  is  not  proper 
where  there  are  other  incumbrances  on  the  property,  or  creditors, 
or  ])urohasers  of  the  equity  of  redemption.'' 

When  the  mortgagor  has  deceased  and  his  estate  is  insolvent, 
the  case  is  assimilated  to  that  where  there  are  other  incumbrances 
upon  the  property ;  and  a  sale  should  be  directed  instead  of  a  strict 
foreclosure.* 

1546.  Iowa.  —  "  What  is  known  as  a  strict  foreclosure  has 
no  place  in  our  system  of  procedure."  ^ 

1547.  Kentucky.  —  Strict  foreclosures  were  formerly  decreed  ; 
but  now  the  Code  provides  that  there  shall  be  a  sale  in  all  cases.^ 

1548.  Minnesota.  —  The  court  has  power  to  decree  a  strict 
foreclosure,'^  and  by  a  recent  statute  this  power  is  expressly  con- 
ferred in  cases  where  such  remedy  is  just  and  appropriate ;  but 
no  final  decree  of  foreclosure  can  be  rendered  until  the  lapse  of 
one  year  after  a  judgment  fixing  the  amount  due.^  The  courts, 
however,  regard  a  sale  as  the  proper  remedy  in  almost  all  cases.^ 

1549.  Missouri.  —  Strict  foreclosure  is  not  allowed.^'' 

1550.  Nebraska.  —  Under  the  territorial  statutes  providing  for 
foreclosure  by  a  sale  of  the  premises,  it  was  held  that  the  court 
had  the  same  power  as  the  English  Chancery  Court  to  decree  a 
strict  foreclosure.^^  But  in  a  later  case,  and  under  different  stat- 
utes, it  was  held  that  a  strict  foreclosure  could  not  be  had  ;  that 
the  remedy  is  confined  to  a  sale  of  the  premises. ^^ 

1551.  New  York.  —  A  strict  foreclosure  is  rarely  pursued  or 
allowed,  except  in  cases  where  a  foreclosure  has  once  been  had, 

1  Gen.  Stat.  1875,  p.  359.  6  Gamut  v.  Gregg,  37  Iowa,  573. 

2  Sheldon   v.   Patterson,    55   111.   507;  «  Caufman   v.   Sayre,  2  B.  Men.  202; 
Horner     v.     Zimmerman,     45    III.    14;  Code,  1867,  §  404  ;  Code,  1876,  §  375. 
Stephens  v.  Bichnell,  27  III.  445;  Wilson  '  Heyward  v.  Judd,  4  Minn.  483. 

V.  Geisler,  19  111.  49 ;  Johnson  v.  Donnell,  »  Laws,  1870,  c.  58. 

15  111.  97.  9  Wilder  v.  Haughey,  21  Minn.  101. 

8  Farrcll  v.  Parlier,  50  111.  274  ;  Horner  ^^'  Davis  v.  Holmes,  55  Mo.  349. 

V.   Zimmerman,   45    111.    14;    Warner   v.  "  Wood  j;.  Shields,  1  Neb.  453. 

Helm,  6  111.  220.  i-  Kyger  v.  Rylcy,  2  Neb.  20. 

*  Boyer  v.  Boyer  (111.  1879),  8  Cent.  L. 
J.  217. 

470 


IN   WHAT    STATES   IT   IS   USED.         [§§  1552-1556. 

and  the  premises  sold  without  making  a  judgment  creditor,  or 
some  person  similarly  situated,  a  party  to  the  suit ;  in  which  case 
his  right  of  redemption  may  properly  be  barred  in  this  way.i 

1552.  North  Carolina.  — Foreclosure  was  formerly  made  with- 
out sale.  In  a  case  before  the  court  in  1837,^  Ruffin,  C.  J.,  said 
that  "  of  late  years  a  beneficial  practice  has  gained  favor,  until  it 
may  be  considered  established  in  this  country,  not  absolutely  to 
foreclose  in  any  case,  but  to  sell  the  mortgaged  premises  and  ap- 
ply the  proceeds  in  satisfaction  of  the  debt ;  if  the  former  exceed 
the  latter,  the  excess  is  paid  to  the  mortgagor  ;  if  it  fall  short, 
the  creditor  then  proceeds  at  law  on  his  bond  or  other  legal  se- 
curity to  recover  the  balance  of  the  debt."  It  was  then  the  prac- 
tice to  direct  a  sale  upon  the  application  of  either  party ;  but 
when  no  such  application  was  made  to  decree  a  foreclosure.^ 

1553.  Ohio.  —  The  rule  formerly  was  that  the  mortgagee  was 
entitled  to  foreclosure  instead  of  a  sale  when  two  thirds  of  the 
value  of  the  mortgaged  premises  did  not  exceed  the  debt.  Now 
a  sale  is  provided  for  in  all  cases.* 

1554.  Tennessee.  —  The  court  as  early  as  1805  refused  a 
prayer  that  the  property  might  be  vested  in  the  complainant,  but 
directed  a  sale,  according  to  the  provision  of  the  statute  relating 
to  sales  under  execution.^ 

1555.  Vermont.  —  By  reference  to  the  statutory  provisions  in 
respect  to  foreclosure,  it  will  be  seen  that  the  form  of  foreclosure 
in  equity  is  a  decree  of  strict  foreclosure  ;  although  there  may 
be  a  foreclosure  by  action  at  law  with  a  similar  result.^ 

1556.  Wisconsin.  —  Tliere  may  be  a  decree  of  strict'  fore- 
closure when  this  remedy  is  proper.^  Land  contracts  are  fore- 
closed in  this  manner.8  In  the  foreclosure  of  a  mortgage  condi- 
tioned to  support  the  mortgagee  and  to  pay  his  debts,  the  judg- 
ment should  be  in  the  nature  of  a  strict  foreclosure.^ 

1  Bolles  V.  Duff,  43  N.  Y.  469  ;  10  Abb.  *  Anon.  1  Ohio,  235  ;  Higgins  v.  West, 
Pr.  N.  S.  399,  414;    41    How.   Pr.  35.5;     5  Ohio,  554. 

Blanco  v.  Footc,  32   IJarb.  (N.  Y.)  535;  ^  Hold  v.  James,  1  Over.  (Tenn.)  201. 

Benedicts.  Oilman,  4  Paige  (N.  Y.),  58;  «  See  §   1361;  Paris  v.   Hulett,  26  Vt. 

Kendall  i;.  Trcadwell,  5  Abb.  (N.  Y.)  Pr.  308. 

16;  14  How.  Pr.  165.  '  Sage   v.  McLaughlin,  34    Wis.  550; 

2  Flfming  v.  Sitton,  1  l)cv.  &  Bat.  E<i.  Bean  v.  Whitcomb,  13  Wis.  431. 
621.  "  Landon  v.  Burke,  30  Wis.  378. 

*  Green  v.  Crockett,  2  Dcv.  &.  Bat.  Imj.  *  Brosnahan  v.  Brcsnnhnn  (Wis.  1879), 
300.  1  Wis.  I^eg.  N.  217. 

471 


§§  1557-1559.]       DECREB   OF   STRlCr    FORECLOSURE. 

3.  Pleadimjs  and  Practice. 

1557.  Until  the  whole  debt  becomes  due  a  conclusive 
fm-oelosure  of  the  whole  estate  mortgaged  will  not  be  decreed. 
Sometimes  the  mortgage  contains  an  express  stipulation  that  the 
whole  debt  shall  be  due  and  payable  upon  default  in  the  payment 
of  any  instalment  of  it  or  of  tlie  interest  secured.  Of  course  the 
whole  debt  in  such  case  being  demandable,  a  decree  of  irrevocable 
foreclosure  as  to  the  entire  debt  may  be  made.^ 

1558.  The  rule  as  to  parties  is  in  general  the  same  as  in  an 
action  for  the  ordinary  decree  of  sale.     All  persons  interested  in 
the  mortgage  or  in  the  property  ^  should  be  made  parties.     If  the 
rights  of  some  have  been  already  barred  by  a  previous   action   of 
foreclosure,  only  those  who  still  have  claims  against  the  property 
should  be  made  parties.^     The  owner  of  the  equity  of  redemp- 
tion is  a  necessary  party  defendant,  and  the  only  one  wholly  in- 
dispensable.    The  decree  operates  directly  npon  the  property,  and 
its  effect  is  to  restore  it,  upon  payment,  to  the  mortgagor  ;  or, 
upon  failure  of   payment,   to  vest  it  in  the  mortgagee:    unless, 
therefore,  the  mortgagor  or  his  assignee  be  before  the  court,  the 
decree  is  without  efficacy.*     If  subsequent  mortgagees  and  others 
interested  in  the  property  are  not  made  parties  they  are  not  con- 
cluded by  the   proceedings.     But  while  they  are  proper  parties 
they  are  not  necessary  parties.^     In  Connecticut,  where  a  strict 
foreclosure  is  the  mode  in   use,  it  is  held  that  the  bill  may  be 
maintained  without  making  any  subsequent  incumbrancers  par- 
ties.^    But  the  propriety  of  this  practice  has  been  called  in  ques- 
tion."    For  if  the  mortgagor  alone  be  made  a  party  when  there 
are  others  having  rights  in  the  equity  of  redemption,  the  fore- 
closure merely  extinguishes  his  right  of  redemption  ;  and  he  may, 
by  acquiring  the  right  of  a  subsequent  incumbrancer,  proceed  to 
redeem,  notwithstanding  the  foreclosure.^ 

1559.  In  a  bill  in  equity  for  a  strict  foreclosure  after  the 

1  Stanhope  v.  Manners,  2  Eden,  197;  *  Goodcnow  v.  Ewer,  16  Cal.  461. 
Leveridge  v.  Forty,    1    Maule  &  S.  706  ;  *  Brooks   v.   Vt.    Cent.   R.    R.   Co.  14. 
Caufman  v.  Sayrc,  2  B.  Mon.  (Ky.)  202.  Blatchf.  463,  472 ;  Weed  v.  Beebe,  21  Vt. 

2  Though  the  interest   be  only  that  of  495. 

an  attaching  creditor.     Lyon  ;;.  Sandford,  <>  Smith  v.  Chapman,  4  Conn.  346. 

5  Conn.  544      See  chapter  xxxi.  ^  Goodman  v.  White,  26  Conn.  320. 

3  Benedicts.  Oilman,  4  Paige  (N.  Y.),  ^  Goodman  v.  White,  supra. 
58. 

472 


PLEADINGS   AND   PRACTICE.  [§  1560. 

death  of  the  mortgagee,  his  heirs  at  law  are  necessary  parties. 
The  decree  in  such  case  vests  the  legal  title  to  the  premises  in 
the  heir  and  not  in  the  executor.^  This  is  the  rule  in  England, 
where  founierly  foreclosure  was  generally  without  sale.^  When 
the  bill  is  for  a  sale,  and  not  for  foreclosure,  the  heir  of  the  mort- 
gagee need  not  be  joined.  The  personal  representative  alone  may 
bring  it.^ 

1660.  The  pleadings  and  practice  are  substantially  the  same 
as  in  the  ordinary  action  ;  though  the  plaintiff  sometimes  offers 
in  his  complaint  to  take  the  mortgaged  premises  in  full  payment 
and  satisfaction  of  his  debt.^  It  is  not  infrequently  a  matter  of 
ao-reement  between  the  parties  before  the  suit  is  commenced,  that 
by  this  summary  process  the  mortgagee  shall  be  adjudged  the 
absolute  owner  of  the  property,  and  that  the  mortgagor  shall 
thereupon  be  freed  from  his  debt ;  and  in  such  case  the  bill  should 
be  drawn  with  reference  to  such  agreement  or  understanding.  In 
other  cases  in  which  there  is  no  such  agreement,  but  where  the 
property  is  about  equal  in  value  to  the  debt,  and  it  is  the  interest 
of  the  mortgagee  to  have  a  speedy  foreclosure  in  this  manner,  his 
offer  to  take  the  property  in  satisfaction  of  the  debt  would  gener- 
ally be  essential  in  preventing  opposition  to  this  form  of  foreclos- 
ure, and  should  therefore  be  set  fortli  in  the  bill. 

This  specific  remedy  should  be  prayed  for  in  the  bill ;  though 
if  in  the  progress  of  the  cause  the  facts  show  that  a  strict  fore- 
closure is  the  proper  remedy,  and  subject  to  no  objection,  a  de- 
cree might  be  entered  in  this  form  upon  a  bill  drawn  originally 

1  Osborne  v.  Tunis,  25  N.  J.  L.  (Dutch.)  the  hands  of  the  heir,  so  far  at  least  as  to 

6.33.      "  True,"    says   the   Chief  Justice,  satisfy  the  mortgage  debt,  but  the  fore- 

"  while  the  mortgage  retains  its  character  closure  fixes  the  title  in  the  heir.     And 

of  a   pledge,  of  a  mere  security  for  the  the  reason  assigned  in  the  books  why  the 

debt,  it  may  be  assigned  by  the  executor,  heir  of  the  mortgagee  should  be  made  a 

It  will  pass  by  an  assignment  of  the  bond  party  to  a  bill  filed  by  the  executor  to  re- 

as  a  mere  incident  of  the  mortgage  debt,  deem  or  be  foreclosed  is,  that  otherwise,  if 

It  is  regarded  as  a  chattel  interest.     But  the  mortgagor  should  redeem,  there  would 

when  the  right  to  redeem  is  foreclosed,  its  be  no  one  before  the  court  from  whon>  a 

character  as  a  pledge  ceases,  and  the  title  conveyance   of    the   legal    estate   can    bo 

to  the  land  mortgaged  vests  absolutely,  by  taken." 

force  of  the  conveyance,  in  the  mortgagee,  ^  1  Fisher's  Mortg.  §  1061. 

while  liviug,  or  in  his  heir  at  law,  if  he  bo  "  See  chapter  xxxi. 

dead.     The  title  relates  no  longer  to  the  *  For   a  form  of  complaint    proper   in 

money,  but  to  the  land.     Equity  will  per-  this  action,  see  Kendall    v.   Treailwell,  .5 

mit  the  executor   to  follow  the  land  into  Abb.  (N.  Y.)  Pr.  16;  14  IIow.  I'r.  105. 

473 


§§  1561-1563.]      DECREE   OF   STRICT   FORECLOSURE. 

for  a  foroelosuro  sale  ;  and  although  a  strict  foreclosure  bo  prayed 
for  the  court  may  decree  a  sale.^ 

1661.  The  judgment  in  a  strict  foreclosure  bars  the  defendants 
of  all  right  and  title  and  equity  of  redemption,  unless  they  re- 
deem or  pay  the  mortgage  within  a  day  certain  therein  fixed,  and 
usually  six  months  from  the  date  of  the  judgment.^  It  is  there- 
fore interlocutory,  and  makes  provision  applicable  in  case  of  a  fail- 
ure to  redeem.  When  a  day  is  appointed  upon  which  redemption 
is  to  be  made,  the  plaintiff  should  attend  at  the  time  and  place 
fixed  to  receive  tlie  amount  and  release  the  property. 

1562.  Delivery  of  possession.^  —  Upon  failure  of  the  defend- 
ant to  pay  the  amount  due  within  the  time  stipulated,  it  seems 
that  application  should  be  made  to  the  court,  founded  upon  proof 
of  a  demand  and  refusal  to  pay  the  amount  adjudged  to  be  paid, 
for  the  issuing  of  a  process  in  the  nature  of  a  writ  of  assistance, 
to  put  the  plaintiff  into  possession.* 

Under  the  English  practice,  however,  upon  a  decree  of  strict 
foreclosure  the  court  does  not  order  a  delivery  of  possession  of  the 
premises  to  the  complainant,  but  leaves  him  to  his  legal  remedy 
by  ejectment.^  The  complainant  has  the  legal  title,  and  the  court 
only  declares  that  the  equity  of  redemption  is  foreclosed.  The 
delivery  of  possession  is  not  necessary  to  give  effect  to  the  decree 
of  court,  as  it  is  in  case  of  a  sale.  If  the  mortgagee  be  in  posses- 
sion, the  decree  may  properly  direct  him  to  vacate  and  release  the 
premises  on  payment  to  him  of  the  sum  found  due.^ 

1563.  On  a  strict  foreclosure  the  time  allowed  for  redemp- 
tion before  the  foreclosure  becomes  absolute  is  within  the  discre- 
tion of  the  court.  Six  months  was  the  usual  time  formerly  al- 
lowed ;  but  the  time  is  a  matter  within  the  discretion  of  the  court, 
having  in  view  the  circumstances  of  the  case.^ 

1  Sage  V.  McLaughlin,  34  Wis.  550.  ^  lu  Connecticut  provision  is  made  by 

2  Farrell  v.  Parlier,  50  111.  274.     For  a     statute   for  delivery  of   possession.      See 
form  of  judgment  where  there  were  con-     §  1326. 

flicting  eriuiiies,  see  Kendall  v.  Trcadwell,  ■*  Lundon  v.  Burke,  36  Wis.  378  ;  Bus- 

14  How.  (N.  Y.)  Pr.  165  ;  5  Abb.  Pr.  16.  well  v.  Peterson,  41  Wis.  82. 

For  decree   against    two   defendants,   of  '  Sutton  u.  Stone,  2  Atk.  101  ;  Seaton's 

whom  one  stands  in  relation  of  surety  to  Decrees,  140. 

theother,  see  Waters  f.  Hubbard,  44  Conn.  <>  Kendall  v.  Treadwell,  5  Abb.  (N.  Y.) 

340.     See  Sage  v.  Cent.  K.  K.  Co.  of  Iowa,  Pr.  16  ;  14  How.  Pr.  165. 

13  West.  Jur.  218.    Whether  a  second  de-  ^  McKinstry  v.  Mervin,  3  .Johns.  (N.  Y.) 

cree  after  a  decree  nisi  is  necessary,  sec  Ch.  466,  note;  Perine  v.  Dunn,  4  lb.  140; 
Mulvey  v.  Gibbons,  87  111.  367. 
474 


PLEADINGS   AND   PRACTICE.  [§§  1564-1566. 

In  Vermont  the  time  is  by  statute  made  one  year  ;  ^  and  under 
the  chancery  practice  it  was  before  the  statute  a  year  and  a 
week.2  The  time  may  be  enlarged  and  usually  is  on  application, 
but  a  satisfactory  reason  for  it  must  be  shown. ^ 

When  a  sale  is  decreed  instead  of  a  foreclosure,  it  is  not  the 
practice  ordinarily  to  fix  a  day  for  payment  in  failure  of  which 
the  sale  shall  take  place,*  though  this  course  has  sometimes  been 
taken.  The  reason  for  enlarging  the  time  of  redeeming  does  not 
apply  in  case  a  sale  is  ordered  according  to  the  usual  practice  ;  for 
the  mortgagor  in  the  case  of  a  sale  is  supposed  to  receive  the  full 
value  of  the  property  by  the  payment  of  the  debt  and  receipt  of 
the  surplus,  and,  therefore,  applications  for  the  postponement  of 
sales  are  not  ordinarily  allowed. 

1564.  When  a  strict  foreclosure  is  had  against  an  infant 
heir  of  the  mortgagor,  he  is  usually  entitled  to  a  day  in  court 
after  he  comes  of  age.  The  former  practice  was  to  allow  him  six 
months  after  coming  of  age,  not  to  go  into  the  accounts  or  to  re- 
deem, but  to  show  error  in  the  decree.  A  decree  of  sale,  how- 
ever, is  binding  upon  the  infant.^ 

1565.  As  already  noticed  a  time  for  redemption  is  always 
allowed  in  a  decree  for  a  strict  foi-eclosure.  A  decree  which  does 
riot  find  the  amount  due,  which  also  allows  no  time  for  the  pay- 
ment of  the  debt  and  the  redemption  of  the  estate,  and  which 
is  final  and  conclusive  in  the  first  instance,  unless  authorized  by 
statute,  cannot  be  sustained.  Although  the  usual  time  of  re- 
demption allowed  is  six  months,  yet  it  is  really  within  the  discre- 
tion of  the  court  as  to  the  length  of  it ;  but  the  discretion  does 
not  extend  to  withholding  it  entirely.** 

1666.  A  foreclosure  in  equity  may  result  from  the  dismissal 
of  a  bill  to  redeem.  In  New  York  it  is  held  that  after  the  mort- 
gagor's failure  to  pay  within  the  time  limited,  a  final  order  that 
the  bill  be  dismissed  should  be  obtained,  and  that  until  this   is 

Harking  r.  Forsyth,  11  I^i^,'h  (Va.),  294;  ♦  Mussina   v.   Bartlctt,  8   Port.    (Ala.) 

Bamea  v.  Lee,  1  Bibb  (Ky.),  526.  288. 

>  See  §  1381.  6  Mills  v.  Dennis,  3  Joluis.  (N.  Y.)  Ch. 

2  Lan>,'don  v.  Stiles,  2  Aik.  (Vt.)  1H4.  367. 

'  Monkhouse  v.  Corporation  of  Bedford,  "^  Clark  v.  Reyburn,  8  Wall.  318  ;  John- 

17Ves.  3^0;  lienvoize  v.  (loopcr,  1   Sim.  sou    v.    Donncll,    l.")    111.   97;    Bianco   i;. 

&  Stu.  365  ;  Quarles  i;.  Knight,  8  Price,  Foote,  32  Barb.  (N.  Y.)  535. 
630  ;     Downing    v.    Palinatcer,    1     Mon. 
(Ky.)  66. 

475 


§§  15l)7,  1508.]       DKCREK   OF   STRICT    FORECLOSURK. 

done  iio  title  passes  to  the  niortga<^ee,^  In  Massaclmsetts  it  is 
held  that  even  without  a  formal  order  of  dismissal,  a  mortgage  is 
foreclosed  upon  the  mortgagee's  obtaining  a  judgment  for  costs 
after  the  mortgagor  has  failed  to  pay  the  amount  found  due  in 
his  suit  for  redemption  within  the  time  ordered.  The  judgment 
for  costs  substantially  terminates  the  suit  upon  its  merits.^ 

1567.  The  efifect  of  a  strict  foreclosure  is  not  to  extinguish 
the  debt,  unless  the  premises  are  of  suflicient  value  to  pay  it. 
"When  this  is  sufficient  the  debt  is  satisfied.  The  value  of  the 
property  may  be  ascertained  in  a  suit  at  law  upon  the  mortgage 
debt  to  recover  the  difference.^  Sometimes,  by  agreement  of  the 
parties  or  by  the  offer  of  the  plaintiff,  the  decree  transferring  the 
absolute  title  to  him  is  expressly  taken  in  full  satisfaction  of  the 
debt,  and  the  decree  should  then  so  provide.*  A  debt  not  in- 
cluded in  the  decree  is  not  satisfied  by  the  foreclosure  ;  and  it 
may  be  shown  by  parol  whether  a  particular  debt  was  included  in 
the  decree.^  But  the  decree  does  not  operate  to  satisfy  the  debt, 
or  any  part  of  it,  until  it  has  become  absolute  by  the  expiration 
of  the  time  limited  in  it  within  which  the  mortgagor  may  pay  the 
debt  and  redeem  the  estate.^ 

There  is  no  judgment  for  a  deficiency  in  this  form  of  foreclos- 
ure." The  statutes  providing  for  such  a  judgment  relate  wholly 
to  foreclosures  by  sale.  Very  frequently  the  plaintiff  releases  the 
mortgagor  from  personal  liability.  He  can  enforce  it  only  by  suit 
at  law. 

1568.  Costs.  —  Ordinarily  costs  will  be  allowed  as  upon  a  de- 
cree for  sale.  If,  however,  as  is  common  where  this  form  of  fore- 
closure is  used  only  in  special  cases,  and  the  mortgagee  has  pro- 

1  See  §  1108;  Wood  v.  Surr,  19  Bcnv.  have  been  the  value  of  the  property.  Derby 
5.51;  Hansard  v.  Hardy,  18  Ves.  460;  Bank  v.  Landon,  3  Conn.  63;  Swift  v. 
Bollea  V.  Duff,  43  N.  Y.  469;  Beach  v.  Edson,  .5  Conn.  154;  McEwen  v.  Welle.o, 
Cooke,  28  N.  Y.  535;  Ferine  v.  Dunn,  4  1  Root  (Conn.),  203;  Fitch  v.  Coit,  1 
Johns.  (N.  Y.)  Ch.  140.  Root  (Conn.),  266.     In  Vermont  the  de- 

2  Stevens  v.  Miner,  110  Mass.  57.  cree,  whether  upon  a  bill  in  chancery  or  in 
'  See  §  950;    Edgerton  v.  Young,  43     an  action  of  ejectment,  after  tlie  expira- 

m.  470;  Vansant  v.  Allman,  23  111.  30;  tion  of  the  time  of  redemption,  operates 

Spencer  v.  Harford,  4  Wend.  (N.  Y.)  381  ;  as  satisfaction   in  whole  or  pro  tanto   as 

Morgan  v.  Plumb,  9  Wend.  (N.  Y.)  287;  the  case  may  be.     Paris  v.  Hulett,  26  Vt. 

De  Grant  v.  Grahan,  1  N.  Y.  Leg.  Obs.  75 ;  308. 

Bassett  v.   Mason,   18   Conn.   136;  New         *  5  Wait's  Prac.  248,  249. 
Haven  Pipe  Co.  v.  Work,  44   Conn.  230.         ^  Goddard  v.  Selden,  7  Conn.  520. 
In  Connecticut  prior  to  1833, 'the  foreclos-         •>  Peck's  Appeal,  31  Conn.  216. 
ure  extinguished  the  debt,  whatever  may        '  Bean  v.  Whitcomb,  13  Wis.  431. 

476 


SETTING  ASIDE   AND   OPENING   THE   FORECLOSURE.      [§  1569. 

posed  to  take  the  property  and  discharge  the  debt,  no  costs  are 
allowed.  In  all  cases  the  court  has  discretionary  power  in  this 
matter.  When  a  purchaser  at  a  foreclosure  sale  brings  a  bill  for  a 
strict  foreclosure  against  a  prior  judgment  creditor  who  was  not  a 
party  to  the  former  foreclosure  suit,  if  he  wishes  to  redeem  he 
must  pay  the  costs  of  suit,  but  not  the  costs  of  the  suit  on  which 
the  sale  was  made.^ 

4.  Setting  aside  and  opening  the  Foreclosure. 

1569.  A  strict  foreclosure  may  be  set  aside  for  many  of  the 
same  causes  for  which  a  foreclosure  sale  is  set  aside. ^  As 
the  effect  of  the  decree  is  to  vest  an  absolute  title  in  the  holder 
of  the  mortgage,  so  long  as  he  retains  the  title  he  stands  very 
much  in  the  same  relation  to  the  property  and  to  the  mortgagor 
as  does  a  mortgagee  who  has  bought  the  property  at  a  foreclosure 
sale,  and  against  whom  the  court  would  more  readily  set  aside  the 
foreclosure  sale  than  against  a  stranger  who  had  in  good  faith 
made  the  purchase.^  After  the  foreclosure  the  relations  of  the 
parties  are  also  very  much  the  same  as  they  would  be  if  the  mort- 
gage had  been  foreclosed  by  entry  and  possession  in  the  manner 
in  use  in  Massachusetts  ;  and  the  foreclosure  will  be  waived  or 
opened  by  the  subsequent  dealings  of  the  parties  between  them- 
selves in  the  same  manner :  *  as,  for  instance,  by  the  payment  of 
part  of  the  amount  due  ;  ^  by  their  treating  the  debt  as  still  due  ;  ^ 
or  by  their  agreeing  in  any  way  that  the  foreclosure  shall  have  no 
effect." 

The  opening  of  a  decree  of  foreclosure  does  not  depend  upon 
the  inquiry  whether  the  proceedings  in  the  case  were  I'egalar,  but 
may  depend  wholly  upon  equitable  considerations  in  any  way 
affecting  the  rights  of  parties.®  Where  the  failure  of  the  mort- 
gagor to  pay  according  to  the  decree  was  not  through  his  own 
negligence,  hut  in  consequence  of  propositions  for  settlement  and 
payment  which  were  to  be  carried  into  effect  after  the  time  of 
payment  had  expired,  and  the  failure  to  perform  this  was  on  the 

'  Benedict  v.  Oilman,  4  I'liige  (N.  Y.),  ''  Converse  i^.  Cook,  8  Vt.  Kit;  Smalley 

58;  Vroom  v.  Dittniis,  4  I'aigo  (N.  Y.),  v.  Ilickok,  12  Vt.  15;j. 

52G.  6  Bisscll  V.  Bozmon,  2  Dev.  Iv].  (N.  C) 

2  Scc§§  1668-1681.  1.54. 

*  See  §  1671.  '  fJriswold  i;.  Mntlicr,  ."i  Coini.  4.15. 

*  See  §§  1265-1276.  "  Bridgeport  Savings  Bunk  v.  Kldredge, 

28  Conn.  550. 

477 


§  loOO.]  DKCREE   OF   STRICT    FOUFCLOSURE. 

part  of  the  mortgagee,  the  decree  of  foreclosure  was  opened.^ 
The  mortgagee's  promise  to  give  the  mortgagor  further  time  for 
redemption  after  the  expiration  of  the  decree  does  not  entitle  the 
mortgagor  to  claim  that  the  decree  be  opened,  if  he  has  made  no 
offer  to  perform  his  part  of  the  agreement.^  A  promise  by  the 
holder  of  a  mortgage  or  decree  of  foreclosure  to  allow  a  redemp- 
tion after  the  expiration  of  the  decree  is  equally  binding  upon 
one  who  purchases  the  decree  with  knowledge  of  such  promise.^ 
A  decree  was  opened  after  the  expiration  of  the  time  limited  for 
redemption,  for  the  reason  that  the  mortgagor,  having  paid  part 
of  the  debt,  fell  sick  on  a  journey  undertaken  for  the  purpose  of 
obtaining  the  balance  of  the  money,  and  was  unable  to  get  back 
until  ten  days  after  the  time  limited,  when  he  tendered  the 
amount.*  It  was  opened,  also,  in  a  case  where  the  mortgagor 
supposed  he  had  made  a  valid  tender  within  the  time  limited, 
though  by  informality  it  was  not  good.^ 

If  the  mortgagor  against  whom  a  decree  of  foreclosure  has  been 
entered  limiting  the  time  of  redemption  to  a  particular  day  is 
prevented  from  paying  the  debt  and  redeeming,  by  the  happening 
of  an  unforeseen  event  over  which  he  had  no  control,  a  court  of 
equity  will  open  the  foreclosure.  This  was  done  in  a  case  where 
the  foreclosure  was  to  become  absolute  on  the  fifth  day  of  August. 
The  property  was  worth  more  than  eight  thousand  dollars,  and 
was  nearly  all  the  mortgagor  had,  and  the  debt  was  less  than  four 
thousand  dollars.  The  mortgagor  had  relied  upon  receiving  the 
money  from  an  uncle  who  had  ample  means,  and  had  promised  to 
furnish  it  on  the  third  day  of  August,  but  unexpectedly  failed  to 
do  so.  On  the  evening  of  the  fifth  day  of  August  the  mortgagor 
procured  a  person  who  had  the  necessary  amount  in  United 
States  bonds,  but  not  in  money,  to  go  to  the  mortgagee's  house 
that  evening.  This  person  finding  that  the  mortgagee  had  gone 
to  bed,  sent  him  word  by  his  wife  that  he  had  come  to  redeem 
the  mortgaged  property;  to  which  the  mortgagee  replied  that  he 
was  sick  —  and  so  nothing  further  was  done.  The  mortgagor  was 
allowed  to  redeem.^ 


1  Pierson  u.  Clayes,  15  Vt.  93.  ''Crane    v.   Hanks,   1    Root    (Conn.), 

2  Blodgett  V.  Hobart,  18  Vt.  414.  468. 

3  Woodward  v.  Cowdery,  41  Vt.  496.  '  Bostwick  v.  Stiles,  35  Conn.  195. 
*  Doty  i;.  Whittlesey,  1  Root  (Conn.), 

310. 

478 


SETTING   ASIDE   AND    OPENING   THE    FORECLOSURE.       [§  1570. 

If  the  mortgagee,  after  a  decree  of  foreclosure  and  before  the 
expiration  of  the  time  limited  for  redemption,  says  to  the  mort- 
gagor that  he  may  pay  the  debt  after  the  time  limited,  and  that 
no  advantage  should  be  taken  of  the  decree,  and  the  mortgagor  in 
consequence  allows  the  time  to  expire  without  paying  the  debt, 
the  foreclosure  will  be  opened.  The  mortgagor  is  also  entitled 
to  equitable  relief  if  the  decree  has  been  obtained  by  fraud,  or  if 
after  it  is  obtained  he  is  deceived  in  relation  to  the  time  limited 
for  redemption,  and  he  consequently  fails  to  redeem ;  ^  or  if  no 
service  of  the  summons  was  made  upon  him,  and  he  had  no  actual 
knowledge  of  the  pendency  of  the  suit  until  after  the  time  of  re- 
demption had  expired,  though  the  decree  found  that  service  had 
been  made.^ 

Where  the  parties  to  a  foreclosure  suit  agreed  upon  a  time  for 
redemption  to  be  limited  by  the  decree,  but  by  mistake  the  time 
was  not  inserted  in  the  decree,  the  mortgagor  at  the  end  of  three 
years  after  the  time  so  limited  by  agreement  was  not  allowed  to 
open  the  foreclosure  and  redeem.  The  mortgagor  could  equitably 
ask  for  nothing  more  than  the  correction  of  the  mistake,  and  this 
would  avail  him  nothing.-^  This  relief  may  be  had  on  an  ordi- 
nary bill  to  redeem,  taking  no  notice  of  the  decree  of  foreclosure.* 

1570.  In  any  case  where  proper  service  has  not  been  made 
on  a  defendant,  the  foreclosure  will  be  opened  or  he  will  be 
allowed  on  application  to  have  the  judgment  set  aside  and  to 
appear  in  the  suit.^  In  his  application  for  such  relief  he  must 
tender  payment  of  the  mortgage  debt  or  show  his  readiness  to  do 
80.®  Where  notice  of  a  bill  for  foreclosure  was  ordered  by  the 
court  to  be  given  by  mailing  an  attested  copy  of  the  bill  to  the 
parties  interested  in  the  property,  and  a  subsequent  mortgagee 
did  not  receive  the  notice,  and  had  no  knowledge  of  the  suit  until 
after  a  decree  had  been  passed  and  the  time  limited  for  redemp- 
tion had  expired,  the  foreclosure  was  opened  and  further  time  for 
redemption  allowed.^ 

>  Weiss  V.  Ailing,  34  Conn.  f.O.  5  Fall  v.  Evans,  20  Ind.  210;  Mitchell 

2  Kridgci>ort  Sav.   Bk.  v.   Kldredge,  28  t;.  Gray,  18  Ind.  123. 

Conn.  561.  o  Hatch  v.  Garza,  7  Texas,  60. 

•  Colwell  V.  Warner,  36  Conn.  224.  '  Bank  of  North  America  i;.   Norwich 

*  Bridgefwrt  Savings  Bank  v.  Eldredge,  Savings  Society,  37  Conn.  444. 
28  Conn.  556. 

479 


CHAPTER   XXXV. 


DECREE   OF   SALE. 


I.  A   substitute   for  foreclosure,  1571- 

1573. 
II.  The  form  and  requisites  of  the  de- 
cree, 1574-1586. 


III.  The    conclusiveness    of    the  decree, 

1587-1589. 

IV.  The  amount   of    the    decree,    1590- 

1601. 
V.  Costs,  1602-1607. 


1.  A  Substitute  for  Foreclosure. 

1571.  Generally. —  As  already  noticed,  the  earliest  remedy 
sought  in  chancery  in  the  foreclosure  of  mortgages  was  a  decree 
wholly  cutting  off  the  debtor's  right  to  redeem,  and  vesting  the 
estate  absolutely  in  the  mortgagee.  This  procedure,  when  the 
property  exceeded  in  value  the  debt,  sometimes  operated  harshly 
upon  the  debtor.  It  operated  unjustly  to  the  creditor  as  well 
when  the  property  was  insufficient  to  pay  the  debt,  because  no 
convenient  remedy  was  afforded  him  to  collect  the  deficiency.  A 
more  equitable  system  was  early  adopted  by  the  courts  in  this 
country,  under  which  the  property  was  sold  for  the  benefit  of  the 
parties  interested,  and  the  proceeds  applied  first  to  the  payment 
of  the  mortgage  debt,  and  the  surplus,  if  any,  paid  to  the  debtor 
or  his  assigns.  If  a  balance  of  the  debt  remained  unpaid  after 
applying  the  proceeds  of  the  property,  an  action  at  law  might 
be  had  against  the  debtor  to  recover. 

Now,  in  many  states  under  the  new  codes  of  civil  practice  the 
formal  distinction  between  suits  in  equity  and  suits  at  law  has 
been  done  away  with,  and  thougii  foreclosure  i-emains  of  course 
an  equitable  procedure,  provision  is  made  for  a  decree  or  judg- 
ment in  this  proceeding,  not  only  for  a  sale  of  the  property,  but 
also  for  a  recovery  of  any  balance  of  the  debt  remaining  after  the 
sale,  thus  avoiding  the  necessity  of  a  separate  action  at  law. 

1572.  In  England  the  usual  practice  formerly  was  to  decree 
a  strict  foreclosure,  though  the  Court  of  Chancery  had  the  power 

480 


A   SUBSTITUTE   FOR   FORECLOSURE.  [§  1572. 

without  the  aid  of  any  statute  to  order  a  sale  of  the  property.^ 
Now  it  is  provided  by  the  Chancery  Improvement  Act,'^  that  upon 
the  request  of  the  mortgagee,  or  of  any  subsequent  incumbrancer, 
or  of  the  mortgagor,  or  of  any  person  claiming  under  them  re- 
spectively, the  court  may,  instead  of  a  foreclosure,  direct  a  sale  of 
the  property  upon  such  terms  as  it  may  deem  proper.  The  con- 
sent of  the  mortgagee  or  those  claiming  under  him  is  requisite  to 
a  sale,  when  the  request  for  it  is  made  by  any  other  person,  unless 
the  party  making  the  request  deposits  a  reasonable  sum  of  money 
for.  the  purpose  of  securing  the  performance  of  such  terms  as  the 
^court  may  impose  upon  him.^  Under  this  statute  the  parties  have 
no  absolute  right  to  require  a  sale,  but  the  court  has  power  in  its 
discretion  to  grant  it ;  and  this  is  now  the  usual  course.  A  sale 
may  be  directed  against  the  wish  of  the  mortgagor.*  Where  the 
security  has  been  scanty,  it  has  always  been  deemed  proper  to 
direct  a  sale  ;  ^  as  also  when  the  property  was  unproductive.^ 

An  equitable  mortgagee  by  deposit  of  title  deeds  is  entitled  to 
a  decree  of  foreclosure  instead  of  sale.^  The  usual  practice  in 
granting  a  sale  of  the  property  was  to  give  a  limited  time,  vary- 
ing from  one  month,^  to  six  months,^  within  which  the  mort- 
gagor might  redeem  before  the  sale.  Sometimes,  however,  an 
immediate  sale  was  ordered,  as  where  the  property  was  unpro- 
ductive,^'' or  where  for  any  reason  this  seemed  to  be  for  the  ben- 
efit of  all  the  parties. ^^ 

It  was  also  the  practice,  in  case  the  equity  of  redemption  be- 
longed to  an  infant  heir  or  devisee,  to  direct  a  sale  with  the 
consent  of  the  mortgagee,  because  a  sale  would  bind  the  infant, 
but  he  would  be  entitled  to  a  day  after  coming  of  age  to  show 
cause  against  a  decree  of  foreclosure.^^ 

But  in  this  country  a  sale,  with  rare  exception,  being  made 

1  2  Story's  Eq.  §§  1024-1026.  In  Ireland  ^  James  v.  James,  Law  Rep.  16  Eq.  153. 
the  decree  is  always  for  a  sale.  Hutton  v.  ^  Smith  v.  Robinson,  1  Sm.  &  Giff.  140; 
Mayne,  .3  Jo.  &  Lat.  .586.  Staines  v.  Rudlin,  16  Jtir.  90.5. 

2  15  &  16  Vict.  c.  86,  §  48.  »  Bellamy  v.  Cockle,  18  Jur.  465  ;  Dan- 
'  The  deposit  must  he  sufficient  to  cover     iell  Ch.  p.  1 152. 

an  unsuccessful  attempt  to  sell.     Bellamy  "  Foster  v.  Harvey,  11  Weekly  R.  8M. 

V.  Cockle,  18  Jur.  465.  "   Hewitt  v.  Nanson,  28  I>.  J.  (Ch.)  49. 

*  Newman  r.   Selfe,  .3.3  Beav.  522  ;  and  ''^  Fisher's  Mortf;.  pp.  526, 1018  ;  Schole- 

see  Woodford  i;.  BrookiuR,  Law  Rep.   17  field    v.    Heafield,    7    Sim.    667;   Davis  v. 

Eq.  425.  Dowdinj,',  2  Keen,  245  ;  Booth  c.  Rich,  1 

'  Dashwood  r.  Bithazey,  Mos.  196.  Vern.  295. 

0  How  r.  Vigures,  1  Ch.  R.  18. 

VOL.  II.                                 31  481 


§  l.")?;'..]  DECRKK   OF   SALE. 

in  all  c;ises,  the  only  inqniry  wliero  infants  are  concerned  is, 
whetlu'r  a  sale  of  the  whole  or  of  a  part  of  the  premises  will  be 
most  for  the  infant's  benefit,  and  a  reference  should  be  made  to 
ascertain  this  fact,  and  what  part  shall  be  sold  if  less  than  the 
whoK'.' 

1573.  Independently  of  all  statutory  provisions,  a  court  of 
equity  has  jurisdiction  to  order  a  sale  and  provide  for  carry- 
ing it  out,'-  although  in  most  of  the  states  where  foreclosure  is  ef- 
fected by  a  judicial  sale  there  are  statutes  providing  for  this,  and 
regulating  it. 

No  sale  can  be  made  without  a  decree  of  court  for  that  purpose^ 
first  obtained.^  Although  the  practice  of  foreclosure  and  sale  of 
the  mortgaged  property  in  equity  is  traced  to  the  civil  law,^ 
where  the  remedy  was  generally  by  a  proceeding  m  rem  for  a 
sale  of  the  property,  yet  under  that  law  it  was  not  indispensable 
that  the  mortgagee  should  obtain  a  judicial  decree  for  such  sale; 
the  mortgagee  might  also  by  his  own  act,  after  giving  a  certain 
prescribed  notice  to  the  debtor,  sell  the  property  and  reimburse 
himself  from  the  proceeds  of  the  sale.^  If  the  debtor  could  not 
be  found  so  as  to  serve  the  notice  upon  him,  an  order  of  court  was 
necessary.  This  riglit  to  sell  was  not  confined  to-  cases  where  the 
parties  had  expressly  provided  for  it,  but  might  be  exercised  as 
well  when  the  mortgage  itself  was  silent  upon  the  matter.^  But 
under  the  common  law  practice,  the  mortgagee  is  never  allowed 
to  sell  by  his  own  voluntary  act  without  a  judicial  decree,  except 
when  a  power  of  sale  is  expressly  given  him,  and  even  when  hav- 
ing such  special  authority  in  some  states  by  statute,  a  decree  for 
the  sale  must  first  be  obtained,  and  the  sale  thus  becomes  a  ju- 
dicial sale  rather  than  a  sale  under  the  power. 

1  Mills  V.  Dennis,  3  Johns.  (N.  Y.)  Ch.  erty  prevailed  under  the  colonial  govern- 
367.  inent. 

2  Lansing  v.  Goelet,  9  Cow.  352,  where  »  Hart  v.  Ten  Eyck,  2  Johns.  (N.  Y.)  Ch. 
Chancellor  Jones  in  an  elaborate  opinion  100.  "  There  was  never  an  instance,"  says 
justifies  the  practice  of  courts  of  equity  in  Chancellor  Kent,  "  where  a  creditor  hold- 
ordering  sales;  Mills  v.  Dennis,  3  Johns,  iug  land  in  pledge  was  allowed  to  sell  at 
Ch.  367  ;  Williams's  case,  3  Bland  (Md.),  his  own  will  and  pleasure." 

193  ;  Belloc  v.  Rogers,  9  Cal.  123  ;  Green  *  Story's  Eq.  Juris.  §§  1008,  1011. 

V.  Crockett,  2  Dev.  &  B.  Eq.  393.  <>  Story's  Eq.  Juris.  §§  1008,  1024. 

The  earliest  statute  in  New  York  recog-  »  Story's   Eq.   Juris.    §    1008.     "Even 

nizing  a  foreclosure  sale  is  that  of  April  an   agreement   between    them,    that  there 

3,  1801.     Laws  of  N.  Y.(  Webster  &  Skin-  should  be  no  .sale  was  so  far  invalid,  that 

ner's  ed.)  443  ;  though  it  is  said  that  the  a  decretal  order  of  sale  might  be  obtained 

practice  of  selling  the  mortgaged  prop-  upon  the  application  of  the  creditor." 

482 


THE   FORM   AND   REQUISITES    OF   THE   DECREE.       [§§  1574,  1575. 


2.   The  Form  and  Requisites  of  the  Decree. 

1574.  In  general.  —  The  decree  for  the  sale  of  the  premises 
should  contain  a  description  of  the  property  to  be  sold,  a  state- 
ment of  the  amount  of  the  debt,  a  direction  that  the  premises, 
or  so  much  of  them  as  may  be  necessary,  shall  be  sold  by  an  offi- 
cer designated,  who  shall  execute  a  deed  to  the  purchaser,  and 
that  out  of  the  proceeds  of  the  sale  he  pay  to  the  plaintiff  the 
amount  of  his  debt,  interest,  and  costs,  together  with  the  expenses 
of  the  sale.  It  is  usual  to  provide  that  the  plaintiff  may  purchase 
at  the  sale  ;  and  that  the  purchaser  shall  be  let  into  possession 
on  the  production  of  the  deed.  If  a  personal  judgment  is  asked 
for  and  is  proper,  the  defendants,  who  are  personally  liable  for 
tiie  debt,  must  be  designated.^ 

If  redemption  is  allowed  after  sale,  this  right  should  be  pro- 
vided for  in  the  decree,  although  it  will  not  be  considered  as  de- 
nied if  not  provided  for.^ 

1575.  The  decree  and  order  of  sale  may  properly  follow  the 
terms  of  the  mortgage,  when  this  upon  its  face  appears  to  convey 
the  entire  estate,  and  the  officer  must  sell  accordingly ;  but  the 
purchaser  will  take  only  the  interest  the  mortgagor  had  in  the 
premises,  and  it  is  no  ground  for  reversal  that  the  mortgagor  had 
only  an  equitable  interest.'^  If  the  mortgagor  had  no  title  to  a 
portion  of  the  premises  embraced  in  the  mortgage,  this  portion 
may  properly  be  omitted  from  the  order  of  sale.'*  When  the 
terms  of  the  mortgage  are  followed  in  the  direction  of  sale,  and 
the  sheriff  or  referee  sells  a  less  estate  than  that  expressed  in  the 
mortgage,  as,  for  instance,  a  leasehold  estate  when  the  mortgage 
erroneously  described  an  estate  in  fee,  the  sale  transfers  all  the 
title  the  mortgagor  had  in  the  premises,  and  it  does  not  lie  with 
the  mortgagor,  nor  with  a  ])ur(;iiaser  who  has  full  knowledge  of 
the  facts,  to  object.''' 

It  is  usual  to  embody  in  the  order  of  sale  a  full  description  of 
the  property  to  be  sold,  with  the  particular  boundaries  of  it,  so  far 
at  least  as  they  can  bo  ascertained  from  the  mortgage.  But  this 
is  not  essential.      The  decree  of  sale,  instead  of    describing    the 

>   Ivcviston    V.    Swnn,   33    Cal.   480;     5         ''  Jones  r.  Lupham,  15  Kiuis.  540. 
Wail')*  I'rac.  218.  *  Castro  v.  lilies,  22  Tex.  479.     ■ 

'   IJoeslcr  V.  Byrne,  72  III.  460.  ''  (iralinm  v.  IJlcakic,  2  Duly  (N.  Y.),  5:>. 

4853 


§§  15TG,  1577.]  DKCHKi':  of  salk. 

mortgagoil  proj)ortY  Jvt  liMiglli,  iniiy  direct  a  salo  of  the  premises  as 
tk'scribeil  in  the  coinphiiiKnit's  bill  ;  and  if  the  premises  are  [)r()p- 
erly  described  in  the  bill  or  in  the  mortgage,  and  this  is  made  part 
of  the  bill  as  an  exhibit,  no  formal  description  is  necessary  in  the 
decree.^  If  the  original  mortgage  contains  in  the  description  of 
the  premises  a  latent  ambiguity  which  renders  it  uncertain  what 
are  the  boundaries,  the  court  may  by  its  judgment  fix  the  bound- 
aries of  the  land  with  reference  to  the  foreclosure  sale.^ 

1576.  Order  of  sale.  —  If  i)ortions  of  the  premises  have  been 
sold  subsequent  to  the  mortgage,  the  decree  should  provide  that 
the  portion  still  owned  by  the  mortgagor,  or  the  person  equitably 
bound  to  pay  the  debt,  shall  be  first  sold,  and  then  the  portions 
previously  alienated  in  the  inverse  order  of  their  alienation. ^  If 
a  party  to  the  suit  desires  to  have  the  premises  sold  in  a  particular 
order,  he  should  see  that  the  decree  so  provides  ;  or  after  the  entry 
of  the  decree  he  may  move  for  an  order  to  the  referee  directing 
the  manner  in  which  the  premises  are  to  be  sold.*  In  order  to  as- 
certain the  respective  equities  of  different  owners  the  court  may 
order  a  reference.^  If  the  owner  of  the  land  makes  no  request 
as  to  the  order  in  which  several  tracts  of  land  included  in  the 
mortgage  shall  be  sold,  he  cannot  uj^on  appeal  object  to  a  decree 
of  court  definitely  fixing  the  order  of  sale.^ 

1577.  "Where  only  part  of  the  debt  or  an  instalment  of  in- 
terest is  due,  and  the  premises  can  be  sold  in  parcels,  the  decree 
should  be  for  the  absolute  sale  of  so  much  as  will  raise  the  amount 
actually  due.'  If  the  premises  cannot  be  sold  in  parcels,  the 
judgment  should  direct  the  sale  of  the  whole,  and  the  payment  to 
the  plaintiff  of  the  amount  actually  due,  and  that  the  surplus  be 
brought  into  court  to  await  further  order.^  In  such  case  it  should 
appear  of  record  that  the  court  had  first  inquired  whether  the  land 

1  Logan  1-.  Williams,  76  111.  175.  «   Bard  v.  Steele,  3   How.   (N.  Y.)  Pr. 

2  Doe  V.  Viilkjo,  29  Cal.  385.  110;   N.  Y.  Life  Ins.  &  Trust  Co.  v.  Cut- 

3  N.  Y.  Life  Ins.  &.  Trust  Co.  v.  Mil-  ler,  3  Sandf.  (N.  Y.)  Ch.  176. 
nor,  1  Barb.  (N.  Y.)  Ch.  353  ;  Knicker-  6  i>rice  y.  Lauve,  49  Tex.  74. 
backers.  Et,'gle8ton,  3  Ilow.  (N.  Y.)  Pr.  ''  James  v.  Fisk,  17  Miss.  144;  Roe  v. 
130  ;  Rathbone  v.  Clark,  9  Paige  (N.  Y.),  Nicholson,  13  Wis.  373  ;  Hunt  v.  Dohrs, 
648;  Worth  t'.  Hill,  14  Wis.  559;  Wis-  39  Cal.  304;  Harris  v.  Makepeace,  13 
consin  v.  Titus,  17  Wis.  241  ;  Ogden  i'.  Ind.  560;  Denny  v.  Graeter,  20  Ind.  20; 
Glidden,  9  Wis.  46;  Warren  v.  Foreman,  Beiiuchanip  v.  Lcagan,  14  Ind.  401.  See 
19  Wis.  35  ;    Cheever  v.   Fair,  5  Cal.  337.  §§  1478,  1700. 

*   Vandercook   v.   Cohoes   Sav.  Inst.  5         "*    Walker  v.  Jarvis,  16  Wis.  28. 
Hun  (N.  Y.),  641. 

484 


THE    FORM    AND   REQUISITES    OF   THE   DECREE.  [§  1577. 

could  be  sold  in  parcels.^  A  decree  directing  a  sale  "  according 
to  law"  has  been  held, sufficient,  although  a  statute  required  the 
court  to  direct  a  sale  of  the  premises,  "  or  so  much  thereof  as  is 
necessary."  ^  When  part  of  the  mortgaged  property  has  been 
sold  for  the  payment  of  one  instalment,  a  further  decree  of  sale 
may  be  had  for  an  instalment  subsequently  falling  due.^  Al- 
though the  suit  was  commenced  when  only  a  part  of  the  debt  or 
one  instalment  of  it  was  due,  if  the  whole  debt  becomes  due  be- 
fore the  decree  is  entered,  this  should  be  in  the  ordinary  form 
for  a  sale  of  the  property  to  satisfy  the  whole  debt.* 

Where  a  decree  directs  a  sale  subject  to  the  mortgage  for  the 
part  of  the  debt  not  due,  and  the  officer  announces  that  the  sale 
will  be  made  in  this  manner,  his  failure  to  state  this  fact  in  his 
certificate  of  purchase  and  in  his  report  of  the  sale,  and  the  omis- 
sion of  this  fact  in  the  confirmation  of  the  sale,  do  not  affect  or 
modify  the  original  decree  or  release  the  lien  reserved  for  the  un- 
foreclosed  part  of  the  debt.  Under  a  decree  for  a  sale  subject 
to  a  lien  specified,  parol  testimony  is  admissible  to  show  that  the 
property  was  offered  for  sale  subject  to  such  lien.^ 

A  foreclosure  for  an  instalment  due  before  the  principal  amount, 
and  a  sale  of  the  entire  property,  pass  the  interest  of  both  mort- 
gagor and  mortgagee  in  the  property,  and  a  clear  title  to  the  pur- 
chaser.^ The  court  may  order  payment  of  the  instalment  due  ; 
but  if  the  property  be  indivisible  so  that  a  larger  amount  is  re- 
ceived than  is  needed  for  that  purpose,  the  court  may  retain  cus- 
tody of  the  surplus  and  jurisdiction  of  the  case  until  the  whole 
debt  falls  due." 

The  power  to  foreclose  and  sell  for  the  principal  sum  secured 
by  a  mortgage,  on  account  of  the  non-payment  of  an  instalment 
due,  or  of  interest  accrued,  or  taxes,  exists  when  it  is  stipulated 
in  the  mortgage  that  in  case  of  such  non-payment  the  mortgagee 
may  sell  the  premises  and  pay  the  debt  from  tiie  proceeds.^ 

1   Cubbcrly  u.  Wine,  13  Ind.  353  ;  Wain-  "  Poweshiek  Co.  v.  Denuison,  3G  Iowa, 

scott  V.  Silvers,  lb.   497  ;  Stewart  i;.  Net-  244  ;  Grattan  v.  Wi<jf;iii.s,  23  Cal.  16. 

tlelon,  13  Wis.  465.  '   McDowell   v.   Lloy.l,   22   Iowa,  448; 

■^  Treiber  v.   Shaffer,  18    Iowa,  29,  and  Clark  v.  Abbott,  1  iVladd.  Ch.  474;  Mus- 

8CC  Kirby  v.  Cbilds,  10  Kans.  039.  sina  v.  Bartlett,  8  Port.  (Ala.)  284  ;  Smal- 

8  McDoiigul  ".  Downcj,  45  Cal.  165.  ley  v.  Martin,  1  Clarke  (N.  Y.),  293  ;  Ad- 

♦  Smalicy  v.  Martin,   1  Clarke  (N.  Y.),  ains  v.  lOssex,  l  Bibb  (Ky.),   149. 

293;  Manning  v.  McClur^',  14  Wis.  350.  »   Pope   v.  Durant,  26  Iowa,  233;    Kra- 

*  McCart  v.  Frisliy,  81  111.  188.  mer  v.  Rebman,  9  Iowa,  114. 

480 


§§  l.")7S,  1")7!>.]  Di:cnKK  of  sale. 

1578.  The  deci-ee  should  not  attempt  to  give  any  relief  not 
sought  for  in  the  pleadings;^  it"  it  does  it  will  be  vacated  on 
motion.-  But  sometimes  under  the  general  prayer  for  relief,  the 
court  may  grant  relief  not  specifically  asked  for.  Thus,  where  a 
railroad  mortgage  contained  a  provision  that  in  case  of  a  fore- 
closure sale  the  holders  of  a  majority  of  the  bonds  secured  by  the 
mortgage  should  in  writing  request  the  trustee  to  purchase  the 
premises  for  the  use  and  benefit  of  the  bondholders,  he  should  be 
authorized  to  do  so,  and  the  deed  of  trust  was  made  a  part  of  the 
bill,  it  was  held  to  be  proper  to  grant  the  relief  specifically  which 
the  ]irovisions  of  the  deed  of  trust  contemplated.^ 

1579.  It  should  not  attempt  to  interfere  with  the  rights 
of  any  who  are  interested  in  the  property,  but  are  not  made 
parties  to  the  suit ;  and  it  is  ineffectual  so  far  as  it  does  this.^  It 
should  protect  the  rights  of  a  defendant  whose  title  to  a  part  of 
the  premises  is  paramount,  although  he  could  not  be  dispossessed 
of  such  part  under  the  decree  even  if  no  reservation  is  made  in 
respect  to  it.°  Only  the  rights  and  interests  possessed  by  the 
mortgagor  at  the  date  of  the  mortgage  can  be  sold.  A  judgment 
which  forecloses  a  prior  mortgage  is  irregular  and  may  be  opened 
on  motion  of  the  prior  mortgagee.^  The  rights  of  subsequent 
mortgagees  who  are  made  parties  to  the  suit  are  generally  suffi- 
ciently protected  by  the  general  direction  in  the  decree  for  the 
payment  of  the  surplus  money  into  court,  and  by  the  subsequent 
proceedings  for  its  distribution  ;  though  the  practice  in  some  courts 
has  been  to  determine  the  rights  of  junior  mortgagees  in  the  first 
place,  and  direct  the  payment  of  the  surplus  towards  the  satis- 
faction of  them.' 

But  the  rights  of  subsequent  incumbrancers  may  be  protected 
by  the  court  in  the  sale  of  the  property  where  a  portion  of  it  is 
sufficient  to  .satisfy  the  mortgage,  by  ordering  the  sale  of  enough 
so  that  the  other  incumbrancers  may  be  paid.^     And  where  after 

1  Knowles  I'.  Kablin,  20  Iowa,  101.  &  Wicke   v.  Lake,   21    Wis.   410;    San 

2  Simonson  v.  Blake,  12  Abb.  (N.  Y.)  Francisco  v.  Lawton,  21  Cal.  589;  Ellas 
Pr.  331  ;    20  How.  Pr.  484.  v.  Verdugo,  27   Cal.  418. 

8  Sage  i;.  Cent.  R.  R.  Co.  of  Iowa  (U.  "  McReynolds  v.  Munns,  2  Kcyes,  214. 
S.  Supreme  Ct.),  13  West.  Jur.  218.  "^  Union  Water   Co.  v.  Murphy's  Flat 

*  Watson  V.   Spence,  20  Wend.  (N.  Y.)     Pluming  Co.  22  Cal.  620. 
260  ;   Montgomery  v.  Tutt,  11  Cal.  307  ■         •*  Livingston  v.  Mildrum,  19   N.  Y.  440. 
and  see  Totten  i;.  Stuyvesant,  3  Edw.  (N. 
Y.)  500. 

486 


THE  FORM   AND   REQUISITES   OF   THE  DECREE.      [§§  1580,  1581. 

the  decease  of  the  mortgagor  it  appeared  to  be  for  the  benefit  of 
his  children  that  the  entire  mortgaged  premises  should  be  sold, 
though  the  mortgage  might  have  been  satisfied  by  a  sale  of  a  part, 
the  court  ordered  the  sale  of  the  whole.^ 

1580.  "When  a  junior  mortgagee  forecloses  his  mortgage  by- 
bill  in  equity,  in  case  the  prior  mortgage  is  not  yet  due,  he  may 
have  a  decree  for  a  sale  of  the  equity  of  redemption  subject  to  the 
prior  mortgage,  leaving  the  purchaser  to  pay  that  when  it  be- 
comes due.  If  the  prior  mortgage  be  due,  the  junior  mortgagee 
may  redeem  and  sell  the  whole  estate  to  obtain  the  redemption 
money  as  well  as  his  own  claim.^  It  has  been  held  in  a  few  cases 
that  without  redeeming  he  may  make  the  prior  mortgagee  a  party 
to  the  bill,  and  ask  for  a  sale  of  the  whole  estate,  and  the  pay- 
ment of  all  incumbrances  out  of  the  proceeds  ;  ^  but  this  is  not 
the  law  now.  Though  the  prior  mortgagee  be  made  a  party  and 
is  defaulted,  the  decree  only  bars  the  equity  of  redemption  of  the 
complainant's  mortgage,  without  affecting  in  any  way  that  which 
is  superior  to  it.*  A  junior  mortgagee  is  entitled  to  proceed  with 
his  bill  to  foreclose,  although  the  senior  mortgagee  has  obtained 
a  judgment  of  foreclosure,  and  the  junior  mortgagee  may  seek 
his  remedy  against  the  surplus  moneys  on  the  first  mortgage.^ 
He  is  entitled  to  have  the  issues  raised  in  his  action  tried  when  it 
is  reached. 

1581.  After-acquired  title.  —  Ordinarily  the  title  ordered  to 
be  sold  is  only  that  which  the  mortgagor  held  at  the  date  of  the 
mortgage.  If  in  any  case  there  are  facts  of  an  equitable  char- 
acter, such  that  a  title  acquired  afterwards  by  the  mortgagor  or 
his  vendee  should  be  subjected  to  the  lien  of  the  mortgage,  tliese 
should  be  set  out  in  the  complaint,  and  such  after-acquired  title 
should  be  included  in  the  decree  of  sale,  otherwise  this  will  not 
include  or  aff(K;t  the  after-acquired  title.^  It  must  be  first  sub- 
jected to  the  lieu  of  the  mortgage  by  the  foreclosure  decree,  which 

1  Brevoort  y.  Jackson,  1    Edw.   (N.  Y.)  *  McCormick   «;.    Wilcox,   25    III.   274; 

447.  Harshuw  v.  McKesson,  66  N.  C.  266. 

*  Western  Ins.  Co.  v.  Kaglc  Fire  Ins.  '  Daily  v.   Kingon,   41    How.   (N.   Y.) 

Co.  1  I'ni(,'c  (N.  Y.),284  ;  and  see  Trayscr  I'r.  22. 

u.  Trustees  of  Indiana  Asbury  UniverHJty,  "  Kreiclibaum    v.   Melton,   4'.»   Cnl.   50. 

ao  Ind.  556.  See  §§  679-683. 

"  Vnnderkomji  y.  Slielton,  11   Paige  (N. 
Y.),  28. 

487 


§§  ir)82-ir)85.]  DECRl-K    OF   SALK. 

th(Mi  oporatos  uptni  this  title  to  the  same  extent  as  if  it  had  been 
iiu'hideil  ill  tlie  morttraire.^ 

1682.  When  several  persons  have  acquired  undivided  in- 
terests ill  the  himl  subsequent  to  the  mortgage  as  co-tenants,  the 
decree  will  not  aj)i)ortion  the  debt  among  them.'^ 

1583.  If  the  complainant  holds  two  mortgages  covering  in 
part  the  same  premises,  but  securing  dilTerent  debts,  one  decree 
will  be  made  for  both  debts  instead  of  a  separate  decree  for  each  ;  ^ 
but  if  a  subsequent  purchaser  or  mortgagee  has  become  interested 
in  the  property  covered  by  one  and  not  by  the  other,  separate 
decrees  should  properly  be  made.* 

1584.  Death  of  mortgagor.  — A  judgment  for  foreclosure  and 
sale  without  any  provision  as  to  a  deficiency  may  be  executed,  not- 
withstanding the  death  of  the  mortgagor.  It  is  to  be  enforced 
against  the  property  and  not  against  the  person.  There  is  no  oc- 
casion to  revive  it  or  to  bring  in  new  parties.^  The  sale  can  be 
made  and  the  purchaser  let  into  possession  on  producing  the  deed 
of  the  referee  or  other  officer  making  the  sale.^  So  far  as  this 
part  of  the  decree  is  concerned  it  is  in  the  nature  of  a  proceeding 
in  rem^  and  the  death  of  the  mortgagor  after  the  entry  of  the 
decree  is  no  gi-ound  for  staying  its  execution." 

The  statutes  which  provide  that  no  suits  shall  be  brought 
against  the  estate  of  a  deceased  person  for  a  year,  or  other  speci- 
fied time,  after  administration  is  taken  upon  his  estate,  do  not 
suspend  the  right  to  prosecute  a  suit  for  foreclosure,  when  no 
judgment  for  a  deficiency  is  sought.^  The  mortgagee  may  prove 
his  claim  and  have  it  allowed  against  the  estate  of  the  mortgagor, 
and  still  proceed  directly  to  foreclose.^ 

1585.  Death  of  plaintiff.  —  Neither  does  the  death  of  the 
plaintiff  after  judgment  and  before  the  sale  give  occasion  to  stay 
the  sale  or  to  revive  the  action.^"     Where,  however,  the  plaintiff 

1  San  Francisco  v.  Lawton,  18  Cal.  465.         ^  Lynde  v.  O'Donncll,  12  Abb.  (N.  Y.) 

2  Perre  v.  Castro,  14  Cal.  519.  Pr.  286. 

*  Phelps  V.  Ellsworth,  3  Day  (Conn.),         "^  Nagle  v.  Macy,  9  Cal.  426.    See  Hunt 
397.  V.  Acre,  28  Ala.  580. 

*  Enright  v.  Hubbard,  34  Conn.  197.  »  Willis  v.  Farley,  24  Cal.  491. 

8  Hays  u.  Thomae,56N.  Y.  521;  Hard-        »  Moores   v.  Ellsworth,  22  Iowa,    299. 
son  V.  Simons,  3  Edw.  Ch.  394  ;  Cowell  v.      Contra,  Falkner  i;.  Folsom,  6  Cal.  412. 
Buckelew,  14  Cal.  640.  ^'>  Lynde  v.  O'Donnell,  21  How.  (N.  Y.) 


Pr.  34;  12  Abb.  Pr.  286. 


488 


THE    FORM    AND   REQUISITES   OF    THE   DECREE.         [§  1586. 

dies  before  judgment,  this  cannot  be  perfected  in  his  name,  but 
his  representatives  miist  be  substituted  in  his  phice.^ 

1586.  A  day  for  redemption  before  the  sale  was  formerly 
allowed  by  some  courts  by  virtue  of  their  equity  jurisdiction.^ 
The  mortgagor  cannot  object  to  a  decree  giving  him  tliis  right, 
although  it  be  unauthorized  by  law.^  A  time  for  redemption 
after  the  sale  is  in  some  states  provided  for,  and  in  such  case  the 
decree  must  not  direct  the  dehvery  of  the  deed  until  this  time 
has  passed.^  As  regards  redemption,  the  decree  should  make 
the  same  provisions  for  it  whether  the  mortgage  be  in  the  usual 
form,  or  be  merely  an  absolute  deed  without  a  formal  defeasance, 
or  any  defeasance  at  all.^  Where  redemption  is  allowed  after 
sale,  the  officer  is  directed  in  the  first  place  to  execute  a  certificate 
to  the  purchaser,  and  in  case  there  is  no  redemption  within  the 
time  allowed  by  law  to  execute  a  deed.^  In  the  mean  time  the 
mortgagor  remains  in  possession,  with  no  liability  for  rents  and 
profits,  or  for  use  and  occupation." 

In  the  absence  of  special  provisions  of  statute,  courts  of  equity 
may  allow  a  period  for  redemption  before  a  sale  of  the  property, 
according  to  the  circumstances  of  the  case.  This  is  always  done 
in  cases  of  strict  foreclosure  where  the  decree  vests  the  complete 
title  in  the  mortgagee.^  The  practice  does  not  generally  apply  to 
cases  of  decrees  for  the  sale  of  the  pi'operty,  because  the  debtor 
is  then  protected  by  his  right  to  receive  the  surplus  arising  from 
the  sale  ;  but  it  has  been  extended  by  some  courts  to  such  cases.^ 
As  will  be  seen  by  reference  to  the  statutes  regulating  foreclos- 
ure, it  is  in  several  states  provided  that  there  shall  be  a  period 
of  redemption  after  the  sale,  during  which  time  the  purchaser 
holds  only  a  certificate  of  the  sale  entitling  him  to  a  deed  at  the 
close  of  the  period  if  no  redemption  is  made.  In  such  case  a  de- 
cree that  the  sherilf  shall  execute  a  deed  to  the  purchaser  without 

1  Gerry  i>.  Post,  13  How.(N.  Y.)  Pr.  118.  v.  Jarvis,   15   Wis.  571  ;    Wnlkor  v.  Jar- 

2  This  was  the  practice  in  Kentucky,  vis,  16  Wis.  28.  A  clirictioti  to  execute 
Durrett  v.  Wliitiri};,  7  T.  B.  Mon.  547;  "  i\  certilicatc  as  required  l)y  Inw  "  is  suf- 
Wooilard  v.  Fitz|>atrick,  2    B.    Mon.  61  ;  licient. 

liichardson  v.  Parrott,  7  lb.  379.  ^   Whitney  v.  Allen,  21  Cal.  2.33. 

»  Smith  V.  Hoyt,  14  Wis.  252.  "  Perino  i;.  Dunn,  4  Johns.  (N.  V.)  Cii. 

*  Jones  r.  Oilman,  14  Wis.  450  ;  Rhine-     140. 

hart  u.  StevenHon,  23  III.  524.  "  Ilarkins  v.  Forsytli,  11   Leigii  (Va.), 

*  Briggs  V.  Seymour,  17  Wis.  255.  294  ;  Stockton  v.  Dundee  Manuf.  Co.  22 
'  Boestcr  v.  Byrne,  72  111.  466  ;  Uosseel     N.  J.  Ecj.  56. 

489 


§§  1587,  1588.]  DKCRKE   OF    SALK. 

waiting  for  the  expiration  of  the  time  limited  for  redemption  is 
erroneous,  but  may  he  amended.^ 

8.    The  Cvnclnsircni'ss  of  the  Decree. 

1587.  The  validity  of  the  decree  cannot  be  attacked  col- 
laterally for  mere  irregularities  which  do  not  go  to  the  jurisdic- 
tion;''^ and  jurisdiction  is  presumed  from  the  decree.^  Though 
the  decree  be  erroneous,  the  title  of  one  who  has  in  good  faith 
purchased  under  it  is  not  affected  by  the  error  ;  and  this  is  so 
even  thouirh  the  decree  should  afterwards  be  reversed  or  set  aside 
for  error  or  irregularity.* 

If  the  mortgage  was  invalid  in  its  origin,  a  decree  of  foreclos- 
ure has  no  effect  whatever  upon  the  property  or  its  owners.  Such 
was  the  case  of  a  mortgage  given  by  persons  who  claimed  to  be 
the  trustees  of  a  corporation  and  foreclosed ;  and  afterwards  it 
was  established  by  decree  of  the  court  that  the  mortgagors  had 
usurped  the  powers  of  the  corporation,  and  had  no  authority  to 
bind  it." 

A  decree  of  foreclosure  entered  before  the  debt  has  become  due, 
or  after  the  mortgage  has  been  satisfied  of  record,  is  erroneous ; 
and  the  decree  should  be  set  aside,  unless  in  the  latter  case  the 
entry  of  satisfaction  be  cancelled.'' 

1588.  A  judgment  directing  a  sale  of  the  mortgaged  prem- 
ises is  conclusive  as  to  all  parties  to  the  suit  so  long  as  it 
remains  unreversed.^  It  does  not  matter  that  the  plaintiff  held 
the  mortgage  by  assignment  from  the  mortgagor  as  collateral  se- 
curity for  a  debt  of  his,  and  that  he  in  this  way  had  an  interest 
in  the  mortgage ;  if  the  plaintiff,  knowing  this,  makes  him  a 
party  to  the  suit,  and  he  does  not  answer,  he  cannot,  after  a  judg- 
ment and  sale  of  the  property  under  it  for  a  sum  less  than  the  debt 
for  which  the  mortgage  was  held  as  collateral,  maintain  a  bill 
to  redeem.     The  interest  of  the  mortgagor  is  not  one  prior  to  the 

1  Harlan  v.  Smith,  6  Cal.  173.  Graham  v.  Bleakie,  2  Daly  (N.  Y.),  55  ; 

2  Torrans    v.    Hicks,    .32    Mich.    307  ;  Burford  v.  Rosenfield,  37  Tex.  42. 
Ogden   V.    Walters,   12  Kans.  282;  Rey-  '  Brindcrnaglc    v.    German  Reformed 
nolds  V.   Harris,    U  Cal.  667  ;    Miller  v.  Church,  1  Barb.  Ch.  15. 

Sharp,  49  Cal.  233.  «  Russell  v.  Mixer,  39  Cal.  504. 

»  Markel  t'.  Evans,  47  Ind.  326  ;  Keller  "^  McCrackan  v.  Valentine,  9  N.  Y.  42; 

V.  Miller,  17  Ind.  206.  Manigault   v.   Deas,  Bailey  (S.    C.)    Eq. 

*  Horner    v.   Zimmerman,   43   111.   14;  284;  Murrell  i>.  Smith,  51  Ala.  301. 

490 


THE   CONCLUSIVENESS   OF   THE   DECREE.  [§  1589. 

mortgage,  but  one   under  the  mortgage,  and   this  is  the  ground 
upon  which  he  is  made  a  party  to  the  foreclosure  suit.^ 

1589.  Prior  and  adverse  rights.  —  Where  a  party  has  a  right 
under  the  mortgage,  and  also  a  right  prior  to  it,  he  is  not  pre- 
cluded in  respect  to  the  prior  right  by  a  judgment  of  foreclosui-e, 
though  the  terms  of  it  are  broad  enough  to  cover  both  rights. 
Only  the  rights  and  interests  under  the  mortgage  and  subsequent 
to  it  can  properly  be  litigated  upon  a  bill  of  foreclosure.^  One 
claiming  adversely  to  the  title  of  the  mortgagor  cannot  be  made  a 
party  to  the  suit  for  the  purpose  of  trying  his  adverse  claim.  If 
he  has  a  claim  under  the  mortgage  also,  his  claim  prior  to  it  can- 
not be  divested  by  the  decree.  This  prior  claim  is  not  a  subject 
matter  of  litigation  in  the  foreclosure  suit,  and  remains  unaffected 
by  it.  The  decree  is  final  only  within  the  proper  scope  of  the  suit, 
which  is  to  bar  interests  in  the  equity  of  redemption.^  Therefore, 
where  land  was  devised  to  one  in  trust  to  receive  the  rents  and 
profits,  and  apply  to  the  benefit  of  another  for  life,  remainder  to 
the  trustee  in  fee  for  his  own  benefit,  and  the  remainder-man  and 
the  tenant  for  life  made  a  mortgage  in  which  no  allusion  was 
made  to  the  trust,  it  was  held,  upon  a  foreclosure  of  the  mortgage, 
that  the  trust  estate  was  not  affected  by  the  mortgage,  or  by  the 
judgment  of  foreclosure,  although  the  person  named  as  trustee  was 
in  his  individual  capacity  a  party  to  the  suit.  The  prior  estate  for 
life  in  ti'ust  not  being  subject  to  the  mortgage,  or  within  the 
power  of  the  trustee  to  dispose  of,  remains  unaffected.'*  In  like 
manner  if  there  be  an  outstanding  right  of  dower  in  the  wife  of 
the  mortgagor,  the  making  of  her  a  party  to  an  action  of  fore- 
closure, and  the  rendering  of  a  judgment  foreclosing  the  rights  of 
the  defendants  in  the  premises,  do  not  affect  this  right.  This  re- 
mains the  same  as  if  she  had  not  been  made  a  party  to  the 
action.^  If,  however,  the  mortgage  be  given  to  secure  the  pur- 
chase money,  the  wife's  dower  is  then  subordinate  to  the  nu)rt- 
gage,  and  is  barn;d  if  she  be  made  a  party."    Moreover,  the  decree 

1  Bloomer  v.  SturRCS,  58  N.  Y.  168.  502;  (Juriiinj,'  v.  Sinitli,  0  N.  Y.  82  ;  Lee 

2  Wade    V.  Miller,    32    N.   J.    L.    296;     u.  Parker,  43  Bart..  (N.  Y.)  611. 
Elliott  V.  Pell,  1  I'aiKe  (N.  Y.),  263;  Eaf^le         »  j^wis  if.  Smith,  9  N.  Y.  502. 

Fire  Co.  v.   Lent,  6  Pai(,'e  (N.  Y.),  635;         *  Uatlibone  v.  Ilotmoy,  58  N.  Y.  463. 
Holcombu.  Ilolcoml),  2  Barl..  (N.  Y.)  20;         i  Wade    v.    Miller.   32    N.  J.  L.  296; 
FroHf   V.   Koon,  30  N.  Y.  428 ;  Ia-wIs  v.     MercliantH'  Bank  v.  Thomson,  55  N.  Y.  7. 
Smith,   11    Barb.    (N.  Y.)  l.'J2;   9  N.  Y.         «  Brackett  v.  Baum.  50  N.  Y.  8.     This 

decision  relates  to  a  power  of  sale  mort- 

491 


§§  l.">00,  lAOl.]  nr.rur.K  or  saf.k. 

is  final  iinil  conclusive  only  against  the  owner  and  subsequent 
parties  in  interest,  when  they  have  been  made  parties  to  the  suit; 
and  is  unvailing  against  any  one  interested  in  the  premises  who 
was  not  made  a  party. ^ 

4.    The  Amount  of  the  Decree. 

1590.  The  decree  directing  a  sale  of  the  premises  should 
find  the  exact  amount  due  on  tlie  mortgage,  and  not  leave  this 
to  be  calculatt'd  by  the  oilicer."^  A  decree  which  simply  orders 
the  payment  of  the  sum  due  on  the  mortgage  debt,  without  find- 
ing the  amount,  is  erroneous.^  Where  several  mortgages  upon 
separate  parcels  of  land  are  foreclo.sed  together,  the  decree  must 
find  the  amount  due  upon  each,  and  not  the  aggregate  amount 
secured  by  all.*  The  parties  themselves  may  fix  the  amount  by 
agreement,  and  this  will  be  adopted  by  the  court  in  entering  the 
decree.^  The  amount  due  may  be  determined  by  the  court,**  or 
for  its  convenience  reference  may  be  made  to  a  master  or  clerk  of 
court,  or  other  officer,  to  ascertain  the  amount.'^  A  part  of  the 
debt  not  due  cannot  be  included.^  But  an  instalment  falling  due 
before  the  hearing,  although  not  due  when  the  suit  was  brought, 
may  be  included.^ 

If  the  mortgagor  desires  an  account  taken  of  the  amount  of 
profits  received  by  the  mortgagee  in  possession,  he  should  ask  the 
action  of  the  court  in  session,  and  upon  a  hearing  by  the  court  or 
before  a  master  should  offer  his  proof. '*^  The  question  of  the  mort- 
gagee's liability  to  account  for  rents  and  profits  should  be  raised 
by  the  pleadings,  otherwise  the  master  under  an  order  of  reference 
will  not  without  special  directions  entertain  it.^^ 

1591.  Ordinarily  the  decree  cannot  include  any  instalment 

gage  foreclosed  under  the  statute,  but  the  354 )  Nosier  v.  Haynes,  2  Nev.  53  ;  Clarke 

reasoning  applies  here.  i-.  Bancroft,  13  Iowa,  320. 

1  Shores  v.  Scott  River  Co.  21  Cal.  «  Viiu},'hn  v.  Nims,  36  Mich.  297  ;  Rol- 
135  ;  Goodenow  v.  Ewer,  16  Cal.  461.  lins  v.  Forbes,  10  Cal.  299  ;  and  see  Davis 

2  Wernwag  v.  Brown,  3  Blackf.  (Ind.)  v.  Alvord,  94  U.  S.  545. 

457  ;  Champlin  f.  Foster,  7  B.  Mon.  (Ky.)         ^  Ireland  v.  Wolman,  15  Mich.  253. 
104.    As  to  certainty  in  the  amount  of  the         ^  King  v.  Longworth,  7  (Jhio,  585. 
decree,  see  Mulvey  v.  Gibbons,  87  111.  367.         ^  Manning  v.  McClurg,  14  Wis.  350. 

3  Tompkins  v.  Wiltberger,  50  III.  385.  i*)  Hards  v.  Burton,  79  111.  504;  and  see 
<  Hader  v.  Ervin,  1  Mon.  T.  632 ;  Collier  Roberts  u.  Pierce,  79  III.  378. 

V.  Ervin,  2  lb.  .335.  n  Wycoff  v.  Combs,  28  N.  J.  Eq.  40. 

6  Kelly  V.  Searing,  4  Abb.  (N.  Y.)  Pr. 

492 


THE    AMOUNT    OF   THE   DECREE.  [§  1592. 

of  the  mortgage  debt  not  due  at  the  time ;  ^  though  if  an  in- 
stahneut  not  due  when  the  suit  was  commenced  falls  due  before 
the  decree  is  entered,  the  amount  of  it  is  properly  included. ^ 
When  only  a  portion  of  the  debt  is  due,  the  judgment,  besides 
finding  the  amount  actually  due  at  the  time  it  is  entered,  should 
find,  also,  the  amount  secured  by  the  mortgage  not  then  due,  and 
should  provide  for  a  stay  of  proceedings,  if,  before  the  day  of  sale, 
the  mortgagor  pay  the  amount  with  costs.^  But  whether  the 
amount  not  due  should  be  stated  or  not  depends  upon  the  statutes 
and  pi-actice  of  the  different  states.* 

When  by  the  terms  of  the  mortgage  the  mortgagee  may,  upon  a 
default,  elect  to  consider  the  entire  amount  of  the  morto-ase  debt 
as  due,  and  he  notifies  the  mortgagor  of  his  election  so  to  consider 
it  before  filing  a  bill  for  foreclosure,  he  is  entitled  to  a  decree  for 
the  full  amount,  although  only  a  part  of  the  debt  is  due.° 

1592.  Amount  when  mortgage  is  held  as  collateral  secu- 
rity. —  If  a  mortgage  made  without  consideration  paid  by  the 
mortgagee  be  assigned  by  the  latter,  as  indemnity  against  the 
assignee's  liability  as  indorser  for  the  mortgagor,  it  is  of  course 
security  only  for  the  amount  the  indorser  has  been  obliged  to  pay, 
and  on  foreclosure  the  decree  should  be  for  that  amount  only.^ 
When  a  mortgage  given  to  indemnify  sureties  is  foreclosed,  while 
suit  is  pending  on  the  claim  indemnified  against,  the  decree  may 
properly  direct  payment  of  the  proceeds  of  sale  into  court,  to 
await  further  order  of  court.' 

If  the  complainant  holds  the  mortgage  assigned  to  him  as  col- 
lateral security  for  a  specific  debt  of  less  amount  than  the  mort- 
gage, he  can  only  have  a  decree  for  that  debt,  although  pending 
the  suit  the  mortgage  is  assigned  to  him  absolutely.  His  remedy 
for  the  residue  is  by  a  supplemental  bill ;  or  in  case  the  whole 
premises  are  sold  upon  the  decree  in  the  original  suit,  he  might 
have  remedy  by  petition  for  the  surplus.^ 

And  so  if  one  holding  a  UKjrtgage  as  collateral  security  at  the 

1  King  V.  Longworth,  7  Uliio,  585.    Sec  Iliillett,  1  Ala.  .379  ;  Taf;t,'ait  v.  San  Au- 

§  1478.  tonio,  &c.  Mining  Co.  18  Cal.  460. 

'•'  Howe     V.     Ix;mon,     37     Mich.    104  ;  *   lIoHinan  on  Utferees,  p.  229. 

Vaughn  v.  Nims,  .36  Mich.  297  ;  Manning  ^  Noonati  v.  Lte,  2  Hliick,  499. 

V.  McClurg,  14  Wis.  .3.-)0.  ''   Van  Dcventcr  v.  Stiger,   25  N.  J.  E(i. 

«  Kice  V.  Cribb,  12  Wis.  179.    Sec,  also,  224. 

as  to  the  practice  in  such  cases,  Walker  v.  '  Hunter  v.  I.*van,  1 1  ("al.  1 1 

8  Underbill  t;.  Atwfticr,  22  N.J.  K<i.  16. 

49:3 


§  1592.]  DKCRKK   OF   SALK. 

ivqiu'sl  of  tlu'  mortgagor,  \vlio  owos  tlu>  ])riiK'ipal  dubt,  assigns  the 
mortgage  tt)  ;i  third  person  for  ji  sum  less  than  the  face  of  the 
mortgage,  which  sum  is  crediti'd  on  the  principal  debt,  and  the 
mortgagor  subsecpuMitly  pays  the  bahince  of  this  debt,  the  mort- 
gage in  the  luinds  of  the  assignee  can  be  enforced  for  only  the 
amount  he  paid  for  it  either  as  against  the  mortgagor  or  against 
subsequent  incumbrancers  at  the  time  of  the  assignment,  for  in 
such  case  that  amount  is  the  only  part  of  the  mortgage  remaining 
unpaid.^ 

1593.  If  the  mortgage  secures  a  bond,  the  decree  may  be 
entered  for  the  full  amount  of  principal  and  interest  due  uj)on 
the  bond,  though  it  exceeds  the  amount  of  the  penalty .^  Even 
when  the  suit  is  founded  on  the  bond  alone,  the  plaintiff  may  re- 
cover the  full  amount  of  the  penalty  as  a  debt,  and  interest  in  ad- 
dition, as  damages  for  the  detention  of  the  debt.^  When  the  suit 
is  not  upon  the  bond,  but  is  a  proceeding  in  equity  upon  the  mort- 
gage given  to  secure  the  bond,  it  has  been  considered  that  the  lien 
upon  the  land  is  for  the  whole  debt,  both  principal  and  interest, 
according  to  the  condition  of  the  mortgage.  "  The  mortgage," 
says  Sir  William  Grant,*  "  is  to  secure  payment  not  of  a  bond, 
but  of  the  sum  for  which  the  bond  was  given,  together  with  all 
interest  that  may  grow  due  thereon.  The  same  sum,  therefore,  is 
differently  secured  by  different  instruments ;  by  a  penalty  and  by 
a  specific  lieu.  The  creditor  may  resort  to  either,  and  if  he  resorts 
to  the  mortgage,  the  penalty  is  out  of  the  question." 

The  American  cases  go  further  than  this  and  hold  that  the  real 
debt  is  the  sum  specified  in  the  condition  of  the  bond,  with  inter- 
est, and  that  the  penalty  is  a  mere  matter  of  form  of  instrument 

1  Hoy  V.  Brumhall,  19  N.  J.  Eq.  74.  to  recover  a  larger  amount  ujjon  tlie  niort- 

2  Lon;^  V.  Long,  16  N.  J.  Eq.  59.  But  gage,  wliich  is  a  mere  security  for  the 
see  Harper  v.  Barsh,  10  Rich.  (S.  C.)  Eq.  bond,  than  he  is  permitted  to  recover  ujjon 
149  ;  Mower  v.  Kip,  6  Paige  (N.  Y.)  88;  the  bond  itself." 

reversing,  S.  C.  2  Edw.  Ch.  163.  In  Cruger  v.  Daniel,  1  McMul.  (S.  C.) 

^  Long  V.  Long,  supra,  and  cases  cited  Eq.    157,     the    Chancellor,    referring    to 

there.  Clarke  v.  Lord  Abingdon,  very  justly  re- 

*  Clarke  v.   Lord  Abingdon,    17    Ves.  marks  that  the   mortgage   there  did  not 

106.     Mr.   Chancellor  Green,  in  Long  v.  secure  the  bond,  nor  did  it  secure  or  refer 

Long,  supra,  says,  in  reference  to  this  dis-  to  the  penalty ;  and  he  holds  that  when 

tinction  :  "  Looking  at  the  question  as  a  the  mortgage  expressly  refers  to  the  bond 

mere  question  of  equity  it  will  be  found  and  states  the  penalty,  this  is  the  entire 

very  difficult  to  assign  a  satisfactory  rea-  debt  secured,  and  the  judgment  cannot  go 

son  why  the  obligee  should  be  permitted  beyond  it. 

494 


THE   AMOUNT    OF   THE   DECREE.        [§§  1595-1597. 

declaring  the  debt.  This  is  the  view  taken  by  Chancellor  Wal- 
worth, and  followed  in  other  cases.  "■  The  amount  secured  by  the 
condition  of  the  bond  is  the  real  debt,  which  he  was  both  legally 
and  equitably  bound  to  pay.  And  if  he  neglects  to  pay  the  money 
when  it  becomes  due,  there  is  no  rule  of  justice  or  common  sense 
which  should  excuse  him  from  the  payment  of  the  whole  amount 
of  the  principal  and  interest,  whether  it  be  more  or  less  than  the 
former  penalty  of  the  bond."  ^ 

1594.  Interest.  —  The  decree  should  be  for  the  amount  of  the 
debt  with  interest  thereon  if  it  bears  interest.  If  the  interest 
has  been  paid  by  a  note  of  the  mortgagor,  and  this  remains  out- 
standing, the  amount  of  such  note  should  be  included  in  the  de- 
cree, not  only  as  against  the  mortgagor,  but  as  well  against  sub- 
sequent incumbrancers,  although  the  interest  is  indorsed  on  the 
mortcacfe  note  as  paid.^  If  the  debt  does  not  bear  interest  the 
decree  should  not  include  interest.^ 

1595.  Exchange.  —  No  allowance  can  be  made  for  the  differ- 
ence of  exchange,  though  the  mortgage  loan  was  negotiated  in  a 
foreign  country  where  the  mortgagee  resides.* 

1596.  Insurance.  —  Premiums  paid  by  the  mortgagee  for  in- 
surance against  fire  are  charged  upon  the  premises  if  the  mort- 
gagor has  expressly  made  them  such  ;  but  if  paid  without  such 
agreement,  they  cannot  be  allowed  in  the  judgment.^  They  are, 
in  such  case,  paid  merely  for  the  mortgagee's  own  security. 

If  the  mortgage  be  of  a  leasehold  estate,  the  decree  may  in- 
clude rent  paid  by  the  mortgagee  for  the  protection  of  the  estate.^ 

1597.  Taxes.  —  A  mortgagee  cannot  charge  to  the  mortgagor, 
or  have  included  in  a  decree  in  a  foreclosure  suit,  the  amount 
he  has  paid  as  taxes  on  his  mortgage  as  for  money  at  interest. 
lie  is  as  much  bound  to  pay  the  tax  upon  this  as  upon  his  other 
property.'^  But  he  may  be  allowed  for  payments  made  upon  taxes 
assessed  upon  the  land,  and  wiiicli  are  a  charge  upon  it,  properly 
payable  by  the  mortgagor.^     The  I>ill  should  contain  a  proper  al- 

1  Mower  i;.  Kipp,  6  Paige  (N.  Y.)  88  ;         *  Cliapninn  v.   Uol)ertson,  C  Tai^^c  (N. 

ajjproved   in    Long  v.  Long,   10  N.  J.  Kq.  Y.),  027.     Sec  §  637- 
59;  in  which  case  Chancellor  Green  fully         '  Se  §  414;    Fnure  r.   Winans,   Hop. 

reviews  the  decisions.  (N.  Y.)  Ch.  283. 

»  Sec  §  926;  Frink  v.  Branch,  10  Conn.         <>  Kobinson  v.  Ilynn,  25  N.  Y.  320. 
260.  '  I'ond  1^.  Cau.HdVll,  23  N.  J.  Kq.  181. 

»  Hejdlc  .;.  Uazlehurst,  4  Bibb  (Ky.),         "  Sic  §§  1134.  1683;   ra..n-  r.  Winans, 

ly  Hop.  (N.  Y.)  Ch.  283  ;  Silver  Lake  Bank 

495 


§§  1.")9S-1G00.]  DKORKK   OF   SALE. 

legation  ami  prayer  in  regard  to  taxes,  otherwise  the  decree  can- 
not properly  direct  an  application  of  the  proceeds  of  a  sale  to  the 
payment  of  the  delincpient  taxes. ^  Even  when  the  taxes  remain 
outstanding  and  unpaid,  the  decree  may,  upon  the  application  of 
the  plaintilT,  properly  direct  that  the  taxes  due  on  the  property 
be  first  paid  out  of  the  proceeds  of  the  sale.^  But  after  trial  in 
the  foreclosure  suit,  and  without  notice  to  the  mortgagors,  it  is 
error  to  include  the  taxes  in  a  judgment  entered  merely  upon  the 
production  of  the  tax  receipt.^ 

If  the  taxes  were  illegally  assessed  and  the  payment  thereof 
might  have  been  successfully  resisted,  the  mortgagee  will  not  be 
allowed  to  recover  them.* 

1598.  Costs  incurred  in  a  previous  action  at  law  upon  the 
note,  and  the  expenses  of  a  suit  prosecuted  in  good  faith  to  col- 
lect the  debt  out  of  pei'sonal  property  assigned  as  collateral  secu- 
rity for  the  same  debt,  should  be  allowed  in  the  decree  as  a  part 
of  the  mortgage  debt.*^ 

1599.  The  disbursements  made  by  the  plaintiff  in  the  pro- 
ceedings for  foreclosure,  if  legally  and  properly  made,  are  always 
allowed  to  him,  though  not  strictly  costs.*^ 

Payments  made  by  the  plaintiff,  to  protect  his  interest  by  re- 
deeming from  prior  incumbrances,  may  be  tacked  to  his  own  mort- 
gage debt."  Inasmuch  as  the  junior  mortgagee  is  thus  subrogated 
to  the  prior  mortgage,  his  decree  should  include  interest  on  that 
mortgage  at  the  rate  borne  by  it  to  the  date  of  the  decree.^ 

1600.  Pinal  judgment.  —  A  judgment  which  directs  the  sale 
of  the  premises,  and  that  the  defendant  pay  any  deficiency  which 
may  arise  after  such  sale,  is  a  final  decree  from  which  an  appeal 
may  be  taken.     It  leaves  nothing  further  to  be  adjudicated.''     It 

V.  North,  4  Johns.  (N.  Y.)  Ch.  370;  Ra-  ^  Northwestern    Mut.  Life  Ins.   Co.  v. 

pelye  v.  Prince,  4  Iliil  (N.  Y.),  1 19  ;  Burr  Allis,  23  Minn.  337. 

V.  Veeder,  3  Wend.  (N.  Y.)  412 ;  De  Leuw  *  Atwater  v.  West,  28  N.  J.  Eq.  361. 

V.  Neely,  71  111.  473;  Vaughn  v.  Nims,  36  ^  gee  §  1084;  Pettibono  v.  Stevens,  15 

Mich.  297.  Conn.  19. 

1  De  Leuw  v.  Neely,  71  111.  473.  *^  Benedicts.  Warriner,  14  How.  (N.  Y.) 

2  Pou}:hkeepsie  Sav.  Bank  v.  Winn,  .56  Pr.  568. 

How.  (N.  Y.)  Pr.  368  ;  Opdyke  v.  Craw-  '  Mosier  v.  Norton,  83  111.  519. 

ford,  19  Kans.  604;  Easton  v,  Pickersgill,  •*  Mosier  v.  Norton,  supra. 

55  N.  Y.  310;  Tuck  v.  Calvert,  33  Md.  »  Morris  v.  Morange,  38  N.  Y.  172;  4 

210,  224;  Ketcham  v.  Fitch,  13  Ohio  St.  Abb.  Pr.  N.  S.  447  ;  Bolles  v.  Duff,  43  N. 

201.  Y.  469  ;  10  Abb.  Pr.  N.  S.  399 ;  41  How. 


496 


Pr.  355 ;  Hipp  v.  Huchett,  4  Tex.  20. 


COSTS.  [§§  1601,  1602. 

is  no  objection  to  such  judgment  that  it  was  not  rendered  by  a 
court  composed  of  the  same  judges  who  rendered  the  preliminary 
judgment,  ascertaining  and  settling  the  rights  of  the  parties  and 
ordering  judgment.^  The  judgment  for  a  deficiency  is  entered 
upon  the  coming  in,  and  confirmation  of,  the  report  of  the  sale 
witliout  any  further  application  to  the  court.  The  execution 
issues  by  virtue  of  the  judgment  for  foreclosure.^  Nothing  re- 
mains to  be  judicially  determined,  and  an  appeal  may  be  taken  at 
once.^  An  appeal  is  the  proper  remedy  for  any  errors  in  sub- 
stance of  the  decree,  or  in  the  directions  for  carrying  it  into  exe- 
cution ;*  but  the  court  has  control  of  the  judgment,  though  final, 
and  may  on  proper  application  change  the  provisions  of  it,  or  in- 
sert other  provisions  for  the  benefit  of  any  of  the  parties  to  the 
action.^ 

1601.  No  stay  of  proceedings  can  be  had  on  account  of  a 
controversy  between  subsequent  incumbrancers.  In  case  of 
an  appeal  from  a  decree  of  sale  on  a  bill  to  foreclose  a  mortgage, 
the  amount  of  which  and  of  other  mortgages  upon  the  property 
are  not  disputed,  though  there  is  a  controversy  about  the  validity 
of  certain  judgments  subsequent  to  the  mortgages,  the  court  will 
not  stay  proceedings  under  the  decree,  but  will  order  the  surplus 
money  to  be  brought  into  court  to  abide  its  decision  ;  for  in  such 
case,  if  the  decree  should  be  reversed  the  mortgagor  cannot  be 
prejudiced,  while  the  mortgage  creditors  would  be  prejudiced  by 
a  delay  in  recovering  their  claims.^ 

5.   Costs. 

1602,  In  general.  —  The  mortgagee  in  a  foi-eclosure  suit  as  in 
otlier  cases  is  ordinarily  entitled  to  his  costs  of  suit,  when  he  pre- 
vails and  obtains  a  decree,  whether  he  be  complainant  or  defend- 
ant.^ If,  however,  he  has  acted  oppressively  in  demanding  a 
larger  sum  tiuui  was  due  on  his  mortgage,  and  tlie  mortgagor  has 

'  Chamberlain  v.   Dem|iscy,  30  N.   Y.  «  Schcnck  i;.  Conover,  13  N.J.  Eq.  31. 

144;  reversiii-,'  S.  C.  9  Bos.  .540.  i  Loftiis   v.  Swift,  2   Sch.  &  Luf.  642; 

'^  Bicknell  v.  Byrnes,  23  How.  (N.  Y.)  Bartle  r.  Wiiltin,  8  Sim.  238  ;  Witherell  v. 

480.  Collins,  3  Mad.  25.'j ;  Concklin  v.  Coiidint;- 

8  Bolles  V.  Duff,  43  N.  V.  40'J ;  Morris  ton,  1    Btas.  (N.  J.)  2.0O ;  Benedict  r.  Gil- 

V.  Mornnj^e,  38  N.  V.  172.  man,  4  Paige  (N.  Y.),  .')8  ;  anri  without  rcf- 

*  Barnard  v.  Bruce,  21  How.  (N.  Y.)  crence  to  his  success.  Slee  v.  Manhattan 
I'r.  300.  Co.  1  Paige  (N.Y.),48  ;  Vroom  v.  Ditma«, 

*  Livingston  v.  Mildrum,  19  N.  Y.  440.  4  lb.  .526. 

VOL.  n.  32  497 


§§  1G03,  1G04.]  DECREE   OF   SALE. 

been  diligent  in  endeavoring  to  ascertain  from  liini  the  amount  of 
the  incumbranco  in  order  to  pay  it,  costs  will  be  denied  to  him,  or 
possibly  in  some  cases  awarded  against  him  ;  ^  but  merely  claim- 
ing in  good  faith  a  larger  sum  than  the  court  finally  decides  that 
he  is  entitled  to  is  no  ground  for  refusing  him  his  costs.^  He 
may  be  made  to  pay  costs  if  he  has  rejected  a  tender  of  the  full 
amount  due  him  ;  ^  or  if  the  litigation  has  in  any  way  been  occa- 
sioned by  his  misconduct. 

1603.  The  matter  of  costs  depends  very  much  upon  the 
statutes  and  practice  of  the  several  states,  which  are  quite 
unlike.  The  foreclosure  suit  being  an  equitable  one,  the  costs  are 
generally  within  the  discretion  of  the  court.'*  But  although  there 
is  no  fixed  rule  for  giving  costs  as  in  courts  of  law,  the  courts  rarely, 
if  ever,  refuse  costs.^  The  disbursements  made  for  carrying  on  the 
suit  are  not  strictly  costs,  but  if  they  are  legally  made  and  are  of 
a  reasonable  amount  they  are  allowed  to  the  party  making  them.*^ 
Provision  is  sometiities  made  that  a  plaintiff  may  serve  upon  a 
defendant  a  notice  that  no  personal  claim  is  made  upon  him  ;  and 
that  in  such  case  no  service  of  the  complaint  by  copy  need  be 
made  on  such  defendant ;  and  then  in  case  he  unnecessarily  de- 
fends, he  is  liable  in  costs  to  the  plaintiff.^  If  a  copy  of  the  com- 
plaint be  served,  no  notice  for  this  purpose  is  required.^ 

1604.  If  subsequent  incumbrancers  unnecessarily  appear  and 
answer,  they  are  not  entitled  to  costs  until  after  the  plaintiff's 
debt  and  costs  are  satisfied ;  ^  and  it  is  not  necessary  that  they 
should  appear  to  a  foreclosure  suit  if  their  claims  are  correctly  set 

1  Detillin  v.  Gale,  7  Ves.  583 ;  Large  v.  157  ;  O'Hara  v.  Brophy,  24  How.  (N.  Y.) 
Van  Doren,  14  N.  J.  Eq.  208  ;  Vroom  v.  Pr.  379  ;  Bartow  v.  Cleveland,  16  lb.  364  ; 
Ditraas,  4  Paige  (N.  Y.),526;  Van  Buren  7  Abb.  Pr.  339;  Pratt  v.  Ramsdell,  16 
V.  Olmstead,  5  lb.  9.  IIow.  (N.  Y.)  Pr.  59 ;  7  Abb.  Pr.  340,  n. ; 

2  Loftus  V.  Swift,  2  Sch.  &  Lef.  642.  Gallaghar  v.  Egau,  2  Sandf.  (N.  Y.)  742; 
8  Shuttleworth  v.  Lowther,  7  Ves.  586 ;     Lessee  v.  Ellis,  13  Hun  (N.  Y.),  655. 

Pratt  V.  Stiles,  9  Abb.  (N.  Y.)  Pr.  150;  »  Stevens  v.  Veriane,  2  Lans.  (N.  Y.) 

17  How.  Pr.  211.  90  ;  Eastburn  u.  Kirk,  2  Johns.  (N.  Y.)  Ch. 

In   New  York  it  is  held  that  the  fact  317;  Garr  u.  Bright,  su/>ra. 

that  a  tender  has  been  made  makes  no  ®  Benedict  v.  Warriner,  14  How.  (N.  Y.) 

difference   in    the   amount   of   the   costs.  Pr.  568. 

Barton  v.  Cleveland,  16  How.  (N.  Y.)  Pr.  ^  Code  of  N.  Y.  §§  131,  157. 

364  ;  7  Abb.  Pr.  339;  Pratt  v.  Ramsdell,  »  O'Hara  v.  Brophy,  24  How.  (N.  Y.) 

16  How.   (N.  Y.)  Pr.  59,  62  ;  7  Abb.  Pr.  Pr.  379. 

340,  n. ;  Stevens  v.  Veriane,  2   Lans.  (N.  ^  Merchants'  Ins.  Co.  v.  Marvin,  1  Paige 

Y.)  90.  (N.  Y.),  557  ;  Barnard  v.  Bruce,  21  How. 

*  Garr  v.  Bright,  1   Barb.  (N.  Y.)  Ch.  (N.  Y.)  Pr.  360. 
498 


COSTS.  [§§  1605,  1606. 

forth  in  the  bill,  as  their  rights  will  be  fully  protected  under  the 
decree.  Where  the  court  has  discretionary  powers  in  regard  to 
costs,  and  the  appearance  of  such  incumbrancex's  though  proper  is 
not  necessary,  the  plaintiff,  upon  receiving  the  amount  due  him 
after  he  has  brought  suit,  may  discontinue  against  subsequent  in- 
cumbrancers who  have  appeared,  without  costs  to  them.^  Ordi- 
narily, however,  a  subsequent  mortgagee  would  be  entitled  to 
costs  in  such  case.^  If  a  second  mortgagee  after  being  made  a 
party  to  a  suit  to  foreclose  a  prior  mortgage  receives  payment  and 
offers  to  disclaim,  he  is  entitled  to  his  costs.^ 

A  subsequent  purchaser  of  the  premises  may  make  himself  per- 
sonally liable  for  costs,  though  not  liable  for  the  debt,  if  he  makes 
an  unreasonable  and  unfounded  defence  to  the  suit,  and  the  prop- 
erty is  not  of  sufficient  value  to  pay  the  incumbrances.* 

1605.  Defendants  who  properly  appear  and  answer  are  en- 
titled to  costs  as  a  general  rule.  But  several  defendants  having 
the  same  defence  and  employing  the  same  solicitor  are  not  al- 
lowed to  swell  the  costs  by  filing  separate  answers.''  A  prior 
mortgagee  whether  properly  made  a  party  for  the  purpose  of  hav- 
ing the  amount  of  his  claim  ascertained,^  or  whether  improperly 
joined,  is  entitled  to  costs,  to  be  paid  out  of  the  fund  in  the  one 
case,  or  in  the  other  by  the  plaintiff  personally.^ 

1606.  Counsel  fees.  —  A  reasonable  fee  for  the  expense  of 
foreclosing  beyond  the  costs  allowed  by  law  may  be  contracted  for 
in  the  mortgage  ;  and  the  court  will  consider  the  amount  stipu- 
lated for  by  the  parties  to  be  reasonable,  unless  it  be  extravagantly 
large  and  extortionate.  A  percentage  may  be  allowed  instead 
of  a  fixed  sum  as  a  fee.^ 

A  stipulation  in  a  mortgage,  allowing  counsel  fees  for  a  foreclos- 
ure, does  not  entitle  the  plaintiff  to  counsel  fees  unless  he  has 
paid  them  or  become  liable  for  them  ;  he  cannot  recover  such  fees 

'  Gallagher  v.  Egan,  2  Sandf.  (N.  Y.)  ">  Miilaudou  v.  Brugicro,  11   Paige  (N. 

742.  Y.),  163. 

2  Young  i\  Young,  17  N.. J.  E(i.  101.  «  See  §§  369,  636  ;  Cox  u.  Smiili,  1  Nov. 

*  iMy  V.  Gudgcn,  L.  11.  2  Ch.  Div.  209.  161  ;  McLaiie  v.  Abrams,  2  Nov.  199.     In 

*  Danbury  v.  liobinson.  14  N.  J.  Eij.  this  case  a  stipulation  for  ton  per  cent,  on 
324.  the  amount  of  the  mortgage,  Stl.ooo,  was 

*  Danbury  v.  Robinson,  supra.  not  regarded  as  unreasonable.     In  Daly 
"  Chamberlain  i-.    Dempsey,   36  N.  Y.     v.  Maitland   (Pa.),  13  West.  Jur.  204.  a 

144, 147  ;  Boyd  I'.  Dodge,  10  Paige  (N.  Y.),     8tii)ulation    for  a  commiHHion  of  five  per 
42.  cent,  on   a  mortgage  of  514,000  was  con- 

sidered to  be  unreasonable. 

4y'j 


§  1G06.]  DECRF.K    OF   SALK. 

iov  personally  prosocutiiig  his  forcclosuro.'  It  is  not  noeossary 
that  there  shouhl  be  any  averment  that  the  amount  of  fees  stipu- 
hited  for  in  the  deed  is  reasonable,  as  they  are  a  mere  incident  to 
the  cause  of  action,  and  may  be  fixed  by  the  court  at  its  discre- 
tion.^ If  there  be  no  stipulation  in  the  mortgage  for  counsel  fees 
they  cannot  be  recovered.  This  is  wholly  a  matter  of  contract ;  ^ 
unless  provided  for  by  statute  as  is  the  case  in  some  states,  as,  for 
instance.  New  York.* 

A  stipulation  to  pay  a  reasonable  attorney's  fee  for  foreclosure 
to  be  taxed  in  the  judgment  is  not  usurious  and  will  be  enforced.^ 
The  debtor,  by  neglecting  or  refusing  to  pay,  imposes  upon  the 
mortgagee  the  expense  of  resorting  to  law  to  enforce  his  rights, 
and  it  is  only  just  that  the  expenses  of  foreclosure  should  be  borne 
by  the  party  whose  own  wrong  has  made  it  necessary  to  incur 
them.  A  stipulation  for  the  payment  of  an  attorney's  fee  of  $25, 
on  the  foreclosure  of  a  mortgage  of  $11,000,  is  not  unreasonable. 
It  is  presumed  that  such  stipulations  are  made  in  reference  to  the 
costs  and  expenses  otherwise  chargeable,  and  that  such  fee  is  an 
allowance  additional  to  these.*"  A  stipulation  of  five  per  cent,  of 
the  amount  of  the  mortgage  for  counsel  fees  is  additional  to  the 
costs  recoverable  by  statute."  A  provision  in  the  mortgage  that 
the  mortgagor  shall  in  case  of  foreclosure  pay  the  costs,  "  and  fifty 
dollars  as  liquidated  damages  for  the  foreclosure  of  the  mortgage," 
was  held  to  be  void,  because  so  indefinite  that  the  court  could  not 
tell  whether  the  payment  was  intended  to  be  for  something  legal 
or  illegal  A  judgment  rendered  under  such  a  stipulation  for  fifty 
dollars  as  attorney's  fees  was  declared  erroneous.*^     But  a  stipula- 

1  Patterson  V.  Donner,  48  Cal.  369.  ^  Hitchcock  v.  Merrick,   15   Wis.   522; 

2  Carriere  v.  Minturn,  5  Cal.  435.  Rice  v.  Cribbs,  12  Wis.  179;  Boyd  v.  Sum- 
8  Sichel  V.  Carrillo,  42  Cai.  493 ;  Stover     ner,  10  Wis.  41 ;    Tallman  v.  Truesdcll,  3 

V.  Johnnycake,  9  Kans.  367.  Wis.  454.     In  Remington  v.  Willard,  15 

*  Code,  §  109;  and  see  Hunt  v.  Chap-  Wis.  583,  the  mortgage  stipulated  for  a 
man,  62  N.  Y.  333.  fee  of  $75,  and  the  court  allowed  under 

*  §  635;  Weatherby  v.  Smith,  30  Iowa,  the  Code  five  per  cent,  on  the  amount  due, 
131;  Gower  i>.  Carter,  3  Iowa,  244;  Gil-  being  a  very  much  larger  sum.  A  stipula- 
more  v.  Ferguson,  28  Iowa,  220;  Conrad  tion  for  $100  solicitor's  fees,  in  a  mortgage 
V.  Gibbon,  29  Iowa,  120  ;  McGill  v.  Griffin,  for  $10,000,  was  enforced  in  Pierce  v.  Knee- 
32  Iowa,  445;  Nelson  v.  Everett,  29  Iowa,  land,  16  Wis.  672. 

184.     In  Williams   v.  Meeker,    29   Iowa,  ^  Gronfier  v.  Minturn,  5  Cal.  492;   Car- 

292,  an  attorney's  fee  of  $75  was  allowed,  ricre  v.  Minturn,  5  Cal.  435. 

Contra,  Thoma.sson  r.  Townsend,  10  Bush  ^  Footer.  Sprague,  13  Kans.  155  ;  Kurtz 

(Ky.),  114;  Killing  y.  Thompson,  12  lb.  »;.  Sponable,  6Kans.  395  ;  Tholcn  v.Duffy, 

310. 

500 


COSTS.  [§  1607. 

tion  that  the  mortgagee  shall  be  entitled  "  to  a  judgment  for  the 
possession  of  said  premises,  and  costs,  expenses,  and  attorney's 
fees  of  ten  per  cent,  of  the  amount  due  for  foreclosing  said  mort- 
gage," is  valid  ;  and  on  a  mortgage  debt  of  $4,000,  or  less,  the 
amount  is  not  so  excessive  that  a  court  of  equity  will  refuse  to  en- 
force it.^  Under  a  provision  in  a  power  of  sale  for  an  attorney's 
fee  in  case  of  foreclosure,  no  allowance  can  be  made  if  the  mort- 
gage is  foreclosed  in  chancery  instead.^  A  stipulation  that  "  an 
attorney's  fee  of  fifty  dollars  for  foreclosure,  with  costs  of  suit  and 
accruing  costs,"  shall  be  taxed  against  the  mortgagor,  does  not 
authorize  such  a  fee  in  case  there  be  a  decree  for  foreclosure,  and 
the  mortgagor  pays  the  debt  after  suit  is  commenced  but  before 
a  decree  of  sale  is  entered.^ 

It  is  now  provided  by  statute  in  Kansas  that  it  shall  not  be  law- 
ful for  any  person  or  corporation  to  contract  for  the  payment  of 
attorney's  fees  in  any  note,  bond,  or  mortgage  ;  that  any  stipula- 
tion for  that  purpose  is  void  and  cannot  be  enforced.* 

A  mortgagee  in  whose  favor  there  is  a  stipulation  that  he  shall 
be  entitled  to  an  attorney's  fee  in  any  action  that  he  may  bring 
on  the  mortgage  may  claim  such  fee  when  as  a  defendant  in  a 
foreclosure  suit  he  sets  up  his  cause  of  action  ;  for  tliis  is  in  effect 
bringing  an  action  on  the  mortgage.^  Courts  of  equity  may  allow 
a  mortgagee  counsel  fees  incurred  in  defending  his  title,  without 
any  express  contract ;  •^  but  fees  paid  to  counsel  for  resisting  an 
application  by  the  assignee  in  bankruptcy  of  the  mortgagor,  to 
enjoin  a  sale  under  a  power  in  the  mortgage,  do  not  constitute  a 
payment  in  defence  of  the  mortgage  title." 

1607.  An  irregular  attempt  at  foreclosure,  abandoned  after 

7  Kans.  405;    Stover   v.   Johnnycake,    9  and  it  provides  that  in  all  cxistinR  mort- 

Karis.  307.  gatres  in  which  no  amount  is  stipulated  a3 

1  Sharp  »^.  Barker,  11   Kans.  381.  attorney's  fees,  not  more  than   eight  per 

2  Sage  u.  KigL'K.  12  Mich.  313;  Hard-  cent,  on  sums  of  $250  or  under,  and  no 
wick  V.  Uassett,  29  Mich.  17.  In  this  case  more  than  five  per  cent,  on  all  sums  over 
the  court  helow  thought  a  fee  of  $75  "a  $2.')0,  shall  he  allowed  hy  any  court  aa 
reasonahle  number  of  dollars,"  according  attorney's  fees.  Exi.-iting  mortgages  in 
to  the  terms  of  the  mortgage.  which  a  sum  has  Iwen  stipulated  as  attor- 

»  Jennings  i;.  McKay,    19    Kans.    120;  ncys' fees  are  not  affected, 
di.itinguisheil    from  Life  Asso.  i;.  Dale,  17         ^  Lanoue  v.  McKinnon,  19  Kans.  408. 
Kans.  185.  •"'  Lomax  v.  Hide,  2  Vern.  185  ;  Hunt  v. 

*  Dassler's    Stat.    1876,   c.  68,   §  8   a;  Fownes,  9  Ves.  70. 
Laws,  1876,  c.  77,  §  1.  '  Maus  v.  McKellip,  38  Md.  231. 

This  Btatute  took  effect  March   1,  1876, 

501 


§  1607.]  DECREE   OF   SALE. 

i\  siiiLjlo  {mblication  of  the  iu)tico  on  account  of  a  defect  in  this, 
does  not  entitle  the  mortgagee  to  any  attorney's  fee  provided  for 
in  the  mortgage  upon  a  foreclosure  of  it.  By  declining  a  tender 
of  the  full  amount  due,  because  such  fee  is  not  paid  in  addition, 
he  renders  himself  liable  to  a  statutory  penalty  for  refusing  to 
discharge  a  mortgage.^  A  mortgagee  is  not  generally  entitled  to 
costs  of  a  foreclosure  defective  through  an  error  of  his  own  in  the 
proceeilings,  whereby  a  new  foreclosure  is  rendered  necessary.'^ 

Wluue  a  mortgage  provided  that  "  in  the  event  of  foreclosure 
sixty  dollars  attorney's  fee  shall  be  by  the  court  also  taxed,  and 
included  in  the  decree  of  foreclosure,"  it  was  held  that  a  tender 
before  decree  not  including  this  fee  was  good,  and  that  this  fee 
could  not  be  collected  except  by  having  it  taxed  in  the  decree.^ 

1  Collar  V.  Harrison,  30  Mich.  66.  "  Schmidt  v.  Potter,  35  Iowa,  426. 

2  Clark  V.  Stilson,  36  Mich.  482. 

602 


CHAPTER  XXXVI. 


FORECLOSURE  SALES  UNDER  DECREE  OF  COURT. 


I.  Mode  and  terms  of  sale,  1608-1615. 

II.  Sale  in  parcels,  1616-1619. 

IIL  Order  of  sale,  1620-1632. 

IV.  Conduct  of  sale,  1633-1636. 

V.  Confirmation  of  sale,  1637-1641. 

VI.  Enforcement  of  sale  against  the  pur- 
chaser, 1642-1651. 


VII.  The  deed,  and    passing   of    title, 

1652-1662. 
VIII.  The  delivery  of  possession  to  pur- 
chaser, 1663-1667. 
IX.  Setting  aside  of  sale,  1668-1681. 


1.  Mode  and  Terms  of  Sale. 

1608.  Nature  of  a  foreclosure  sale.  —  A  sale  under  a  decree 
of  court  is  in  contemplation  of  law  the  act  of  the  court.  It  is 
made  through  the  instrumentality  of  some  ofi&cer  designated  by 
statute  or  appointed  by  the  court.  Whatever  name  be  given  to 
this  officer,  whether  master  in  chancery,  referee,  trustee,  commis- 
sioner, or  sheriff,!  i^  making  the  sale  he  acts  as  the  agent  of 
the  court,  and  must  report  to  it  his  doings  in  the  execution  of  its 
order.  This  report  should  set  out  all  the  proceedings  incident  to 
the  sale,  the  manner  and  particulars  of  it,  the  conveyance  to  the 
purchaser,  and  the  payment  of  the  proceeds.^  When  the  sale  is 
confirmed  it  becomes  the  act  of  the  court,  or,  in  other  words,  a 
judicial  sale  ;  but,  until  confirmed,  no  title  passes  to  the  pur- 
chaser. In  this  respect  the  sale  is  unlike  a  sheriff's  sale,  which  is 
•A  ministerial  act,  and  the  officer,  and  not  the  court,  is  regarded  as 
the  vendor  ;  and  wliich,  if  made  conformably  to  law,  is  final  and 
valid,  and  pas.se.s  the  title.^ 

'  Heycr  u.  Dcnves,  2  Johns.  (N.  Y.)  Ch.  wards  expires  before  the  sale.    Cord  v. 

154  ;  Mayer  v.  Wick,  15  Ohio  St.  548.     In  Hirsch,  17  Wis.  403. 

the  federal  courts  the  sale  is  usually  made  '■*  For  form  of  report  uHcd  in  New  York, 

by    the   marshal  of   the  district,  or  by  a  sec  5  Wait's  Practice,  228. 

master  Hj)ecially   appointed.     Blossom    v.  *  Uorer'sJud.  Sales,  §§  1-68  ;  Harrison 

Railroad  Co.  3  Wall.  196,  205.     The  sheriff  v.  Harrison,   1   Md.  Ch.    Dec.  335;  Wil- 

or  other  officer  to  whom  the  order  is  piven  liamson  v.  Berry,  8  How.  495,  546. 
may  sell,  though  his  term  of  office  after- 

503 


§§  160l\  ItUO.j       FORKCLOSURE   SALES   UNDER   DECREE   OF   COURT. 

1609.  What  may  be  sold.  —  jNIoitgages  of  estates  for  years,  as 
well  as  those  in  Uh\  may  be  foi'eclosed  by  sale.^ 

Generally  no  other  or  greater  interest  than  that  covci*ed  by  the 
mortgage  ean  be  sold  except  by  consent,  or  in  case  of  an  after- 
acquired  title  of  the  mortgagor.^  On  a  bill  by  a  junior  mortgagee 
nothing  more  than  the  equity  of  redemption  mortgaged  to  liim 
can  be  decreed  to  be  sold,  unless  the  prior  mortgagee  consents 
that  the  decree  may  be  made  for  the  sale  of  the  property,  and  the 
payment  of  his  mortgage  also.^ 

Furthermore,  the  order  of  sale  cannot  embrace  other  lands  not 
described  in  the  mortgage  ;  *  though  when  through  mistake  the 
description  in  a  mortgage  did  not  embrace  a  portion  of  the  land 
intended  to  be  conveyed,  but  the  purchaser  supposed  he  was  buy- 
ing the  whole  estate  intended  to  be  mortgaged,  he  was  protected 
in  his  claim  under  the  sale  to  the  whole.^ 

If  two  tracts  of  land  are  embraced  in  the  mortgage  when  only 
one  of  them  was  intended  to  be  mortgaged,  that  may  be  fore- 
closed alone  without  a  reformation  of  the  deed,  which  would  be 
necessary  in  case  of  a  misdescription  of  the  land.^ 

1610.  Subsequent  incumbrances. —  When  a  junior  mortgagee 
whose  debt  is  due  is  a  party  to  a  suit  to  foreclose  a  prior  mort- 
gage, the  court  may  decree  a  sale  of  so  much  of  the  property  as 
will  be  sufficient  to  satisfy  both  mortgages  and  all  intermediate 
liens ;  and  the  master  may  be  directed  to  ascertain  the  amount  of 
such  liens  previous  to  the  sale.  But  the  junior  mortgagee  cannot 
be  paid  until  the  master's  report  is  filed  and  the  surplus  money 
brought  into  court,  so  that  other  persons  may  have  an  opportu- 
nity to  present  their  claims.^  Ordinarily,  however,  the  amounts 
of  subsequent  incumbrances  will  not  be  determined  until  tlie  ques- 
tion arises  in  its  proper  course  upon  application  made  for  the  sur- 
plus. The  mortgagee  cannot  be  compelled  to  suspend  proceed- 
ings to  allow  subsequent  parties  to  contest  their  rights  as  between 

1  Johnson  v.  Donnell,  15  111.  97  ;    Lan-         ^  gee  §§  97,  1464. 

sing    V.  Albany  Ins.  Co.  Hopk.   (N.  Y.)         •*  Conklin   v.    Bowman,    1 1    Ind.   2.54  ; 
Ch.  102.  Walker  v.  Sellers,  lb.  376  ;  Miller  v.  Kolb, 

2  See  §  1681.  47  Ind.  220. 

»  Roll  V.  Smalley,  6  N.  J.  Eq.  (2  Halst.)  ^  Beekman   v.  Gibbs,  8  Paige  (N.  Y.), 

464.  51 1  ;  Barnes  v.  Stoughton,  10  Hun  (N.  Y.), 

*  Wilkinson  r. Daniels,  1  Greene  (Iowa),  14. 
179. 

504 


MODE   AND   TERMS   OF   SALE.  [§§  1611,  1612. 

themselves.     These  must  be  settled  upon  a  reference  to  a  master 
of  their  respective  claims  to  the  surplus  money .^ 

1611.  Questions  of  priority  of  right  to  the  proceeds  of  sale 
or  of  equities  as  to  the  order  of  sale  cannot  be  litigated  be- 
tween the  defendants  before  judgment  is  entered  for  the  plaintiff 
against  whom  they  set  up  no  equities  or  defence. ^  But  questions 
as  to  priority  of  claims  upon  different  portions  of  the  premises 
should  be  settled  by  the  court  before  a  sale  is  made,  rather  than 
after  the  sale,  as  the  parties  interested  are  then  able  to  act  intelli- 
gibly as  to  the  bidding  at  the  sale,  and  the  officer  selling  can  di- 
rectly afterwards  proceed  to  the  distribution  of  the  proceeds.*^  If, 
however,  these  questions  relate  merely  to  the  distribution  of  the 
surplus  and  do  not  affect  the  order  of  sale,  they  are  properly  set- 
tled upon  application  for  the  surplus  after  sale.* 

1612.  The  notice  of  sale.  —  The  time  and  place  of  the  sale 
and  the  terms  and  conditions  of  it  may  be  prescribed  by  the 
court,^  though  it  generally  leaves  all  these  details  to  the  master  or 
other  officer  charged  with  the  conduct  of  it ;  but  all  his  acts  in  re- 
lation to  it  are  subject  to  tiie  direction  of  the  court  at  all  times, 
and  to  its  sanction  when  the  sale  is  reported  for  confirmation. 
The  notice  of  the  sale,  when  not  regulated  by  statute,  may  be 
prescribed  by  the  decree,  or  left  to  the  officer  intrusted  with  the 
execution  of  the  decree.  It  should  fix  the  time  of  sale,  and  the 
hour  of  the  day  at  which  the  sale  is  to  be  made  should  be  desig- 
nated ;  otherwise  if  a  reasonable  price  is  not  obtained  for  the 
property,  the  sale  will  be  set  aside.^ 

>  Miller  I'.  Case, Clarke  (N.  Y.)  Ch.395.  insufficient.     The  2rl  diiy  of  J.inuary  in- 
2  Smart  v.  Bement,  4  Abb.  (N.  Y.)  Dec.  eluded  the  astronomical  period  of  a  revolu- 
253.  tion  of  the  earth  ui)on  its  axis  twenty-four 
8  Snyder  t;  Stafford,  11  Paige  (N.  Y.),  hours.      2  Black.  Com.   141,  and   notes. 
71.  The   sale,    therefore,   mi<cht,   consistently 
*  Schcnck  v.  Conovcr,  13  N.  J.  Eq.  (2  with  the  notice,  have  been   made  imme- 
Beas.)  31  ;  Union  Ins.  Co.  v.  Van  Hens-  diately  before  midnif;ht  of  that  day,  and  if 
sclear,  4  Paige  (N.  Y),  85.  it  was  so  made  it  is  voidable.     The  object 
6  Ses-sions  v.  Peay,  23  Ark.  39.  of  a  pui)lic  sale  is,  by  fairness  and  compel!- 
•■'  Trustees  of  Schools  t-.  Snell,  19  HI.  tion,  to  dvolve  the  full  vidue  of  the  pro])- 
156.     The  decree  directed  the  master  to  erty  exposed,  and  produce  that  value  in 
sell,  upon  four  weeks'  notice  of  the  time,  the  form  of  money.     This  can,  as  a  gen- 
terms,  and  jdace  of  sale.   The  notice  .stated  cral  rule,  only  be  done  by  making  the  sale 
that  the  sale  would  be  made  on  the  2d  day  at  a  convenient  or  public  jdace,  accessible 
of  .JaTiuary.    "  The  proof  showed  that  the  to  bidders,  and  during  the  ordinary  i)UHi- 
property  wa.s  sold  at  an  enormous  sacri-  ncss  hours  of  the  day.     Tiie  notice  siiould 
tice.    The  notice  as  to  the  time  of  sale  waa  have  stated  the  hour  of  sale,  or  that  the 

505 


§  1G13.]       FORECLOSURE  SALES   UNDER   DECREE   OF   COURT. 

Wlioio  a  ik'cri'o  ilirt'cted  notico  of  a  sale  to  he  publisheil  in  a 
certain  paper,  which  was  after  the  decree  and  before  the  notice 
merged  in  another  paper  and  its  name  changed,  and  on  api)lica- 
tion  to  the  judge  at  chambers  ho  directed  the  sale  to  be  advertised 
in  the  paper  called  by  its  new  name,  the  publication  of  the  notice 
in  that  paper  in  accordance  with  such  order  was  held  valid  and 
suilicient.^ 

Generally  when  a  notice  is  required  to  be  published  once  in 
each  week  for  a  certain  number  of  weeks,  as,  for  instance,  three 
weeks,  it  is  not  necessary  that  the  time  between  tlie  first  and  last 
publications  should  be  three  full  weeks  ;  but  only  that  one  publi- 
cation should  be  made  on  some  day  of  each  week.^ 

The  notice  in  its  contents  should  be  drawn  in  fairness  both  to 
those  who  are  interested  in  the  property  and  to  those  who  may 
purchase  it,  and  should  neither  contain  uncalled  for  statements 
calculated  to  depreciate  the  price  unduly,^  nor  on  the  other  hand 
should  it  contain  statements  which  might  unduly  enhance  the 
price  or  mislead  the  purchaser.* 

1613.  Terms  of  sale.  —  The  officer  making  the  sale  should 
prepare  the  terms  of  sale,  a  copy  of  which,  with  a  description  of 
the  premises,  should  be  signed  by  the  purchaser,  though  it  is  held 
that  sales  made  under  deci'ees  of  court  are  not  within  the  statute 
of  frauds.^  The  auctioneer,  moreover,  being  the  agent  of  both 
parties,  his  memorandum  of  the  sale  is  binding  upon  the  pur- 
chaser ;  ^  but  his  memorandum  must  have  his  signature.'^  This 
contract,  however,  is  not  regarded  as  complete  until  the  officer's 
report  of  the  sale  has  been  confirmed.  The  terms  of  sale,  accord- 
ing to  the  usual  practice,  provide  that  a  deposit  shall  be  paid 
down  at  the  time  of  sale.  The  amount  of  this  varies  according  to 
the  circumstances  of  the  case,  but  is  generally  about  ten  per  cent. 

sale  would  be  made  between  certain  named  *  Veeder  v.  Fonda,  3  Paige  (N.  Y.),  94. 

hours  of  the  business  portion  of  the  day."  ^  Sugdeu's  Vendors,  148;  Atty.  Gen.  v. 

1  Sage  V.  Cent.  R.  R.  Co.  of  Iowa  (U.  Day,  1  Ves.  Sen.  221  ;  Fulton  v.  Moore,  25 
S.  Supreme  Ct.),  13  West.  Jur.  218.  Pa.  St.  468  ;  Halleck  v.  Guy,  9  Cal.  181. 

2  Sheldon  v.  Wright,  5  N.  Y.  497  ;  01-  See  §  1866. 

cott  V.  Robinson,  21  N.  Y.  150 ;  rev'g  20  ^  McComb  v.  Wright,  4  Johns.  (N.  T.) 

Barb.  148 ;  Wood  v.  Morehouse,  4.5  N.  Y.  Ch.  659  ;  liegeman  v.  Johnson,  35  Barb. 

369;   afPg  1  Lans.  405;   Chamberlain  v.  (N.  Y.)  200  ;  Nat.  Fire  Ins.  Co.  j;.  Loomis, 

Dempsey,  22  How.  (N.  Y.)  Pr.  356  ;  13  11  Paige  (N.  Y.),  431. 

Abb.  Pr.  421.  '  Bickncll  v.  Byrnes,  23  How.  (N.  Y.) 

8  Marsh  v.  Ridgway,  18  Abb.  (X.  Y.)  Pr.  486. 
Pr.  262. 

506 


MODE   AND   TERMS   OF  SALE.  [§  1614. 

of  the  purchase  money.  It  is  proper  to  keep  the  biddings  open 
till  the  deposit  is  made,  and  to  resume  the  sale  if  the  purchaser 
refuses  or  neglects  to  make  it.^  Under  special  circumstances  the 
sale  may  be  adjourned  to  another  day,  and  resumed  if  the  deposit 
is  not  made  in  the  mean  time.^ 

Where  a  purchaser  in  good  faith  left  the  place  of  sale  without 
complying  with  the  conditions  of  sale,  under  the  supposition  that 
he  had  until  the  next  day  to  do  this,  and  the  referee  then  and 
there  sold  the  premises  again  for  a  less  price,  the  court  ordered  a 
resale  upon  the  first  purchaser's  giving  security  to  bid  the  same 
amount  again. ^ 

At  a  sale  by  a  mortgage  trustee  late  in  the  afternoon  of  Satur- 
day, the  terras  of  which  were  announced  to  be  cash,  the  holder  of 
the  mortgage  notes  bid  810,070,  and  exhibited  his  certified  check 
upon  a  bank  for  810,000,  and  the  property  was  struck  off  to  him, 
although  another  person  bid  $2,938,  and  tendered  the  money  for 
his  bid.  On  Monday  the  highest  bidder  paid  over  the  money 
bid,  and  a  confirmation  of  the  sale  was  asked  for.  The  other 
bidder  contested  the  confirmation  ;  but  the  court  held  that  there 
had  been  a  substantial  compliance  with  the  terms  of  the  sale  and 
confirmed  it.*  Besides,  the  holder  of  the  mortgage  notes  may,  it 
seems,  comply  with  the  terms  of  the  sale  by  merely  indorsing  the 
amount  of  the  bid  on  the  notes.  The  formality  of  paying  over 
the  money  to  the  trustee  and  receiving  it  back  from  him  is  un- 
necessary.^ 

1614.  Deposit  required.  —  The  trustee  or  commissioner  ap- 
pointed to  conduct  the  sale  may  properly  require  that  the  pur- 
chaser shall  deposit  or  pay  some  portion  of  the  price  in  cash  at 
the  time  of  sale  ;  and  if  the  sum  be  not  so  large  as  reasonably  to 
deter  persons  from  bidding,  this  requirement  will  not  prevent  a 
ratification  of  the  sale.'''  But  a  requirement  of  the  immediate 
payment  in  cash  of  the  whole  purchase  money  at  the  time  of  sale 
is  an  oppressive  and  unjust  act  towards  the  mortgagor,  and  a 
court  of    equity  would    set   the  sale    aside.^      If   the    mortgagee 

>  Lents  V.  Cra'iyr,  13   How.  (N.  Y.)  Pr.  «  Md.   Perm.    Land   &   Build.  Soc.  of 

72  ;  2  Abb.  Pr.  294  ;  Sherwood  v.  Keude,  IJalt.  v.  Smith,  41    Md.  510.     Tho  dci)Osit 

8  Paige  (N.  Y.),  63.3.  rc(iuired  was  S300,  the  i)ro])erty  sellin),'  for 

«  Hoffman's  Ueferces,  230.  S-'i.OOO. 

•  Lenta  v.  Craig,  supra.  ">  Goldsmith  u.  Osborne,  I  Kdw.  (N.  Y.) 

♦  Jacobs  V.  Turpin,  S.'J  111.  424.  Ch.  560. 


*  Jacobs  V.  Turj)in,  mjira. 


607 


§  iniS.]       FORECLOSrRK   SALKS   UNOKR   DECREE   OF   COURT. 

witlunit   loavo    purohusos    at    sucli    u  sale,  lio  will  be  considered 
merely  a  mortgagee  in  possession  of  a  redeemable  estate. 

It  is  proper  to  provide  in  a  decree  that  in  case  any  other  person 
than  the  mortgagee  becomes  purchaser  at  the  sale,  he  shall  be  re- 
quired to  pay  at  once,  in  cash,  a  part  of  the  bid  as  earnest  money  ; 
and  no  objection  can  be  taken  that  the  same  requirement  is  not 
made  of  the  mortgagee.^ 

The  trustee  is  not  obliged  to  accept  the  highest  bidder  if  he 
has  reason  to  apprehend  that  he  has  not  the  ability  or  intention 
to  comply  with  the  terms  of  sale.  The  requirement  of  a  deposit 
is  a  reasonable  precaution  in  order  to  insure  the  completion  of  the 
sale,  or  to  cover  the  costs  and  expenses  of  it  should  it  fail  by  the 
purchaser's  default.^ 

1615.  Sale  on  credit.  —  Ordinarily,  except  with  the  consent  of 
both  parties,  the  sale  is  for  cash.  The  sheriff  has  no  authority  to 
sell  on  credit  in  the  absence  of  any  authority  given  in  the  deed.^ 
But  the  mortgagee  may  allow  time  to  the  pui'chaser,  and  whether 
this  arrangement  be  made  before  or  after  the  sale,  it  does  not  in- 
jure the  mortgagor,  and  is  no  ground  for  setting  aside  the  sale,  if 
the  credit  is  only  for  the  amount  due  to  him.*  But  he  cannot 
allow  credit  beyond  this,  except  with  the  consent  of  the  other 
incumbrancers  entitled  to  the  proceeds  of  sale.^  A  court  of 
equity  may  order  the  sale  to  be  made  on  credit  without  violat- 
ing the  obligation  of  the  mortgage  contract ;  ^  unless  the  mort- 
gage deed  expressly  provides  that  the  sale  shall  be  for  cash  ;  in 
which  case  the  requirement  is  obligatory  and  cannot  be  disre- 
garded by  the  court.'^  If  a  referee,  with  the  consent  of  the  par- 
ties in  interest,  sells  the  premises  on  time,  and  the  sale  is  reported 
and  confirmed,  it  will  not  be  set  aside  on  the  motion  of  a  creditor 
of  the  deceased  mortgagor.^ 

When  the  terms  of  sale  are  cash,  the  purchaser  must  pay  cash, 

1  Sage  V.  Cent.  R.  R.  Co.  of  Iowa,  13  6  stoney  v.  Shultz,  1  Hill  (S.  C.)  Ch. 
West.  Jur.  218.  465,  500;    Lowndes  v.  Chisholm,  2  Mc- 

2  Gray  v.  Veirs,  .3.3  Md.  18.  Cord  (S.  C.)  Ch.  455. 

*  Sauer  v.  Steinbaucr,  U  Wis.  70;  ^  Crenshaw  v.  Seigfried,  24  Gratt. 
Sedgwick  v.  Fish,  Ilopk.  (N.  Y.)  Ch.  594.  (Va.)  272.      See  to  the  contrary,  Mitchell 

*  Mahone   v.   Williams,   39   Ala.   202;  v.  McKinny,  6  Heisk.  (Tenn.)  83. 
Rhodes  v.  Dutcher,  6  Hun  (N.  Y.),  453.  ^  Khodes  v.   Dutcher,  6  Hun  (N.  Y.), 

'  And  see  Chaffraix  v.  Packard,  26  La.     453. 
Ann.  172. 

508 


SALE  IN   PARCELS.  [§  1616. 

and  cannot  comply  witli  such  terms  by  a  tender  of  the  note  of  the 
person  entitled  to  the  proceeds  of  the  sale.^ 

2.  Sale  in  Parcels. 
1616.  A  sale  in  parcels  may  be  required  by  statute  or  by 
court. ^  In  regulating  foreclosure  sales  in  equity,  several  states 
have  by  statute  provided  that  the  property  shall  be  sold  in  parcels 
when  practicable  ;  but  that  where  a  sale  of  the  whole  will  be  more 
beneficial  to  the  parties,  the  decree  shall  be  made  accordingly. 
But  courts  of  equity,  without  statutory  provisions,  apply  the 
same  rules  ;  these  provisions  in  fact  being  only  confirmatory  of 
principles  by  which  courts  of  equity  are  necessarily  governed  in 
suits  of  foreclosure. '^  When  the  decree  has  directed  the  sale  of 
the  whole  premises  for  the  payment  of  an  instalment  then  due, 
the  court  may  in  its  discretion  afterwards  regulate  the  execution 
of  the  decree  by  directing  a  sale  of  a  part  only,  if  the  premises 
are  divisible,  and  may,  upon  the  maturity  of  other  instalments, 
direct  further  sales.*  In  determining  whether  the  premises  shall 
be  sold  together  or  in  parcels,  the  court  should  direct  the  sale 
to  be  made  in  such  manner  as  that  the  parties  having  equities 
subject  to  the  mortgage  shall  not  be  prejudiced.^ 

It  may  sometimes  happen  that  even  when  the  mortgage  de- 
scribes the  property  in  separate  parcels,  and  the  amount  due  on 
the  mortgage  may  be  raised  by  a  sale  of  a  portion  of  them,  it  may 
be  necessary  for  the  proper  protection  of  the  rights  of  subsequent 
incumbrancers  that  the  property  should  be  sold  together ;  ^  and 
even  after  a  sale  of  a  part,  the  court,  still  having  jurisdiction  of 
the  parties  and  the  subject,  may,  for  the  protection  of  the  parties, 
make  a  supplementary  order  for  the  sale  of  the  remainder.^ 

If  an  order  to   sell  in  parcels  be  erroneous,  a  part}'  aggrieved 

1  Pursley   v.   Forth.   82   lU.  327.     See  Halst.  Ch.  (N.  J.)  9  ;  Wilincr  v.  Atlanta, 

Sage  i;.  Cent.  R.  II.  Co.  of  Iowa,  13  West.  &c.  R.  R.  Co.  2  Woods,  447. 

Jur.  218.  ^  Am.  Life  &  Fire  Ins.  &  Trust  Co.  v. 

'■'  As  to    sales  in  ])arcels  iindor  powers  Ryerson,  su/ira. 

in  niort(;af,'es  and  trust  deeds,  sec  chapter  ''  l)e  Forest  v.   Farley,  G2   N.   Y.  628; 

.\i,  division 'J.  Livingston   i;.    Miidrum,  .iii/ini ;    and  see 

'  Livingston  v.  Miidrum,  19  N.  Y.  440,  Ikekman   v.  Gil)bs,  8  J'aigo  (N.  Y.),  ."ill  ; 

443,  per  Seldcn,  .1. ;  Camphell  v.  Macomh,  Malcolm  v.  Allen,  49  N.  Y.  448  ;  Blazey  i;. 

4   Johns.    (N.    Y.)    Ch.    .O.'M.      See,    also,  Delias,  74  111.  299. 

Gregory  i".  I'urduc,  32  Ind.  4.0.3 ;  Magru-  "  Gregory  v.   Camj)l)cll,    Hi    Mow.    (N. 

der  t'.  Eggleston,  41   Miss.  284  ;  Am.  Life  Y.)  Pr.  417. 

&  Fire  Ina.   &  Trust  Co.  v.  Ryerson,   2  '  Livingston  r.  Miidrum,  19  N.  Y.  4^0; 

De  Forest  v.  Farley,  4  Ilun    (N.  Y.),  ri40. 
609 


§§  1(517,  U)18.]       FORECLOSURK    SALKS   UNDER    DECRKl':    01-    COURT. 

should  apply  to  havo  the  order  amomled  ;  it  is  not  a  defence  to 
the  suit  which  can  be  taken  advantage  of  by  plea,  answer,  or  de- 
murrer.^ 

1617.  When  wishes  of  the  mortgagor  to  be  followed.  — 
If  thfiv  be  no  cpiestion  that  the  property  is  ample  to  satisfy  the 
debt,  whether  sold  together  or  in  [)ar(;el.s,  and  there  are  no  sub- 
sequent equities  to  be  considered,  the  wishes  of  the  owner  in  re- 
spect to  the  mode  and  order  of  sale  should  be  followed.  The 
mortgagee  in  such  case  has  no  right  to  direct  whether  the  sale 
shall  be  in  one  way  or  the  other.^ 

But  in  a  case  where  the  security  was  doubtful,  and  the  property 
consisted  of  one  parcel,  which  after  the  making  of  the  mortgage 
was  laid  out  in  streets  and  building  lots,  the  mortgagee  objected 
to  a  sale  in  parcels,  unless  security  should  be  given  him,  because 
that  portion  of  the  land  laid  out  for  streets  would  not  be  included  ; 
and  a  sale  in  one  parcel  was  held  proper.^  A  mortgagee  who 
holds  a  mortgage  upon  the  entire  interest  in  a  lot  of  land  cannot 
be  called  upon  to  allow  a  sale  of  an  undivided  interest.  Even  if 
the  mortgage  be  made  by  joint-tenants,  who  desire  a  separate  sale 
of  undivided  interests  to  enable  them  more  easily  to  adjust  their 
rights  as  between  themselves.* 

1618.  Whether  the  property  shall  be  sold  entire  or  in  par- 
cels is  in  some  states  determined  by  the  court,  generally  through 
a  reference,  and  in  others  is  left  to  the  discretion  of  the  officer 
making  the  sale.^  When  determined  by  the  court,  the  order  of 
sale  sometimes  directs  the  form  and  manner  of  the  division,  and 
designates  the  part  first  to  be  sold,*^  or  more  properly  to  be  offered 
for  sale."  An  order  once  made  will  not  be  disturbed  without 
good  cause.^     When  by  statute  or  rule  of  court  the  officer  deter- 

1  Horner  v.  Corning,  28  N.  J.  Eq.254.  *  Frost  v.  Bevins,  3  Sandf.  (N.  Y.)  Ch. 

2  Walworth  v.  Farmers'  Loan  &  Trust     188. 

Co.  4  Sandf.  (N.  Y.)  Ch.  51  ;  Brown  v.  ^  See   statutory  regulations  of  the  dif- 

Frost,  1   Hoffm.  (N.  Y.)  41 ;  and  see  King  ferent  states. 

V.   Piatt,   37    N.    Y.    155;    Caufiniiiin   v.  «  Brugh  v.  Darst,  16  Ind.  79  ;  Bard  v. 

Sayre,  2  B.  Mod.  (Ky.)  202,  and  see  VVol-  Steele,  3  How.  (N.  Y.)  Pr.  110. 

cott   v.   Schenck,   23    How.    (N.    Y.)    Tr.  ^  Cissna  ?;.  Haines,  18  Ind.  496.      This 

3g5_  order  may  be  based  on  the  facts  shown  at 

3  Griswold  v.  Fowler,  24  Barb.  (N.  Y.)  the  hearing,  or  upon  the  con.sent  of  the 
135;  Laneu.  Conger,  10  Hun  (N.  Y.),  1,  parties,  although  there  be  no  foundation 
and  cases  cited ;  and  see  Ellsworth  v.  for  it  in  the  pleadings.  Cord  v.  South- 
Lockwood,   9    lb.  5,  48  ;  S.  C.  42  N.  Y.  well,  15  Wis.  211. 

gg  8  Vaughan  v.  Nims,  36  Mich.  297. 

610 


SALE  IN  PARCELS.  [§  1618. 

mines  upon  these  matters,  he  must  sell  in  parcels  in  just  the  same 
cases  in  which  the  statute  or  the  general  principles  of  equity  would 
make  this  course  obligator}'^  upon  the  court ;  and  if  he  makes  it 
otherwise,  the  court  will  set  it  aside. ^  A  statutory  provision 
directing  the  sale  of  only  so  much  as  will  pay  the  amount  due 
with  costs,  if  a  division  can  be  made,  is  peremptory  upon  the 
court,2  leaving  only  the  determination  of  the  question  whether 
such  division  can  be  made  without  injury  to  the  whole.  A  sale, 
however,  made  without  regard  to  this  provision  is  only  voidable, 
and  not  void.^ 

Without  any  statutory  requirement  a  court  of  equity  will  order 
a  sale  in  parcels  when  the  property  consists  of  distinct  tracts,  to- 
gether worth  much  more  than  the  debt  secured.*  The  mere  fact 
that  the  premises  are  a  meagre  security  and  are  going  to  ruin  and 
decay  does  not  justify  a  sale  of  the  entire  premises  for  a  debt  only 
partly  due.^  A  decree  for  such  a  sale  should  rest  upon  an  allega- 
tion and  finding  that  the  premises  cannot  be  divided  without  man- 
ifest injury  to  all  parties  concerned.^ 

The  court  having  ordered  that  the  property  shall  be  sold  either 
in  one  lot  or  in  separate  parcels,  the  parties  to  the  suit  cannot  by 
agreement  disregard  the  order,  and  make  a  valid  sale  in  any  other 
manner/  A  subsequent  party  in  interest  has  a  right  to  insist 
upon  a  strict  compliance  witii  the  decree  and  the  statute  in  the 
manner  of  the  sale.^ 

The  fact  that  several  parcels  mortgaged  together  had  previously 
been  held,  used,  and  conveyed  together  as  one  farm,  is  a  sufhcient 
reason  for  selling  the  whole  in  one  parcel ;  ^  and  on  the  other  hand, 
the  fact  that  separate  parcels  have  previously  been  held  and  used 
by  themselves,  and  are  evidently  capable  of  being  so  used  to  ad- 
vantage in  the  future,  affords  a  presumption  that  they  should  be 
sold  separately. ^'^ 

1  Waldo  V.  Williams,  3  111.  (2  Scnm.)         '^  Blnzey  v.  Delias,  supra. 

470  ;   White  v.  Watts,  18  lowu,  74  ;  Bcu-  '   Babcock  v.  Perry,  8  Wis.  277. 

ton  V.  Wood,  17  Ind.  200.     See,  also,  Lay  ^  F,inncrs'  &  Millers'  Hunk  v.  Luther, 

V.  Gibbons,  14  Iowa,  .377.  14  Wis.  'JG. 

2  Bank  of  Ogdensburg  v.  Arnold,  5  »  Andersons.  Austin,  34  Barb.  (N.  Y.) 
Paige  (N.  Y.),  38.  319.    See  Whitbeck  i'.  Kowe,  2.5  How.  (N. 

8  3  Wait's  Pnic.  376.  Y.)  Pr.  403. 

<  Kyerson  v.  Boorman,  7  N.  J.  Kq.  (3  »'>  Whitbcck  v.  Rowc,  2.'>  How.  (N.  Y.) 
Halst.)  167,  640.  Pr.  403. 


'  Blazey  v.  Deliua,  74  111.  299. 


611 


§§  1019,  l(j'20.]   FORI-XLOSURE  SALES  UNDKR  DECREE  OF  COURT. 

1619.  Sale  on  subsequent  default.  —  Tlio  statutes  of  several 
states  provide  that  when  a  portion  only  of  the  mortgage  debt  is 
due  a  portion  of  the  mortgaged  premises  may  be  sold  in  satisfac- 
tion of  *uch  part,  and  that  the  judgment  may  stand  as  security 
for  any  subsequent  default ;  and  that  upon  the  happening  of  such 
default  the  court  shall  order  a  second  sale  to  satisfy  such  default ; 
and  that  the  same  proceeding  may  be  had  as  often  as  a  default 
shall  happen.  The  subsequent  sale  is  made  by  order  of  court 
upon  the  plaintiff's  petition,  which  should  state  all  the  essential 
facts  upon  which  the  order  is  to  be  founded.  Notice  of  the  appli- 
cation must  be  given  to  all  persons  interested  who  have  appeared 
in  the  action.  The  order  for  sale  is  issued  as  in  other  cases,  and 
the  sale  is  made  in  the  same  manner. 

If  part  of  the  debt  be  not  due,  the  court  should  decree  a  sale 
of  so  much  of  the  premises  as  will  be  sufficient  to  pay  the  amount 
due,  and  a  further  order  of  sale  should  be  obtained  on  the  matur- 
ing of  the  unpaid  instalment  of  the  debt.  If  the  premises  can- 
not be  divided,  the  decree  should  provide  for  the  payment  of  the 
money  to  the  mortgagee  in  extinction  of  the  debt,  unless  some 
safe  course  more  beneficial  to  the  mortgagor  exists.^  Generally, 
a  sale  of  the  whole  estate,  when  there  is  no  order  for  a  sale  in  par- 
cels for  an  instalment  due  before  the  principal  amount,  exhausts 
the  remedy  of  the  creditor,  and  passes  a  clear  title  to  the  pur- 
chase r.^ 

4.    Order  of  Sale. 

1620.  When  the  mortgagor  has  made  successive  sales  of 
distinct  parcels  of  the  mortgaged  land  to  different  persons,  it  is 
generally  regarded  as  only  equitable  that  the  mortgagee,  when  he 
afterwards  proceeds  to  foreclose  his  mortgage,  should  be  required 
to  sell  in  the  first  place  such  part,  if  any,  as  the  mortgagor  still 
retains,  and  then  the  parts  that  have  been  sold  in  the  same  sub- 
divisions, but  beginning  with  the  parcel  last  sold  by  the  mort- 
gagor.^ This  rule  rests  upon  the  reason  that  where  the  mortgagor 
sells  a  part  of  the  mortgaged  premises  without  reference  to  the 
incumbrance,  it  is  right  between  him  and  the  purchaser  that  the 
part  still  held  by  the  mortgagor  shall  first  be  applied  to  the  pay- 

1  Walker  v.  Hallett,  1  Ala.  379;  Lcvert         '^  Poweshiek  Co.  v.  Dennison,  36  Iowa, 
V.  Kedwood,  9  Port.  (Ala.)  79  ;  Knapp  v.     244,  and  cases  there  cited. 
Burnham,  11  Paige  (N.  Y.),  330.  ^  gee  Contribution  to  redeem,  §§  1089- 

1092. 

512 


ORDER   OF   SALE. 


[§  16-21. 


ment  of  the  debt ;  ^  and  this  part  is  regarded  as  equitably  charged 
with  the  payment  of  the  debt ;  therefore,  when  he  afterwards  sells 
another  portion  of  that  remaining  in  his  possession,  the  second 
purchaser  simply  steps  into  the  shoes  of  the  mortgagor  as  regards 
this  land,  and  takes  it  charged  with  the  payment  of  the  mort- 
gage debt  as  between  him  and  the  purchaser  of  the  first  lot ;  but 
still  as  between  the  second  purchaser  and  the  mortgagor  it  is 
equitable  that  the  land  still  held  by  the  latter  should  pay  the  in- 
cumbrance. In  this  manner  the  equities  apply  to  successive  pur- 
chasers. This  order  of  equities  proceeds  upon  the  supposition 
that  each  subsequent  purchaser  has  actual  or  constructive  notice, 
by  the  record  of  the  deed  or  otherwise,  of  each  prior  conveyance 
by  the  mortgagor  of  portions  of  the  premises.^ 

1621.  Rule  of  inverse  order.  —  These  equitable  considerations 
have  led  to  the  adoption  of  the  rule  that  the  mortgagee  in  such 
case  shall  sell  the  mortgaged  land  in  the  inverse  order  of  its 
alienation  by  the  mortgagor ;  and  it  will  be  seen  by  the  eases  cited 
that  this  rule  has  been  generally  adopted.^ 

Sumner  v.  "Waugh,  56  111.  531  ;  Dodds  v. 
Snyder,  44  111.  53  ;  Lock  v.  Fulford,  52 
111.166;  Mattesoni;.  Thomas,41  111.  110; 
Marshall  v.  Moore,  36  111.  321.  Indiana  : 
McCuUum  V.  Turpie,  32  Ind.  146  ;  Day  v. 
Patterson,  18  Ind.  114;  Aiken  v.  Bruen, 
21  Ind.  137.  See,  also,  Cissna  i'.  Haines, 
18  Ind.  496;  "Williams  v.  Perry,  20  Ind. 
437.  Maine  :  Sheperd  v.  Adams,  32  Me. 
63  ;  Holden  v.  Pike,  24  Me.  427.  Massa- 
chusetts :  George  v.  Wood,  9  Allen,  80  ; 
George  i-.  Kent,  7  Allen,  16;  Kilborn  r- 
Robbins,  8  Allen,  466  ;  Chase  v.  Wood- 
bury, 6  Gush.  143;  Allen  v.  "Clark,  17 
Pick.  47.  See  Parkman  v.  Welch,  19 
Pick.  231  ;  Beard  v.  Fitzgerald,  105  Mass. 
134.  Michigan:  Sager  v.  Tiipper,  35 
Mich.  134;  Cooper  v.  Bigly,  13  Mich.  463; 
Mason  v.  Payne,  Walk.  459  ;  McKinncy 
V.  Miller,  19  Mich.  142  ;  Ireland  v.  Wool- 
man,  15  Mich.  253;  Briggs  v.  Kaufman, 
2  Mich,  N.  P.  160.  Minnesota:  Johnson 
V.  Williams,  4  Minn.  260,  268.  New 
Hampshire  :  Brown  v.  Simons,  44  N.  II. 
475.  New  Jersey:  Hill  v.  McCarier,  27 
N.J.  Vai.  41  ;  Mount  v.  Potts,  23  N.  J. 
E(i.  188  ;  Shannon  v.  Marsclis,  1  N.  J. 
Eq.  (Sax.)  413  ;  Britton  v.  Updike,  3  N.  J. 
513 


1  Hoy  V.  Bramhall,  19  N.  J.  Eq.  563  ; 
Gaskill  V.  Sine,  13  N.  J.  Eq.  400 ;  Mes- 
servey  v.  Barelli,  2  Hill  (S.  C.)  Ch.  567  ; 
Lock  V.  Fulford,  52  111.  166.  This  equity 
is  recognized  even  where  it  is  held  that 
there  is  no  equity  of  one  purchaser  over 
another.  Blight  i.  Banks,  6  Mon.  (Ky.) 
197;  Dickey  v.  Thompson,  8  B.  Mon. 
(Ky.)  314.  See,  also,  Mevey's  Appeal,  4 
Pa.  St.  80 ;  Hodgdon  v.  Naglee,  5  Watts 
&  S.  (Pa.)  218;  Blackledge  i^.  Nelson,  2 
Dev.  Eq.  (N.  C.)  65. 

2  For  cases  giving  the  reason  for  the 
rule,  see  Weatherby  v.  Slack,  16  N.  J.  Eq. 
491  ;  WikoflF  v.  Davis,  4  N.  J.  Eq.  (3 
Green)  224  ;  Ingalls  v.  Morgan,  10  N.  Y. 
178;  Lock  i-.  Fulford,  52  111.  166;  Matte- 
son  V.  Thomas,  41  III.  110;  Iglehart  v. 
Crane,  42  III.  261 ;  Tomi)kin3  v.  Wilt- 
berger,  56  III.  385 ;  Stanly  v.  Stocks,  1 
Dev.  (N.  C.)  Eq.  314. 

'  This  rule  is  adopted  in,  — 

Alabama:  .Mobile,  &c.  Co.  v.  Hudcr,  35 
A1.1.  71.'J.  Florida:  Hitch  y.  Eichelbcrger, 
13  Fla.  169.  Georgia:  Gumming  v.  Gum- 
ming, 3  Ga.  460.  Illinois  :  N'iles  v.  Har- 
mon, 80  111.  396  ;  Tompkins  r.  Wiltberger, 
56  III.  385  ;  Iglehart  v.  Crane,  42  111.  261  ; 
VOL.  It.  33 


§  10) ill.]       FORECLOSURE   SALES    UNDER    DECREE   OF   COURT. 


For  the  roason  that  tliia  vulo,  whether  establishtnl  by  statute  or 
V\v  decisions  of  state  courts,  is  a  rule  of  property,  the  courts  of  the 
United  States  sitting  in  any  state  in  which  this  rule  is  established 
will  follow  it.^ 

This  rule  and  the  question  of  its  adoi)tiou  has  been  very  fre- 
quently before  the  American  courts  ;  and  the  principle  of  the 
rule  has  also  been  frequently  stated  by  the  English  and  Irish 
courts.  "  If  afterwards  the  mortgagor,"  says  Lord  Plunket, 
"  sells  a  portion  of  his  equity  of  redemption  for  valuable  or  good 
consideration,  the  entire  residue  undisposed  of  by  him  is  applica- 
ble, in  the  first  instance,  to  the  discharge  of  the  mortgage,  and  in 
ease  of  the  bond  fide  purchaser;  and  it  is  contrary  to  any  principle 
of  justice  to  say  that  a  person  afterward  purchasing  fx'om  that 
mortgagor  shall  be  in  a  better  situation  than  the  mortgagor  him- 
self in  respect  to  any  of  his  rights."  ^     In  the  same  case  when  it 

Eq.  (2  Greeu)  125;  Wikoff  i;.  Davis,  4  j;.  Wjillace,  3  Rawle,  109.  Donley  w.  Hays, 
N.  J.  Eq.  (3  Green)  224  ;  Winters  v.  Hen- 
derson, 6  N.'J.  Eq.  (2  Halst.)  31;  Gaskill 
V.  Sine,  13  N.  J.  Eq.  (2  Beas.)  400; 
Weatherby  v.  Slack,  16  N.  J.  Eq.  491 ; 
Keene  v.  IMuun,  16  N.  J.  Eq.  398;  Mut. 
Life  Ins.  Co.  of  N.  Y.  v.  Boughrum,  24  N. 
J.  Eq.  44  ;  Mount  v.  Potts,  23  N.  J.  Eq. 
188.  New  York:  Clowes  v.  Dickinson,  5 
Johns.  Ch.  240;  James  v.  Hubbard,  1 
Paige,  234 ;  Jenkins  v.  Freyer,  4  Paige, 
53  ;  Guion  v.  Knapp,  6  Paige,  35  ;  Patty 
V.  Pease,  8  Paige,  277 ;  Skeel  v.  Spraker, 
8  Paige,  182;  Kellogg  v.  Rand,  11  Paige, 
59  ;  Ferguson  v.  Kimball,  3  Barb.  Ch.  616  ; 
"Weaver  v.  Toogood,  1  Barb.  238  ;  Howard 
Ins.  Co.  V.  Halsey,  4  Sandf.  565 ;  Kath- 
boue  V.  Clark,  9  Paige,  649  ;  Stuyvesant 
V.  Hall,  2  Barb.  Ch.  151  ;  Farmers'  Loan 
&  Trust  Co.  V.  Maltby,  8  Paige,  361  ;  La 
Farge  Fire  Ins.  Co.  v.  Bell,  22  Barb.  54 ; 
£jr  parte  Merriam,  4  Den.  254;  McDon- 
ald V.  Whitney,  2  N.  Y.  Weekly  Dig.  529; 
Crafts  V.  Aspinwall,  2  N.  Y.  289  ;  Howard 
Ins.  Co.  V.  Halsey,  8  N.  Y.  271.  Ohio: 
Cora.  Bk.  of  Lake  Erie  v.  W.  R.  Bank,  11 
Ohio,  444  ;  Cary  v.  Folsom,  14  Ohio,  365. 
But  see  Green  v.  Raraage,  18  Ohio,  428. 
Pennsylvania:  The  doctrine  of  contribu- 
tion pro  rata  adopted  in  the  earlier  deci- 
sions in  Pennsylvania.  Nailer  v.  Stanley, 
10  S.  &  R.  450  ;  Presbyterian  Corporation 

614 


17  S.  &  R.  400,  has  been  overruled  in  the 
later  case  of  Cowden's  Estate,  1  Pa.  St. 
267.  See  Carpenter  v.  Koons,  20  Pa.  St. 
222.     South  Carolina :    Norton  v.  Lewis, 

3  S.  C.  25  ;  Stoney  i-.  Shultz,  1  Hill,  465 ; 
Meng  V.  Houser,  13  Rich.  Eq.  210.  Texas  : 
Miller  v.  Rogers,  49  Tex.  398  ;  Rippctoe 
V.  ])wyer,  49  Tox.  498.  Vermont :  Root 
V.  Collins,  34  Vt.  173  ;  Lyman  i'.  Lyman, 
32  Vt.  79.     Virginia:  Hcnkle  v.  AUstadt, 

4  Gratt.  284  ;  Jones  v.  Myriek,  8  Gratt. 
179;  Conrad  v.  Harrison,  3  Leigh,  532. 
Wisconsin  :  Worth  v.  Hill,  14  Wis.  559 ; 
Wisconsin  v.  Titus,  17  Wis.  241  ;  Ogden 
V.  Glidden,  9  Wis.  46 ;  Aiken  v.  Milwaukee 
&  St.  Paul  R.  R.  Co.  37  111.  469. 

1  Orvis  V.  Powell  (Supreme  Court,  Oct. 
T.  1878),  8  Cent.  L.  J.  74. 

2  In  Hartley  v.  O'Flaherty,  Lloyd  & 
Goold  Cases  temp.  Plunket,  216.  See, 
also,  for  illustrations  of  this  rule  Hamil- 
ton V.  Royse,  2  Schoales  &  Lef  roy,  326 ; 
Averall  v.  Wade,  Lloyd  &  Goold,  temp. 
Sugden,  252;  Harbert's  case,  3  Coke,  11. 

Mr.  Justice  Story  questioned  the  cor- 
rectness of  the  doctrine,  that  in  case  of 
successive  sales  of  property  subject  to 
mortgage,  the  parcel  last  sold  is  liable  for 
the  debt  in  exoneration  of  that  sold  next 
before  it ;  or  in  other  words,  that  the  par- 
cels are  to  be  charged  in  the  reverse  order 


ORDER  OF  SALE.  [§  1622. 

was  previously  before  tlie  court,  Lord  Chancellor  Hart  said  that 
as  between  the  mortgagor  "  and  the  persons  purchasing  from  him, 
the  contributory  fund  must  be  so  marshalled  as  to  make  his  re- 
maining property  first  applicable ;  and  if  that  is  insufficient,  I 
think  the  portion  of  the  last  purchaser  must  be  applicable  before 
that  of  any  prior  purchaser."  ^ 

The  rule  applies  where  the  mortgagor  has  conveyed  the  prem- 
ises in  different  parcels,  and  the  grantees  of  these  parcels  again 
convey  them  in  parcels,  the  grantees  of  the  latter  parcels  being 
liable  under  this  rule  for  the  share  of  the  mortgage  chargeable 
upon  their  grantor's  share  of  the  premises,  in  the  inverse  order  of 
conveyance  to  them.^ 

The  rule  will  not,  however,  be  applied  in  any  case  where  its 
application  would  work  injustice.^ 

1622.  This  rule  is  generally  held  to  apply  to  subsequent 
mortgages  of  the  equity  of  redemption  as  well  as  to  absolute  con- 
veyances of  it.*  In  New  Jersey,  however,  it  is  held  tliat  as  be- 
tween the  holders  of  mortgages  of  different  and  distinct  parts  of 
the  incumbered  land,  each  is  bound  to  bear  his  proportion  accord- 
ing to  the  value  of  the  parts  ;  and  that  the  rule  does  not  apply  as 
between  them.^  The  entire  premises  may  be  decreed  to  be  sold, 
and  the  proceeds  applied  to  the  payment  of  the  mortgages  and 
other  incumbrances,  according  to  their  priority,  although  sufficient 
to  satisfy  the  first  mortgage  be  obtained  by  a  sale  of  part  of  the 
premises.^ 

of  the   transfers  :    the    parcels   last   sold  lish  cases  in  support  of  this  view.     The 

being  first  charged  to  their  full  value,  and  question  was  considered  in  Barnes  v.  Rac- 

80  backwards,  until  the  debt  is  fully  j)aid.  ster,  1   Youngo  &  C.  Ch.  401,  whore  the 

He  says  :  "  But  there  seems  great  reason  Vice-Chancellor,    Sir   L.   Shailwcll,   in   a 

to  doubt  whether  this  last  position  is  main-  case  where  there  were  several  successive 

tainable  upon  jirinciplc  ;  for  as  between  tlic  mortgages,  instead  of  throwing  the  whole 

subsequent  purchasers  or  incumbrancers,  burden  of  the  prior  incumbrances  ujion  the 

each  trusting   to  his  own   security  upon  jand  conveyed  to  the  last  mortgagee,  made 

the  separate  estate  mortgaged  to  him,  it  it  a  ratable  charge  on  the  whole  estate, 

is  difficult  to  perceive  that  cither  has,  in  '  Bcatty,  61,  79. 

consc(|uence    thereof,   any   superiority   of  ^  Ililes   v.  Coult,  .'iO  N.  J.  Kq. — ;  18 

right  or  equity  over  the  other;    on    the  Am.  L.  Keg.  (N.  Y.)  203. 

contrary,  there   seems  strong  ground  to  "  Hill  v.  McCarter,  27  N.  J.  Ivj.  41. 

contend  that  the  original  incumbrance  or  *  Dodds  v.  Snyder,  44  111.  .Vj ;  Steerc  v. 

lien  ought  to   bo    borne    ratably  between  Childs,  l.")  Hun  (N.  Y.),  .511. 

them,  according    to   the   relative  value  of  '  rancoast  i'   Duval,  20  N.  J.  Kq.  445. 

the  estates."     2  Story's  Kq.  Juris.  §  12.13.  "  Ely  v.  Perrine,  2  N.  J.  Eq.  {I  Green) 

He  claimed  the  authority  of  the  Eng-  396. 

615 


§§  1G28,  lti-4.]   FORECLOSUKK  SALKS  UNDER  DKCRKE  OF  COURT. 

WluMi,  howeviT,  a  portion  of  the  movt<jj:i<jjotl  proniisos  lias  been 
mortgaged  again,  and  siibscijuiMitly  the  balance  has  boon  con- 
veyed absolutely,  inasimich  as  the  mortgage  is  only  a  qualified 
alienation,  and  the  nu)rtgagor  still  has  an  interest  in  the  prop- 
erty, that  part  is  first  sold  ;  aiul  if  there  is  any  surplus  beyond 
the  amount  required  to  satisfy  the  second  mortgage,  that  is,  if  the 
equity  of  redemption  is  of  any  value,  that  is  applied  in  payment 
of  the  first  mortgage  before  resorting  to  the  portion  of  the  prem- 
ises conveyed  absolutely.^  But  after  this  if  the  property  is  not 
of  sufficient  value  to  pay  both  mortgages,  as  between  the  second 
mortgagee  and  the  subsequent  purchaser,  it  would  seem  that  in 
the  distribution  of  proceeds  the  former  should  be  entitled  to  any 
surplus  remaining  after  the  payment  of  the  first  mortgage. 

If  the  mortgagor  alienate  a  portion  of  the  mortgaged  premises 
and  afterwards  mortgages  another  portion,  the  second  mortgagee 
cannot  claim  that  the  part  alienated  before  the  giving  of  his  mort- 
gage shall  be  first  sold ;  but  the  rule  of  inverse  order  of  alienation 
will  appl}^  against  him.^ 

1623.  When  portions  of  the  property  have  been  sold  un- 
der judgment,  those  portions  stand  in  the  order  of  sale  in  a  fore- 
closure suit  as  of  the  times  when  the  judgments  respectively  be- 
come liens,  and  not  as  of  the  times  when  the  conveyances  under 
such  sales  were  executed  by  the  sheriff."^  In  Pennsylvania,  how- 
ever, it  is  held  that  thie  rule  does  not  apply  at  all  to  sales  under- 
judgments  ;  the  purchaser  at  such  sales  having  no  claim  upon 
the  mortgagor,  or  any  one  else,  to  pay  off  the  mortgage  for  their 
relief.'* 

1624.  The  record  of  a  subsequent  deed  is  not,  however, 
notice  to  the  prior  mortgagee.  He  is  not  required  to  search 
the  records  from  time  to  time  to  see  whether  other  incumbrances 
have  been  put  upon  it.^     A  distinct  and  actual  notice  is  necessary 

1  Kellogg  V.  Hand,  11    Paige   (N.  Y.),  Marselis,  1  N.J.  Eq.  (Sax.)  413;  Birnie 

59.  V.  Main,  29  Ark.  591  ;  James  v.  Brown,  11 

-  Sager  t;.  Tupper,  35  Mich.  134.  Mich.  25;    Carter  v.  Neal,  24  Ga.  346; 

8  Woods  V.  Spalding,  45  Barb.  (N.  Y.)  Taylor  v.  Maris,  5  Rawle  (Pa.),  51  ;  Ritch 

602.  V.  Eichelberger,  13  Fla.   169;   Brown  v. 

*  Carpenter  v.  Koons,  20  Pa.  St.  222.  Simons,  44  N.  II.  475  ;  Lyman  v.  Lyman, 

6  Greswold    v.   Marshan,    2    Ch.   Cas.  32  Vt.  79 ;  Chase  v.  Woodbury,  6  Cush. 

170;  Cheesebrough  v.  Millard,  1   Johns.  143. 

(N.  Y.)   Ch.  409;    Stuyvesant  v.   Home,         In  James   v.  Brown,   supra,  the  court 

1   Sandf.  (N.  Y.)  Ch.  419;  Howard  Ins.  say  :"  It  is  the  duty  of  a  subsequent  mort- 

Co.  V.  Halsey,  8  N.  Y.  271 ;  Shannon  v.  gagee,  if  he  intends  to  claim  any  rights 

516 


ORDER    OF   SALE.  [§  1625. 

to  affect  the  rights  of  the  mortgagee  in  this  respect,  and  oblige  him 
to  foreclose  with  reference  to  the  subsequent  order  of  alienation. 
The  record  is  not  even  constructive  notice  to  him.  Only  subse- 
quent purchasers  and  incumbrancers  are  within  the  purview  of  the 
registry  laws.  A  person  interested  in  the  equity  wishing  to  pro- 
tect himself  must  bring  home  to  the  mortgagee  actual  notice  of  his 
equities.^  If  he  is  not  a  party  to  the  foreclosure  suit,  and  has  no 
opportunity  to  present  his  claims  there,  he  may  file  a  bill  against 
the  mortgagee  and  the  other  subsequent  purchasers,  and  obtain 
a  stay  of  the  sale  until  the  respective  equities  can  be  adjusted. 
After  a  sale  it  is  too  late  to  assert  his  rights. 

In  like  manner  when  there  has  been  a  partition  of  land,  of 
which  an  undivided  half  was  mortgaged,  that  part  of  the  land  set 
off  to  the  mortgagor  should  be  first  sold ;  and  if  the  officer,  having 
been  offered  the  whole  amount  of  the  debt  for  that  part,  proceeds 
to  sell  an  undivided  half  of  the  whole,  the  sale  will  be  set  aside.^ 
And  so  if  a  portion  of  the  mortgaged  land  has  been  sold  to  pay 
the  mortgagor's  debts  after  his  decease,  the  residue  of  the  premises 
remaining  in  his  heirs  must  be  first  resorted  to  for  the  satisfaction 
of  the  mortgage.^ 

1625.  But  this  rule  does  not  apply  in  cases  where  the  parties 
have  by  agreement  in  their  deed  cliarged  the  mortgage  upon  the 
land  in  a  different  manner;  as  where  by  the  terms  of  sale  of  a 
part  of  the  premises  the  mortgage  is  made  a  common  charge 
upon  the  whole  premises,  or  the  part  conveyed  is  subjected  to  a 
proportionate  part   of  the  incumbrance.*     In  such  cases,  if  there 

throuf;h  the  fir^t  mortgage,  or  that  may  (N.  Y.)  Ch.  414;  Gouverneur  u.  Lynch, 

affect  the  rightH  of  the  mortgagee  under  2  Paige  (N.  Y.),  300. 

it,  to  give  the  holder  thereof  notice  of  his  2  Q„aw  v.  Lameraux,  36  Wis.  626. 

mortgatre,  that  the  first  mortgagee  may  '  Moore  v.  Chandler,  59  111.  466. 

act  with  his  own  iindcrstandingly.     If  he  *  Mutual   Life   Ins.    Co.   of    N.   Y.   v. 

docs  not,  and  the  first  mortgagee  docs  with  Boughrum,  24  N.  .1.  Eq.  44  ;  I'anconst  v. 

his  mortgage  what  it  was  lawful  for  him  Duval,  26  N.  J.  Kq.  445  ;  Hoy  v.  Bram- 

to   do   before   the   second   mortgage   was  hall,   19  N.  J.  Eq.  56,3.     In  this  case  the 

given,  without  knowledge  of  its  existence,  conveyance  was  made,  "  suhject,  however, 

the    injury   is    the   result  of    the  second  to  the  payment  by  said  grantee  of  all  ex- 


mortgagee's  negligence  in  not  giving  no 
tice." 

'  Mattcson  ?;.  Thomas,  41  111.  110 
Hoy  V.  Rramhall.  19  N.  J.  Eq.  56.3 
Hlair  v.  Ward,  2  Stockt.  (N.  J.)  119 
King  V.  McVirkar,  .3  Sandf.  (N,  Y.)  Ch 
192;   Cheescbrough  v.  Millard,   1  Johns 


isting  liens  upon  said  premises."  The 
effect  of  this  was  to  subject  the  lands  con- 
veyed to  the  payment  of  a  pro]»ortionato 
part  of  the  mortgage.  The  court  say,  it 
may  bo  that  the  language  is  not  sufficient 
to  create  a  covenant  on  which  a  strictly  per- 
gonal liability  mav  be  based  ;  but  it  clearly 

'517 


$   I(j-Ji).]       KDKKCLOSUHIC   SAl.KS    UNDKK   DKCHKK   OF   COURT. 

be  no  specific  agreement  as  to  tlio  proportion  which  each  part  is 
to  boar,  contribution  must  be  made  according  to  the  rehitive  vakie 
of  each  part. 

Wlien  a  ]iurchaser  of  a  part  of  the  premises  has  agreed  to  as- 
sume tlie  whole  or  a  part  of  the  mortgage  debt  as  a  part  of  the 
consideration  he  pays  for  the  land,  and  subsequently  sells  it  to  an- 
other, this  grantee  having  notice  of  such  agreement  stands  in  no 
better  position  than  the  first  purchaser  as  regards  any  equity 
against  the  mortgagor.^  And  so  where  the  whole  of  a  tract  of 
land  was  subject  to  a  mortgage  and  a  portion  of  it  was  conveyed, 
and  afterwards  the  remainder  was  conveyed  to  the  same  pur- 
chaser subject  to  the  payment  of  the  mortgage,  and  the  purchaser 
subsequently  made  mortgages  of  the  different  parcels,  upon  a 
foreclosure  of  the  first  named  mortgage  the  assumption  of  this 
mortgage  in  the  deed  of  the  second  parcel  was  regarded  as  oper- 
ating between  the  parties  as  an  agreement  that  the  land  therein 
named  should  be  the  primary  fund  for  the  payment  of  the  debt, 
and  that  the  mortgage  should  be  enforced  upon  that  land  in  the 
first  instance,  and  upon  the  lot  first  conveyed  in  the  case  of  a  defi- 
ciency ;  and  therefore  it  was  held  that  the  order  of  sale  was  not 
determined  by  the  order  of  alienation  by  the  purchaser.^ 

1626.  Contribution  according  to  value.  —  The  rule  that  the 
sale  shall  take  place  in  the  inverse  order  of  alienation  is  rejected 
in  the  states  of  lowa^  and  Kentucky.^  Instead  of  this  they  have 
adopted  the  rule  that  the  several  owners  shall  contribute  accord- 
ing to  the  value  of  their  portions  of  the  property.  If  the  pur- 
chasers have  made   improvements   upon   their  lots,  the  enhanced 

makes  the  part  conveyed  subject  to  its  *  Poston  v.  Eubank,  3  J.  J.  Marsh.  44 ; 
proper  proportion  of  the  incumbrances,  so  Campbell  v.  Johnston,  4  Dana,  182 ;  Dickey 
as  to  relieve  to  that  extent  that  part  re-  v.  Thompson,  8  B.  Mon.  313.  In  the  lat- 
tained  by  the  mortgagor,  and  that  there-  ter  case  this  rule  is  discussed  at  length, 
fore  both  parts  must  contribute  according  and  the  earlier  decisions  approved  and 
to  their  relative  values.  To  same  effect  aflirmed,  though  coutrary  to  the  later  de- 
see  Briscoe  v.  Power,  47  111.  447  ;  Halsey  cisons  in  other  states.  It  was  considered 
V.  Reed,  9  Paige  (N.  Y.),  446;  Torrey  v.  more  equitable  that  the  burden  should  be 
Bank  of  Orleans,  lb.  649 ;  Warren  v.  equalized  according  to  the  value  of  the 
Boynton,  2  Barb.  (N.  Y.)  13.  different    parcels,   than    that    the    whole 

1  Engle  V.  Haines,  5  N.  J.  Eq.  (1  Halst.)  should  be  thrown  upon  the  last  purchaser 
186;  Ross  v.  Haines,  lb.  632.                     '  of  the  last  lot.     See,  also.  Hunt  v.  Mc- 

2  Steere  v.  Childs,  15  Hun  (N.  Y.),  .511.  Connell,  1  T.  B.  Mon.  (Ky.)  219. 

8  Bates  V.  Ruddick,  2  Iowa,  423  ;  Mas-  As  to  North  Carolina,  see  Stanly  v. 
sie  V.  Wilson,  16  Iowa,  391  Barrey  v.  Stocks,  1  Dev.  Eq.  314,  where  the  ques- 
Mjers,  28  Iowa,  427.  tion  was  raised. 

618 


ORDER  OF  SALE.  [§§  1627,  1628. 

value  resulting  from  the  improvements  is  not  included  in  the  val- 
uation of  the  property  under  this  rule.  In  these  states,  therefore, 
the  mortgaged  lands  may  be  sold  under  the  decree  of  foreclosure, 
without  reference  to  the  mortgagee's  knowledge  that  they  have 
been  sold  in  parcels  at  different  times  to  different  persons. 

1627.  Valuation  to  be  made  as  of  what  time.  —  When  con- 
tribution is  to  be  made  under  the  rule  adopted  by  these  states, 
that  the  proportion  is  to  be  determined  by  the  relative  value  of 
the  different  parcels,  whether  the  valuation  should  be  taken  at 
the  date  of  the  mortgage,  at  the  time  of  foreclosure,  or  at  the  date 
of  the  several  purchases,  is  not  perhaps  very  material,  as  the  fluc- 
tuation of  price  would  generally  be  about  equal  for  the  different 
parcels.^  The  practice  in  different  courts  has  not  been  uniform. 
Nor  indeed  has  the  practice  of  the  same  court  always  been  the 
same  in  this  regard. 

When  the  mortgaged  premises  have  been  conveyed  in  distinct 
parcels,  and  the  subsequent  grantees  or  mortgagees  of  the  parts 
are  bound  to  contribute  in  proportion  to  the  value  of  their  parts, 
they  are  entitled  to  have  the  premises  sold  in  parcels,  provided  it 
can  be  done  without  prejudice  to  tlie  rights  of  the  mortgagee.^ 

1628.  As  a  general  rule  if  a  mortgagee  has  other  security 
for  his  demand,  and  another  creditor  has  a  lien  upon  one  of  the 
funds  only,  the  former  must  resort  in  the  first  place  to  that  secu- 
rity upon  which  no  one  other  than  his  debtor  has  any  claim.^ 
This  rule  is  subject  to  the  qualification  that  it  shall  not  be  applied 

1  Valuation  at  the  date  of  the  mortgnge  has  two  real  estates  mortgages  both  to 
was  adopted  in  Stevens  v.  Cooper,  1  Johns,  one  person,  and  afterwards  only  one  es- 
(N.  Y.)  Ch.  425.  Valuation  at  the  date  tate  to  a  second  mortgagee,  who  had  no 
of  the  mortgage  was  fixed  up<jn  in  Mor-  notice  of  the  first ;  the  court,  in  order  to 
rison  r.  Beckwith,  4  Mon.  (Ky.)  76;  but  relieve  the  second  mortgagee,  have  directed 
in  Burk  v.  Chrisman,  3  B.  Mon.  .50,  the  the  first  to  take  his  satisfaction  out  of  that 
same  court  sustained  a  valuation  at  the  estate  only  which  is  not  in  mortgage  to 
date  of  the  several  purchases  ;  and  in  the  second  mortgagee,  if  that  is  sufficient 
Dickey  v.  Thompson,  8  B.  Mon.  (Ky.)  to  satisfy  the  first  mortgage,  in  order  to 
312,  seemed  t<)  ajjprove  of  a  valuation  at  make  room  for  the  second  mortgagee." 
the  time  of  foreclosure.  Sec.  also,   Wright  v.  Nutt,  1  H.  Bl.  150; 

2  Pancoast  r.  Duval,  26  N.  J.  Ivj.  445  ;  Swift  v.  Conboy,  12  Iowa,  444;  Ram- 
Stcller.  Andrews,  19  N.  J.  Eq.  409.  sey's    Appeal,  2  Watts,   228;    Fowler  v. 

»  Story's  Eq.  Juris.  §§  559,  560.     This  Barks<lalc,  Harper's  Eq.  (S.  C.)  164  ;  Terry 

principle  is  illustrated  by  Lord  Ilardwicke  v.  Hosell,  32  Ark.  478  ;  Warwick  v.  Ely, 

in  Laucy  r.  Duke  and  Duchess  of  Athol,  29  N.J.  Eq.  82;    Scott  r.   Webster,  44 

2  Atk.  441,  446  :  "  Suppose  a  person  who  Wis.  185  ;  6  Reporter,  2S7. 

510 


§  10i!9.]   FORF.CLOSUKE  SALES  UNDER  DECREE  OF  COURT. 

where  it  would  work  any  injustice  to  the  prior  creditor,^  or  to  any 
other  person  interested  in  the  securities  ;  as  where  the  mortgagee's 
riglit  to  satisfy  his  claim  out  of  both  funds  would  be  in  any  way 
impaired  :  or  where  there  is  any  doubt  of  the  sufficiency  of  the 
fund  upon  which  the  junior  creditor  has  no  claim ;  or  where  the 
prior  creditor  is  not  willing  to  run  the  risk  of  obtaining  satisfaction 
out  of  that  fund  ;  or  where  that  fund  is  of  a  dubious  character,  or 
is  one  which  may  involve  liim  in  litigation  to  I'ealize.  "  But  it  is 
the  ordinary  case,"  says  Lord  Eldon,  "  to  say,  a  person  having 
two  funds  shall  not  by  his  election  disappoint  the  party  having 
only  one  fund  and  equity,  to  satisfy  both,  will  throw  him  who 
has  two  funds,  upon  that  which  can  be  affected  by  him  only,  to 
the  intent  that  the  only  fund  to  which  the  other  has  access  may 
remain  clear  to  him."^ 

In  accordance  with  these  restrictions  of  the  rule,  where  a  cred- 
itor was  secured  by  a  mortgage  of  land  and  slaves,  and  the  land 
was  afterwards  sold  by  the  mortgagor,  and  one  of  the  slaves  was 
sold  by  the  sheriff  under  executions  issued  part  before  and  part 
after  the  mortgage,  though  the  sum  received  by  the  sheriff  was 
sufficient  to  satisfy  the  senior  executions  and  the  balance  of  the 
mortgage  debt,  the  mortgagee  was  not  compelled  to  resort  to  this 
fund  because  he  might  thereby  incur  the  expense  and  risk  of  liti- 
gation ;  but  was  allowed  to  foreclose  the  mortgage  upon  the  land 
to  satisfy  his  demand.^  The  mortgagee  might  lose  the  very  ben- 
efit sought  by  having  a  double  security,  if  he  were  compelled  to 
incur  the  risk  of  delay  or  loss  by  being  referred  for  his  payment 
to  security  he  deemed  the  more  uncertain.  The  subsequent  pur- 
chaser of  the  mortgaged  property  takes  it  with  full  knowledge 
of  the  incumbrance,  and  it  is  more  equitable  that  he  should  be 
obliged  to  pay  the  mortgage  debt  and  be  subrogated  to  the  other 
security  of  the  mortgagee  than  that  the  latter  should  be  prejudiced. 

1629.  So  also  when  two  persons  have  mortgages  upon  the 
same  piece  of  property,  which  is  insufficient  to  satisfy  both,  and 
one  of  them  lias  a  lien  for  his  debt  upon  other  property,  equity 
requires  that  he  shall  exhaust  the  latter  before  resorting  to  the 
mortgaged  property.*     In  like  manner  when  two  persons,  to  se- 

1  Slater  v.  Breese,  3C  Mich.  77.  «  Walker  v.  Covar,  2  S.  C.  16. 

2  Aldrich  v.  Cooper,  8  Ves.'  382,  395  ;  <  Trowbridge  v.  Harlcston,  Walk.  Ch. 
and  see  Averall  v.  Wade,  Lloyd  &  Goold  (Mich.)  185;  Sibley  v.  Baker,  23  Mich, 
temp.  Sugden,  252,  and  notes.  312. 

620 


ORDER   OF   SALE.  [§§  1630,  1631. 

cure  the  debt  of  one  of  them,  have  jointly  mortgaged  three  par- 
cels of  land,  one  of  which  they  own  jointly,  while  each  of  them 
owns  one  of  the  others  individually,  the  decree  should  order  the 
sale,  first  of  the  portion  of  the  mortgagor  equitably  bound  to  pay 
the  debt,  and  next  of  the  joint  parcel.^ 

And  where  a  principal  debtor  and  his  surety  have  both  mort- 
gaged their  lands  to  secure  a  debt,  the  lands  of  the  principal  debtor 
are  to  be  first  sold,  and  those  of  the  surety  only  for  the  deficiency .^ 

1630.  If  one  holds  two  mortgages  on  different  parcels  of 
land  to  secure  the  same  debt  in  the  absence  of  any  equities  in  sub- 
sequent purchasers,  he  may  foreclose  either  one  without  the  other; 
but  if  there  are  subsequent  purchasers,  the  equitable  rules  already 
spoken  of  must  be  observed  ;  ^  and  if  the  mortgages  cover  in  part 
the  same  land,  and  are  both  foreclosed  together,  the  land  included 
in  the  first  mortgage  should  be  exhausted  before  recourse  is  had 
to  the  second.* 

1631.  If  the  mortgagee,  having  notice  of  successive  aliena- 
tions of  parts  of  the  mortgaged  premises,  has  released  a  part 
which  is  previously  liable  for  the  payment  of  the  debt,  he  cannot 
charge  the  other  portions  of  the  premises  with  the  payment  of  it 
without  first  deducting  the  value  of  the  part  released.^  If  that 
value  equals  the  entire  debt,  he  must  bear  the  loss,  as  he  cannot 
then  resort  to  the  lot  first  sold ;  if  it  is  equal  to  a  part  of  the  debt 
only,  he  may  resort  to  the  lot  sold  for  the  deficiency.  But  if  the 
mortgagor  had  no  title  to  the  lot  released,  or  it  could  in  any  way 

1  Ogden  V.  Glidden,  9  Wis.  46.  Taylor  v.  Maris,  5  Rawlc  (Pa.),  51  ;  James 

2  Drake  v.  Bray,  Nixon's  Dig.  614.  v.  Brown,  11  Mich.  25  ;  Harrison  v.  Guc- 
8  Burpee  v.  Parker,  24  Vt.  567.  rin,  27  N.  J.  Eq.  219  ;  Miller  v.  Rogers,  49 
*  Raun  V.  Reynolds,  11  Cal.  14.  Tex.  398. 

6  See  §731;  Reilly  i;.  Mayer,  1   Beas.  In  iKlchart  v.  Crane,  42  111.  261,   the 

(N.J.)  55;  Van  Orden  u.  Johnson,  14  N.  court  say:  "From    this   rule,  as   to   the 

J.  Eq.  376  ;  Mickle  v.  Ramho,  Saxton  (N.  order  in  which  mort},'agcd  jnemises  arc  to 

J.),  .501  ;  Shannon  v.  Marselis,  lb.  413  ;  be  charged,  it  follows  as  a  corollary,  that, 

Mount  V.  Potts,  23  N.  J.  E([.  188  ;  Hoy  v.  if  the  mortgagee  with  actual  notice  of  the 

Bramhall,  19  N.  J.  Eq.  563  ;  Blair  i-.  Ward,  facts  releases  from  the  mortgage  that  por- 

2  Stockt.  (N.  J.)  119;  Gaskill  v.  Sine,  13  tion  of  the  premises  primarily  liable,  ho 

N.  J.  Eq.  400;  Guion  v.  Knapp,  6  Paige  thereby  relea.ses  pro  innto  the  portion  sec- 

(N.  y.),  35;  Stevens  v.  Cooper,  1  Johns,  ondarily  liable.      When  the  mortgage  is 

(N.  Y.)  Ch.  425;  Stuyvcsant  v.  Hone,  1  sought  to  be  enforced  against  the  owner 

Sandf.  (N.  Y.)  Cii.  419  ;  Patty  v.  Pease,  8  of  the  latter,  he  can  claim  an  abatement 

Paige  (N.  Y.),  277  ;  Duester  v.  McCamus,  of  his  liability  to  the  extent  of  the  value 

14  Wis.  .307  ;  Birnie  r.  Main,  29  Ark.  591  ;  of  that  portion  which  should  have  made 

Parkman  v.  Welch.  19  Pick.  (Mass.)  231  ;  the  primary  fund." 


George  i-.  W(jod,   9   Allen   (Mass.),   80; 


521 


§  1632.]       FORECLOSURE   SALES   UNDER    DECREE   OF   COURT. 

bo  slu>\vn  that  tlu'  owners  of  the  other  lots  were,  not  prejudieecl  by 
the  reh'ase,  this  rule  would  not  apply.^  In  such  cases,  in  order  to 
ascertain  the  value  of  the  difTerent  parts  of  the  land  and  the 
amount  due  on  the  mortgage,  a  reference  is  ordered.-  A  mort- 
gagee, however,  does  not,  by  a  partial  release  without  consideration, 
impair  his  right  to  enforce  his  mortgage  against  the  remainder  of 
the  property,  unless  he  had  actual  notice  of  the  previous  transfer 
of  the  remainder  or  of  some  portion  of  it  by  the  mortgagor.  The 
same  rule  about  notice  already  stated  applies  equally  liere.  A 
reference  in  his  release  to  a  conveyance  of  another  part  of  the  land 
by  the  mortgagor  is,  however,  constructive  notice  of  it.'^ 

If  the  mortgagee  having  also  personal  security  for  his  demand 
by  his  fault  and  negligence  loses  this,  a  purchaser  of  the  land  may 
compel  him  to  deduct  from  the  mortgage  debt  the  value  of  the 
securit}'  lost,  so  that  the  mortgage  can  be  foreclosed  only  for  the 
balance.*  • 

1632.  Homestead.  —  Tlie  fact  that  the  mortgage  covers  a 
homestead  and  also  other  property,  which  is  subject  to  a  subse- 
quent judgment  lien,  gives  the  debtor  no  right  to  have  the  latter 
property  first  applied  to  the  payment  of  the  mortgage  debt,  so 
that  he  may  save  his  homestead.^  The  fact  that  part  of  the  prop- 
erty is  a  homestead  does  not  change  the  equity  rule  that  a  party 
having  security  on  two  funds  shall  first  exhaust  his  remedy  upon 
the  fund  he  alone  is  secured  upon,  when  there  is  another  party 
having  security  on  the  other.^  In  a  case  where  the  mortgage 
embraced  the  homestead  and  a  business  lot,  and  the  homestead 
had  been  sold  to  satisfy  the  mortgage  debt  and  there  were  judg- 
ment liens  upon  the  business  lot,  the  court  declined  to  set  aside 
the  foreclosure  sale,  Chief  Justice  Dixon  saying:  "  However  just 
and  reasonable  it  might  be  for  the  court  to  compel  a  sale  of  the 
business  lot  first,  and  thus  save  the  homestead,  if  that  were  the 
only  question,  yet  we  think  the  mortgagor's  equity  to  hold  his 
homestead  fully  countervailed  by  the  equities  of  his  creditors,  who 
must  look  to  the  business  lot  for  their  satisfaction,  and  who  have 
no  lien  upon  the  homestead.     Until  the  legislature  shall  have  de- 

1  Taylor  v.  Short,  27  Iowa,  361.  Wis.  503  ;  Searle  v.  Chapman,  121  Mass. 

2  Ga.skill  u.  Sine,  13  N.  J.  Eq.  400.  19;  Chapman  u.  Lester,  12  Kans.  592. 
2  Booth  V.  Swezey,  8  N.  Y.  276.  Contra,  in  California,  McLaughlin  v.  Hart, 
*  Mooily  V.  Haseiden,  1  S.  C.  129.  46  Cal.  C3'j.  See  Dodds  v.  Snyder  44  IlL 
s  §§  731,  1286,   where  the  reasons  for     53. 

the  rule  are  stated  ;  White  v.  Polleys,  20         «  In  re  Santhoff  &  Olsou,  7  Biss.  167. 

522 


CONDUCT    OF   SALE.  [§§  1633,  1634. 

clared  the  obligation  to  preserve  the  homestead  superior  to  that  of 
paying  one's  honest  debts,  we  must  hold  the  equity  of  the  creditor 
at  least  equal  to  that  of  the  debtor  in  cases  like  this."^ 

4.   Conduct  of  Sale. 

1633.  The  officer  conducting  the  sale  should  be  present. 
The  sale  is  made  by  public  auction  to  the  highest  bidder,  unless 
otherwise  ordered  by  the  court.  It  is  conducted  by  the  officer 
designated  by  the  decree  or  by  statute,^  though  he  may  employ 
an  auctioneer  to  act  for  him  in  his  presence.^  His  presence  is  re- 
quired in  order  that  the  parties  interested  may  have  the  benefit 
of  the  discretion  and  judgment  which  he  should  exercise  for  their 
benefit,  in  order  to  obtain  a  fair  price  for  the  property.  There  is 
often  special  occasion  for  the  exercise  of  a  reasonable  discretion  in 
the  matter  of  adjournments  ;  for  unexpected  occurrences  may  at 
the  last  moment  threaten  a  sacrifice  of  the  property,  unless  he  ex- 
ercises his  right  to  adjourn  the  sale  to  another  day.  This  is  one 
of  the  duties  which  he  cannot  properly  delegate  to  another.  If 
a  sale  be  made  in  the  absence  of  the  sheriff,  whose  duty  it  was  to 
conduct  it  by  his  agent  or  bailiff  informally  appointed,  and  the 
sheriff  executes  a  deed  to  the  purchaser,  the  deed  will  pass  the 
title,  and  will  be  good  in  a  collateral  proceeding  as  the  act  of  an 
officer  de  facto,  but  will  be  set  aside  on  a  direct  application  made 
in  the  course  of  the  same  proceeding.*  It  has  even  been  held 
that  a  sale  by  one  loan  commissioner  in  the  absence  of  his  as- 
sociate is  irregular,  though  the  deed  be  executed  by  both.^ 

The  property  must  be  offered  to  the  highest  bidder,  and  bids  re- 
ceived so  long  as  they  are  offered  ;  and  after  waiting  a  reasonable 
time  for  another,  and  none  being  made,  it  should  be  struck  off  to 
the  highest  biddi'i-." 

1634.  Adjournment."  —  If  at  the  time  and  place  of  sale  there 
be  no  bidder  present  other  than  the  mortgagee  or  his  attorney,  it 
is  the  duty  of  the  auctioneer  or  officer  making  the  sale  to  adjourn 

»  Jones  V.  Dow,  18  Wis.  241.  v.  Elder,  5  N.  Y.  (1   Sold.)  144;  Tell  i;. 

2  Heyer  v.  Denves,    2  Johns.   (N.  Y.)  Ulmar,  21  Barb.  (N.  Y.)  500.     Sto,  how- 

Ch.  1.^4.  ever,  King  v.  Stow,  0  Jolms.  (N.  Y.)  Ch. 

«  Blossom  V.  U.  K.  Co.  3  Wall.  205.  323. 

*  Meyer  v.  Patterson,  28  N.  J.  Eq.  249;  «  Bicknell  v.  Byrnes,  23  How.  (N.  Y.) 

S.  C.  Hub.  nom.  Meyer  v.  Bishop,  27  Ih.  Pr.  486;  mid  sec  May  v.  May,  11  Paige 

141.  (N.  Y.),  201. 

'  York  V.  Allen,  .30  N.  Y.  104  ;  Olmsted  '  Sec  chapter  xl,  division  10. 

623 


§  IG;^.]      FORECLOSURE   SALES   UNDER   DECREE  OF   COURT. 

it.'  Tlio  application  for  an  ailjoiirnnient  usually  conies  from  some 
one  or  more  of  the  parties  interested ;  but  it  may  be  the  duty  of 
the  officer  to  adjourn  the  sale  without  the  request  of  any  one,  and 
even  against  the  wish  of  a  party  in  interest.^  The  officer  making 
the  sale  may  properly  adjourn  it  by  direction  of  the  complainant's 
solicitor,  for  the  purpose  of  enabling  the  mortgagors  to  pay  the 
debt ;  and  he  may  make  several  short  adjournments  for  this  pur- 
pose, and  finally,  upon  payment,  may  discontinue  the  sale  alto- 
getlier.3  He  has  a  discretionary  power  in  this  respect ;  but  if  he 
exercises  it  in  an  arbitrary  or  unreasonable  manner,  the  sale  will 
be  set  aside  and  a  resale  ordered.*  The  adjourned  day  of  sale 
should  be  announced  at  the  time  of  the  adjournment,^  but  if  this 
cannot  be  done  on  account  of  an  injunction,  a  general  adjourn- 
ment may  be  made,  and  the  day  advertised  afterwards.^  If  the 
first  day  is  by  mistake  set  upon  a  Sunday,  the  postponement  may 
be  effected  by  an  advertisement  before  the  day  arrives."  If  the 
day  fixed  for  sale  be  afterwards  appointed  a  legal  holiday,  an  ad- 
journment should  be  made.  In  such  case  the  advertisement  is  not 
rendered  invalid.^ 

If  the  day  of  sale  be  fixed  in  the  announcement  of  the  adjourn- 
ment, and  other  notice  of  the  adjourned  sale  name  a  different  day, 
the  sale  will  be  irregular.^ 

The  adjournment  may  be  made  to  a  different  place  than  that 
named  in  the  original  notice,  unless  the  place  be  fixed  by  law  or 
by  the  decree;  ^^  though  a  sale  adjourned  to  a  place  different  from 
that  named  in  the  decree  has  been  confirmed. ^^ 

It  is  the  better  and  safer  practice  to  advertise  the  adjourned 
sale,  though  this  is  not  always  essential  to  the  legality  of  the 
sale.^^     If  an  adjournment  be  made  at  the  request  of  the  owner  of 

1  Strong  V.  Catton,  1  Wis.  471.  «  La  Farge  v.  Van  Wagencn,  14  How. 

2  Astor  V.  Romayne,  1   Johns.  (N.  Y.)     (N.  Y.)  Pr.  54. 

Ch.  .310;    McGown  v.  Sandford,  9  Paige  ">  Wcstgate  w.  Handlin,  7  How.  (N.  Y.) 

(N.  Y.),  2  290.    See,  also,  Russell  v.  Rich-  Pr.  372. 

ards,  11  Me.  371;    Tinkom   v.   Purdy,   5  »  White  r.  Zust,  28  N.  J.  Eq.  107. 

Johns.  (N.  Y.)  345  ;  Richards  v.  Holmes,  ^  Miller  v.  Hull,  4  Den.  (N.  Y.)  104. 

18  How.  143,  147  ;  Ward  v.  James,  8  Hun  i'  See  Richards  v.  Holmes,  18  How.  144, 

(N.  Y.),  526.  147. 

»  Blossom  V.  R.  Co.  3  Wall.  196.  "  Farmers'  Bank  of  Md.  v.  Clarke,  28 

*  Breese  i;.  Busby,  13  How.  (N.  Y.)  Pr.  Md.  145. 

485.  12  Stearns  v.    Welsh,    7    Hun   (N.   Y.), 

'  La  Farge  v.  Van  Wagenen,  14  How.  676.     This   is   by   rule  of  court  in  New 

(N.  Y.)  Pr.  54.  York. 
624 


CONDUCT    OF   SALE.  [§§  1635,  1636. 

the  equity  of  redemption,  under  an  agreement  to  allow  commis- 
sions and  expenses  of  the  postponed  sale,  these  are  a  personal 
claim  against  him,  and  cannot  be  taken  out  of  the  proceeds  of  the 
sale  to  the  detriment  of  any  one  else.^ 

1635.  A  sale  may  be  kept  open  so  as  to  enable  the  mortgagee 
or  officer  making  the  sale  to  put  up  the  property  again,  in  case 
the  person  bidding  it  off  fails  to  make  good  his  bid.  Notifying 
the  persons  brought  together  by  the  published  notice  that  the 
sale  would  thus  be  held  open  is  all  that  is  requisite  ;  and  a  sale 
made  in  accordance  with  such  notification  will  not  be  set  aside  at 
the  instance  of  the  first  bidder,  in  the  absence  of  equities,  and 
merely  for  the  reason  that  it  was  made  after  the  time  when  it  was 
advertised  to  take  place.^ 

1636.  The  objection  to  the  mortgagee's  buying  at  the  sale, 
when  the  mortgaged  property  is  sold  under  judicial  process,  has 
much  less  force  than  it  has  when  the  sale  is  made  under  a  power  j^ 
for  the  judicial  sale  is  made  by  an  officer  designated  by  the  court 
or  by  statute  for  the  purpose,  and  the  mortgagee  for  whose  ben- 
efit it  is  made  has  not  the  actual  control  and  management  of  the 
sale,  as  he  has  in  case  of  a  sale  under  a  power.  Accordingly  in 
those  states  in  which  the  sale  under  a  power  is  taken  out  of  the 
hands  of  the  mortgagee  and  placed  under  the  direction  of  a  sheriff 
or  other  officer,  the  restriction  against  the  mortgagee's  buying  is 
at  the  same  time  generally  removed.* 

Where  the  authority  is  not  given  to  the  mortgagee  by  statute 
or  by  judicial  construction  to  buy  at  a  sale  under  decree  of  court 
upon  his  own  mortgage,  it  is  sometimes  provided  in  the  decree 
that  he  may  become  a  purchaser,  and  he  may  generally  obtain 
leave  to  bid  and  purchase  for  himself."  It  is  generally  for  the  in- 
terest of  the  mortgagor  and  others  interested  in  the  equity  of  re- 
demption that  he  should  have  the  right  to  buy,  as  it  often  liap- 
pens  that  he  will  pay  more  for  the  property  than  any  one  else  will 
pay ;  and  it  is  often  equally  important  to  the  mortgagee  to  have 

1  Neptune  Ina.  Co.  i;.  Dorsey,  3  Md.  .350  ;  Doniville  v.  Beiiiii{,'toii,  2  Y.  &  C. 
Ch.  .134.  724.    * 

2  Isbell  V.  Kcnyon,  33  Mich.  63;  and  In  New  York,  by  rule  of  court,  a  pro- 
see  Baring  v.  Moore,  ."i  Puigc  (N.  Y.),  48.  vision  is  inserted  in  every  decree  for  tlie 

•  See  §§  1876-1886.  sale  of  mortgaged  premises,  unless  other- 

*  See  §  1882.  wise  specially   ordered,  that  the  plaintiflF 
'  See  Conger  v.  Ring,  11   IJatb.  (N.  Y.)     may  become  the  purchaser.     Ten  Eyck  v. 

Craig,  02  N.  Y.  400,421,  per  Andrews,  J. 

626 


§   U);>T.]       FOHi:CL0SUKE   SALKS    UNDKR   DF.CUEK   OF   COUHT. 

this  power,  in  order  to  prevent  a  sacrifice  of  his  own  interests.^ 
But  undi'r  the  technical  rule  against  his  purchasing,  no  one  not 
interested  in  the  equity  of  redemption  can  take  advantage  of  his 
pui'chasing ;  -  and  a  person  entitled  to  do  so  can  only  redeem. 

A  mortgagee  who  becomes  a  purchaser  under  a  decree  made 
upon  his  i»wn  complaint  is  not  allowed  to  object  to  the  title  on  the 
ground  that  persons  in  possession  of  the  property  without  title 
were  not  made  parties.^  And  even  if  there  be  a  (U^fect  in  the  pro- 
ceedings he  is  supposed  to  have  full  notice  of  it,  though  actual 
notice  be  not  shown,  and  is  not  allowed  to  object  on  account  of 
it.*  The  plaintiff's  attorney  may  bid  off  the  property,  and  the 
presumption  is  that  he  is  making  the  purchase  on  his  own  ac- 
count.^ 

When  the  mortgagee  has  the  right  to  purchase,  the  mortgage 
debt  is  not  extinguished  for  any  unsatisfied  balance,  any  more 
than  it  is  in  case  a  stranger  becomes  the  purchaser.^ 

A  purchaser  of  land  subject  to  a  mortgage  which  he  has  agreed 
to  assume  and  pay  is  not  precluded  from  purchasing  at  a  sale 
under  the  mortgage  within  the  rule  against  mortgagee's  buying.'^ 

5.   Confirmation  of  Sale. 

1637.  Uhtil  confirmed  by  the  court  the  sale  is  incomplete. 
The  acceptance  of  the  bid  confers  no  title  upon  the  purchaser, 
and  not  even  any  absolute  right  to  have  the  purchase  completed. 
He  is  nothing  more  than  a  preferred  bidder,  or  proposer  for  the 
purchase,  subject  to  the  sanction  of  the  court  afterwards.^  When 
this  is  given  it  relates  back  to  the  time  of  sale,  and  carries  the 
title  from  the  delivery  of  the  deed.  In  a  few  states  the  foreclos- 
ure sale  is  made  by  a  special  writ  of  execution  issued  to  the 
sheriff,  and  no  report  of  the  sale  or  confirmation  of  it  is  required. 
Such  a  sale  is  not  purely  a  judicial  sale,  which  is  founded  upon 
proceedings  in  equity,  or  upon  an    equitable   action.     In  those 

1  See    Holcomb   i-.  Ilolcomb,  11    N.  J.  6  Edwards  v.  Sanders,  6  S.  C.  316. 

Eq.  (3  Stockt.)  281.  ^  McNeill  v.  McNeill,  36  Ala.  109. 

'■^  Edmondson  i'.  Welsh,  27  Ala.  .578.  ^  2  Daniel's  Ch.  1454  ;  Busey  v.  Hardin, 

«  Ostrom  V.  McCanu,  21   IIow.  (N.  Y.)  2  B.  Mon.  (Ky.)  407  ;  Hay's  Appeal,  51 

Pr.  431.  Pa.  St.  61  ;  Young  v.  Keogh,  11  111.  642  ; 

*  Boyd  V.  Ellis,  11  Iowa,  97.  Gowan  v.  Jones,  18  Miss.  (10  S.  &  M.) 

6  Chappell   I'.   Dann,   21  Barb.  (N.  Y.)  164;  Mills  v.  Ralston,  10  Kans.  200;  Al- 

17;    and   see   Squier   v.   Norris,   1    Lans.  len  y,  Poole,  54  Miss.  323. 

(N.  Y.)  282.     But  sec  §§  1878,  1879. 
526 


CONFIRMATION   OF   SALE.  [§  1638. 

states  in  which  foreclosure  is  obtained  by  a  suit  at  law,  as  by  scire 
facias,  or  by  proceedings  of  a  mixed  nature,  the  sale  is  either  min- 
isterial or  only  quasi  judicial. 

The  confirmation  cures  all  mere  irregularities  in  the  proceed- 
ings to  obtain  the  sale,  and  in  the  conduct  of  it ;  but  does  not 
make  good  a  defect  arising  from  want  of  jurisdiction  of  the  court 
either  of  the  case  or  of  any  party  interested  ;  and  moreover,  fraud, 
accident,  or  mistake,  which  will  invalidate  a  contract  generally, 
are  grounds  for  setting  aside  the  sale  after  confirmation. ^  If,  how- 
ever, the  deed  be  executed  and  delivered  without  confirmation, 
lono-  continued  possession  under  it  will  make  the  title  valid.^ 

It  is  no  ground  for  refusing  to  order  a  resale  that  the  purchaser 
before  confirmation  has  conveyed  the  land,  or  that  there  is  a  sur- 
plus which  is  claimed  by  judgment  creditors.^  Neither  the  pur- 
chaser nor  any  one  else  has  any  right  to  regard  the  sale  as  con- 
cluded until  it  is  confirmed. 

Confirmation  cannot  be  objected  to  on  the  ground  that  there 
would  be  no  default  in  the  payment  of  interest,  if  the  sum  re- 
tained as  a  bonus  by  the  mortgagee  at  the  time  of  the  loan  were 
ai)plied  to  the  payment  of  the  legal  interest  upon  the  sura  actually 
advanced.  Usury  cannot  be  taken  advantage  of  in  this  way. 
"  In  determining  whether  there  has  been  a  default  the  court  must 
be  governed  by  the  terms  of  the  mortgage  itself,  irrespective  of 
the  question  of  usury.  After  a  default  thus  made,  a  sale  or  its 
ratification  can  be  prevented  on  this  ground  only  by  paying,  or  at 
least  offering  to  pay,  the  sum  actually  loaned,  with  legal  interest."  ^ 
The  usurious  interest,  when  once  paid,  may  be  recovered  back  by 
an  action  at  law,  or  in  equity  may  be  eliminated  from  the  claim, 
upon  the  objection  of  others  whose  rights  its  allowance  would  in- 
juriously affect.^ 

1638.  It  rests  wholly  in  the  discretion  of  the  court  whether 
the  sale  shall  be  confirmed  or  not,  and  this  power  will  be  exer- 
cised prudently  and  fairly  in   the  interi-st  of  all  concerned.     The 

>  The  statemcut    in    the   text    is   fully  -  Gownn  v.   Jones,  10  S.  &  M.  (iMiss.) 

illustrated   by    Mr.  Justice    Beckwith,    in  104. 

Dills  V.  Jasper,  33  III.  262;    though  Mr.  »  Wolcott  f.  SchtMuk,  2.-5  How.  (N.  Y.) 

Justice    (yftton,    in    the   previous   case    of  Pr.  385. 

Jackson  v.  Warren,  32   111.   331,  hiul  as-  *  Smith  y.  Myers,  41  Mil.  42.'),  434. 

8erte<l  that  a  valiil  an<l  hindinj;  contract  ^  lb. 
is  nimlc  wluiU  the  hammer  falls,  aud  that 
the  purchaser  is  entitled  to  a  deed. 

627 


§  lOo'.K]       FORKCLOSURK   SALKS    UNDER    nKCRF.F.   OF   COURT. 

court  should  bo  sutislioil  that  the  sale  has  been  made  in  accord- 
ance with  the  requirements  of  the  decree ;  ^  and  especially  that 
notice  of  the  sale  was  given  as  required.^  The  confirmation  is 
usually  made  by  a  formal  order.  It  is  the  practice,  generally, 
for  the  master  or  other  oilicer  who  makes  the  sale  to  fully  com- 
plete it  so  far  as  he  can,  by  delivery  of  the  deed  and  payment  of 
the  pi'oceeds,  before  obtaining  the  order  of  court ;  but  confirmation 
nuiy  be  made  in  the  first  place  of  the  sale,  and  afterwards  of  the 
deed.  In  England  it  is  the  practice  to  withhold  the  deed  until 
the  final  order  confirming  the  sale  is  made  absolute.^  One  whose 
bill  is  not  accepted  by  the  ofiicer,  though  it  is  the  highest  made, 
cannot  insist  upon  a  confirmation  to  himself  of  the  sale.* 

Confirmation  of  the  sale  can  only  be  regularly  made  after 
notice  of  the  motion  for  it  to  the  parties  adversely  interested  that 
they  may  show  cause  against  it.^  "  Notice  of  the  motion  is  given 
to  the  solicitors  in  the  cause,  and  confirmation  nisi  is  ordered  by 
the  court,  —  to  become  absolute  in  a  time  stated,  unless  cause  is 
shown  against  it.  Then,  unless  the  purchaser  calls  for  an  inves- 
tigation of  the  title  by  the  master,  it  is  the  master's  privilege  and 
duty  to  draw  the  title  for  the  purchaser,  reciting  in  it  the  decree 
for  sale,  his  approval  of  it,  and  the  confirmation  by  the  court  of 
the  sale,  in  the  manner  that  such  confirmation  has  been  or- 
dered." ^ 

The  usual  order  nisi^  that  the  sale  stand  confirmed  unless  cause 
to  the  contrary  be  shown  within  a  specified  time,  is  a  sufficient 
order  of  confirmation  of  a  sale.'^  An  appeal  may  be  taken  from 
such  order.^ 

1639.  A  resale  may  be  asked  for  by  any  one  whose  rights  are 
injuriously  affected  by  the  sale,  although  he  is  not  a  party  to  the 
suit.'-*  The  circumstances  of  each  jjarticular  case  must  be  inquired 
into  and  acted  upou.^*^*  The  most  general  principle  on  which  the 
courts  act  in  setting  aside  the  sale  and  ordering  a  new  one  is  that 

1  Moore  v.  Titman,  33  111.  358.  ^  Torrans  v.  Hicks,  32  Mich.  307. 

2  Perrien  v.  Fetters,  3a  Micli.  233.  «  Detroit  F.  &  M.  Ins.  Co.  v.  llenz,  33 
8  Ex  parte  Minor,  11  Ves.  559.                    Mich.  298  ;  Koehler  v.  Ball,  2  Kas.  160. 

♦  Blossom  V.  R.  Co.  3  Wall.  196.  »  Kellogg  v.  Howell,  62  Barb.  (N.  Y.) 

6  Branch  Bank  at  Mobile  v.   Hunt,  8  280. 

Ala.  876.  ^''  Lefevre  v.  Laraway,  22  Barb.  (N.  Y.) 

0  Williamson  v.  Borry,  8  How,  495-546,  167. 
per  Wayne,  Justice. 

528 


CONFIRMATION   OF   SALE.  [§§  1640,  1641. 

equity  will  not  allow  any  unfairness  or  fraud,  either  on  the  part  of 
the  purchaser  ^  or  of  any  other  person  connected  with  the  sale.'-^ 

The  application  may  be  made  by  motion  to  the  court,  at  any 
time  before  the  report  of  the  sale  has  been  confirmed,  notice  of 
which  should  be  given  to  every  person  who  has  appeared  in  the 
cause,  or  who  has  any  interest  in  the  sale,  as  well  as  to  the  pur- 
chaser.^ A  sale  may,  however,  under  special  circumstances  be  set 
aside  after  confirmation,  although  more  and  stronger  evidence  of 
fraud  or  misconduct,  or  other  grounds  for  invalidating  the  sale,  is 
then  required.* 

1640.  Before  confirmation  of  the  sale  the  court  may  open 
the  biddings  at  the  instance  of  one  who  is  bound  to  make  good 
any  deficiency,  on  his  offering  a  large  advance  upon  the  bid  of 
the  mortgagee,  who  was  the  purchaser,  and  paying  the  costs  of 
the  former  sale.^  It  has  been  the  practice  in  England  to  open 
biddings  upon  the  offer  of  a  reasonable  advance  beyond  the  last 
bid ;  6  but  this  practice  has  not  prevailed  very  much  here,'^  and 
its  utility  has  been  doubted  or  denied  quite  generally.^  The 
opening  of  biddings,  instead  of  being  a  practice  here,  is  rather 
something  that  is  allowed  in  special  cases ;  and  generally  some- 
thing more  than  inadequacy  of  price  must  be  shown,  unless  this 
be  very  gross. 

In  Alabama,  when  the  property  has  been  purchased  by  the 
mortgagee,  a  resale  will  be  ordered  before  confirmation  if  an  ad- 
vance of  not  less  than  ten  per  cent,  on  the  former  sale  is  offered 
and  the  mon(?y  is  deposited  in  court.^ 

1641.  Great  inadequacy  of  price  may  be  urged  with  force 
against  a  confirmation  of  the  sale,  because  this  is  incomplete  and 

1  Murdock  v.  Empie,  19  How.  (N.  Y.)  Vice-Chancellor  Leach  said  :  "The  court 
Pr.  79.  docs  not  confine  itself  to  a  particular  per 

2  Stahl  I?.  Charles,  5  Abb.  (N.  Y.)  Pr.  cent.,  although  £10  per  cent,  is  a  sort  of 
348.  general  rule."     The  advance  must  be  at 

*  Robinson  r.  Meigs,  10  Paige  (N.  Y.),  least  £40  to  cover  expenses.  Farlow  v. 
41  ;   St.  .John  v.  Mayor,  &c.  of  N.  Y.  6     Weildon,  4  Madd.  4G0. 

Duer  (N.  Y.),  315  ;  13  How.  Pr.  527.  ^  William.son  v.  Dale,  3  Johns.  (N.  Y.) 

*  Lansing  v.  McPhcrson,  3  .Johns.  (N.  Ch.  292;  Lcfevre  v,  Laraway,  22  Barb. 
Y.)  Ch.  424.  167,173. 

'  Lansing  v.   McPhcrson,  3  .Johns.  (N.  "  Duncan  v.  Dodd,  2  I'aigc  (N.  Y.),  99  ; 

Y.)Ch.  424.     In  this  case  the  offer  was  an  Collier    i;.    Whipi)le,    13    Wi-nd.    (N.   Y.) 

advance  of  fifty  per  cent.    See,  also,  Mott  224  ;  Adams  v.  Haskell,  10  Wis.  123. 

V.  Walklcy,  3  Kdw.  (N.  Y.)  590.  »  Littell  v.  Zuniz,  2  Ala.  2r)G. 

*  Garstonc   v.  Edwards,  1  S.  &  S.  20. 

VOL.  II.  34  529 


§  10)42.]   FORF.CLOSURK  SALES  UNDKR  DECREE  OF  COURT. 

drponds  upon  the  equitable  discretion  of  the  court  for  completion.^ 
Until  the  sale  is  approved  by  court  the  purchaser  does  not  acquire 
any  independent  right  by  his  purchase  ;  he  may  be  regarded 
merely  as  an  accepted  or  preferred  bidder.  The  inadequacy  of 
price  may  be  such  as  to  be  of  itself  an  indication  of  fraud  or  un- 
fairness ;  and  if  not  so  gross  as  to  indicate  fraud,  when  taken  in 
connection  with  other  circumstances,  it  is  ground  for  setting  the 
sale  asitle  and  ordering  a  resale  ;  as,  for  instance,  when  a  party 
whose  interests  are  injuriously  affected  by  the  sale  has  been  pre- 
vented from  attending  it  through  mistake  or  misapprehension.^ 

In  general  a  resale  may  be  had  for  any  cause  which  would  be  a 
ground  for  setting  aside  the  sale  after  confirmation ;  and  causes  of 
like  nature,  which  might  not  be  regarded  as  sufficient  for  setting 
aside  the  sale  after  it  has  been  completed,  will  be  sufficient  to 
prevent  confirmation  and  subject  the  property  to  a  resale.^ 

6.  Enforcement  of  Sale  against  Purchaser. 

1642.  One  who  bids  off  property  at  a  foreclosure  sale  be- 
comes a  quasi  party  to  the  suit,  so  that  he  subjects  himself  to 
the  jurisdiction  of  the  court,  and  may  be  compelled  to  pay  the 
amount  bid.'*  The  fact  that  he  acts  for  another  person  will  not 
relieve  him  if  he  makes  the  bid  in  his  own  name.^  Neither  lapse 
of  time  nor  the  death  of  the  original  parties  to  the  suit  will  bar 
the  right  of  the  court  to  compel  his  compliance  with  the  condi- 
tions of  sale.^  If,  however,  the  delay  be  unreasonable,  and  in  the 
mean  time  there  has  been  a  material  change  detrimental  to  his 
interests,  the  purchase  will  not  be  enforced.  According  to  the 
English  practice,  on  the  failure  of  the  purchaser  without  good 
cause  to  comply  with  the  terms  of  sale,  if  it  appears  that  he  is 
unable  to  perform  his  contract,  the  parties  interested  in  the  sale 

1  See  chapter  xl,  division  14 ;  Vanbus-  60.  In  this  case  property  worth  $4,500 
sum  V.  Maloncy,  2  Mete.  (Ky.)  550  ;  Busey      was  sold  for  $2, GOO. 

V.  Hardin,  2  B.  Mon.  (Ky.)  411  ;    Wil-  »  See  §  1640. 

liams  V.   Woodruff,   1   Duvall  (Ky.),  257 ;  *  Casamajor  v.  Strode,   1    Cond.  Eng. 

Taylorv.  Gil].in,.3  Mete.  (Ky.)  544;  Hor-  Ch.  195;   Wood  v.  Mann,  3  Sum.  318; 

sey  w.  Hough,  38  Md.  1.30.  Kequa  v.   Rea,  2   Paige,   341;    Cazet  v. 

An  offer  to  bid  $2,400  at  a  resale,  when  Hubbell,  36  N.  Y.  677  ;  Coulter  v.  Herrod, 

the  premises  brought  $2,000  at  the  origi-  27  Miss.  685. 

nal  sale,  is  no  ground  for  refusing  to  con-  ^  Atkinson  v.  Richardson,  14  Wis.  157 ; 

firm.     Ailis  v.  Sabin,  17  Wis.  626.     See,  and  see  Lyon  v.  Elliott,  3  Ala.  654. 

also,  BuUard  v.  Green,  10  Mich.  268.  *>  Cazet  v.  Hubbell,  36  N.  Y.  677;  Mer- 

2  Wetzler  v.  Schaumann,  24  N.  J.  Eq.  chants'  Bank  v.  Thomson,  55  N.  Y.  7. 

530 


ENFORCEMENT    OF    SALE   AGAINST   PURCHASER.         [§  1643. 

may,  upon  motion,  obtain  an  order  discharging  the  sale,  and 
directing  a  resale  ;  but  if  he  is  responsible,  the  court  may  order 
him  to  pay  the  money  into  court,  and  may  enforce  his  submission 
by  attachment  or  order  to  stand  committed  ;  or  may  order  a  re- 
sale of  the  estate,  and  that  the  purchaser  pay  the  expenses  of  it, 
and  any  deficiency  in  price  arising  from  it.^ 

1643.  Performance  is  enforced  by  attachment.  The  same 
course  is  followed  in  our  own  courts.^  The  proper  tribunal  to 
enforce  the  purchaser's  undertaking  is  that  in  which  the  decree  of 
sale  was  made,  and  the  application  may  be  by  motion.^  The 
mode  of  enforcing  compliance  with  the  order  of  court  is  by  attach- 
ment against  the  person.*  The  fact  that  upon  the  purchaser's  de- 
fault remedy  may  be  had  by  a  resale  of  the  lands,  or  by  suit 
against  him  for  damages,  does  not  deprive  the  court  of  the  right 
to  enforce  performance  in  this  summary  way  ;  the  option  as  to 
remedy  lies  with  the  court  or  the  party  selling,  and  not  with  the 
purchaser.^  Even  after  the  purchaser  has  complied  with  the  terms 
of  sale,  l)y  paying  part  cash  and  giving  a  bond  and  security  for  the 
balance,  and  the  sale  has  been  confirmed  by  court,  he  may  upon 
his  failure  to  pay  the  bond  be  proceeded  against  by  a  rule  made 
upon  him  to  show  cause  why  the  land  should  not  be  sold  for  the 
payment  of  the  purchase  money  ;  and  upon  that  proceeding  a  de- 
cree may  be  made  for  the  sale  of  the  land.^ 

In  a  case  where  the  purchaser  refused  to  complete  the  purchase 
after  having  made  a  small  deposit,  he  was  ordered  to  show  c^iuse 
why  an  attachment  should  not  issue  against  him.  The  Chancel- 
lor said  "  that  he   had  no  doubt  of  the  power  of  the   court  to 

1  2  Daniel'.s  Ch.  Pr.  14G0-1462  ;  Hard-  ^  Wood  v.  Mann,  supra;  Cazet  v.  Hub- 

ing  V.   Hardin^,',  4  M.  &  C.  514  ;    Lans-  bell,  36  N.  Y.  677,     In  Lcaton  v.   Slade, 

down  V.  Elderton,  14   Vcs.  512.     It  was  Lord  Eldon  said  :  "If  you  make  out  that 

formerly  the  rule  that  a  forfeiture  of  the  the  seller  would  have  heen  at   liiierty  to 

deposit  was  the  only  redress  against  the  resell,  that  does  not  make  out  that  he  lets 

purchaser.     Saville  v.  Saville,  1  1'.  Wms.  the  other  off." 

745.  «'  Chirkson  v.  Head,  15  Gratt.  ( Va.)  288. 

^  Clarkson   i;    Head,    15    Gratt.    (Va.)  In   Ilichardson  v.  Jones,  3  Gill  &  John. 

288;  Anderson  v.  Foulke,  2  Har.  &  Gill  (Md.)   163,   it  was  held,  contrary  to  the 

(Md.),  346;  Richardson  v.  Jones,  3  Gill  decision  above,  that  the  power  of  the  court 

&  Johns.  (Md.)  163;  Gordan  w.  Saunders,  does  not   extend  to    enforcing  sales  on 

2  McCord  (S.  C.)    Ch.    151  ;  Brasher  v.  credit  after  the  purchaser  has  once  com- 

Cortlandt,  2  Johns.  (N.  Y.)  Ch.  505.  plied  with  the  terms  of   sale   by  giving 

8  Wood  V.  Mann,  3  Sumn.  318,  326.  security  ;  that  the  remedy  is  at  law  on  the 

*  Graham  y.  IJIeakic,  2  Daly  (N.  Y.),  55;  security. 
Miller  v.  Collycr,  36  Barb  (N.  Y.)  250. 

631 


§§  1G44,  104.'').]   FORECLOSURE  SALES  UNDER  DECREE  OF  COURT. 

coerce  a  puroliaser  where  the  conditions  of  sah'  had  not  f:jiven  an 
alternative.  That  in  this  case  the  forfeiture  of  the  deposit  would 
not  be  suflicient,  either  as  punishment  to  the  one  party  or  a  satis- 
faction to  the  other."  He  was  ordered  to  pay  the  money  in  six 
days,  or  that  an  attachment  issue. ^ 

The  fact  that  the  purchaser  has  been  ordered  to  complete  the 
purchase  after  a  specific  objection  to  the  title  or  to  the  parties 
does  not  decide  a  question  of  title  not  brought  to  the  consider- 
ation of  the  court  by  objection,  and  is  no  pi'otection  to  the  pur- 
chaser against  persons  having  vested  interests  in  the  equity  of 
redemption,  who  ought  to  have  been,  but  were  not,  made  parties 
to  the  suit. 2 

1644.  Forfeiture  of  deposit.  —  If  the  purchaser  without  good 
cause  does  not  complete  the  purchase,  he  forfeits  the  deposit 
made  at  the  time  of  sale,  so  far  as  it  may  be  needed  to  make  up 
a  deficiency  in  price  on  a  resale. ^  He  is  also  chargeable  with  the 
expenses  of  the  resale.*  A  resale  is  ordered,  and  if  there  is  a  loss 
in  price  from  the  former  sale,  judgment  may  be  had  against  the 
purchaser  for  the  difference  towards  which  the  deposit  will  be  ap- 
plied.^ When  it  is  desired  to  hold  a  third  person  responsible  for 
the  loss  as  the  real  purchaser,  instead  of  the  person  who  bid  at 
the  sale,  the  order  for  resale  should  require  the  payment  to  be 
made  by  him,  and  the  suit  cannot  be  maintained  against  him, 
when  the  order  requires  the  payment  to  be  made  by  the  bidder.^ 
If  on  the  purchaser's  default  a  resale  be  made  without  any  appli- 
cation to  the  court  to  the  same  purchaser,  he  is  liable  only  on  his 
bid  at  the  second  sale.' 

1645.  If  there  be  a  defect  in  the  title  unknown  to  the  pur- 
chaser at  the  time  of  sale,  the  court  will  not  ordinarily  compel 
him  to  take  a  deed  and  complete  the  purchase.  An  inchoate 
right  of  dower  is  such  a  defect ;  and  so  is  a  prior  mortgage,  or 
other  lien  or  charge  upon  the  land.^ 

1  Brasher  y.Cortlandt,  2  Johns.  (N.Y.)  the  foreclosure.     S.  C.  2  N.  Y.  Weekly 
Ch.  505.  Dig.  40. 

2  Williamson  v.  Field,  2  Sandf.  (N.  Y.)         ^  Graham  v.  Bleakie,  2  Daly  (N.  Y.),  55. 
Ch.  53.3.  6  Paine  v.  Smith,  2  Duer  (N.  Y.),  298. 

8  Willets  V.  Van  Alst,  26  How.  (N.  Y.)  ''  Home  Ins.  Co.  v.  Jones,  45  How.  (N. 

Pr.  325.  Y.)  Pr.  498. 

*  Knightv.  Maloney,  4Hun(N.  Y.),33.  »  Fryer  y.  Rockefeller,  63  N.  Y.  268; 

But   he   is  not   chargeable  with  the  ex-  Merchants' Bank  j;.  Thomson,  55  N.  Y.  7; 

pense  of  curing  a  formal  irregularity  in  Simar  v.  Canaday,  53  N.  Y.  298 ;  Mills  v. 

532 


ENFORCEMENT   OF   SALE   AGAINST   PURCHASER.        [§  1646. 

The  innocent  bidder  is  entitled  to  be  repaid  his  proper  ex- 
penses. These  inckide  the  deposit  paid  by  him  on  the  sale,  the 
expenses  of  the  examination  of  the  title,  and  the  costs  of  the 
motion  for  repayment.^  The  repayment  is  made  out  of  the  funds 
in  the  case  if  there  are  any  ;  and  if  not,  the  plaintiff  must  pay 
the  expenses  in  the  first  instance,  but  may  recover  them  over  in  a 
suit  or  upon  a  resale.  If,  however,  the  defect  in  the  proceedings 
result  from  the  plaintiff's  negligence  in  omitting  to  make  some 
one  interested  under  the  mortgage  a  party  to  the  suit,  as,  for  in- 
stance, the  owner  of  the  equity  of  redemption,  such  expenses  can- 
not be  deducted  from  the  surplus  moneys  arising  from  the  second 
sale,  as  these  belong  to  the  owner  of  the  equity,  and  he  is  not  re- 
sponsible for  the  irregularity  in  the  sale.^ 

'1646.  Defect  in  the  title  prior  to  the  mortgage  does  not  ex- 
cuse the  purchaser  from  carrying  out  his  purchase.  He  buys  the 
title  of  the  mortgagor  as  it  existed  at  the  time  of  the  making  of 
the  mortgage,  and  nothing  more.  The  foreclosure  cuts  off  the 
equity  of  redemption,  and  by  the  sale  he  gets  the  mortgage  title 
divested  of  all  rights  of  the  mortgagor  and  those  claiming  under 
him  subsequent  to  the  mortgage.  He  takes  the  risk  of  the  mort- 
gagor's having  any  title  that  passed  by  the  mortgage.^  If  the 
title  by  the  mortgage  purports  to  be  an  estate  in  fee,  when  it  is  in 
fact  only  a  leasehold  interest,  although  the  judgment,  following 
the  terms  of  the  mortgage,  erroneously  directs  a  sale  of  the  prem- 
ises as  in  fee,  the  purchaser  is  bound  by  the  sale,  if  he  has  notice 
at  the  time  of  the  facts,  and  of  the  leasehold  title  of  the  mort- 
gagor. The  sale  under  the  judgment  transfers  whatever  title  the 
mortgagor  had.^  The  purchaser  cannot  be  relieved  on  account 
of  defects  in  the  property,  or  in  the  title  to  it,  of  which  he  had 
notice,  and  in  reference  to  which  he  may  be  supposed  to  have 
bid.6 

Van  Voorhies.  20  N.  Y.  412;  Ilirsch  v.  »  Fryer  v.  Rockefeller,  4  Hun  (N.  Y.), 

LivinKHton,  3   Iliin   (N.  Y.),  9;  S.  C.  48  800;S.  C.  63  N.  Y.  268;  Rigt^s  v.  Pur- 

IIow.  Pr.  243;  Veeda  v.  Fonda,  3  Paige  sell,  66  N.  Y.  193;  Holden  v.  Sackctt,  12 

(N.  Y.),  94;  Seaman  v.   Hicks,  8  Pai^o  Abb.  (N.  Y.)  Pr.  473;  Bojrgs  u.  Fowler, 

(N.    Y.).   e.").");  Shiveley   v.   Jones,   6    B.  16  Cal.  559;  Strong  v.  VVaddell,  56  Ala, 

Mon.  (Ky.)  274.  471  ;  and   see  Osterbcrg  v.  Union  Trust 

>  Morris  v.  Mowatt,  2  Paige  (N.  Y.),  Co.  93  U.  S.  424. 

586.  *  Graham   i;.  Blcakic,  2    Daly  (N.  Y.), 

2  Raynor  i'.  Selmes,  52  N.  Y.  579 ;  re-  55. 

versing  S.  C.  7  Lans.  440.  *  Riggs  v.  Pursell,  66  N.  Y.  193. 

683 


§1647.]       FORECLOSURE   SAI ES   UNDER   DECREE   OF   COURT. 

A  pui\'l):iser  at  a  foreclosure  sale  is  presumed  to  know  the 
condition  of  the  title  wliich  he  purchases.  If  the  mortgage  con- 
tains no  covenant  of  warranty,  and  the  title  proves  defective,  the 
purchaser  has  no  claim  upon  tlie  mortgagor  to  make  it  good  ;  nor 
will  any  outstanding  and  paramount  title  subsequently  acquired 
by  the  mortgagor  enure  to  the  benefit  of  the  purchaser  ;  although 
while  the  relation  of  mortgagor  and  mortgagee  existed  a  title 
acquired  subsequent  to  the  mortgage  would  go  to  strengthen  the 
mortgage  security.  When  that  relation  is  extinguished  by  fore- 
closure, the  mortgagor  is  under  no  obligation  to  protect  the  pur- 
chaser's title.^  So  also  the  purchaser  is  affected  with  notice  of 
all  the  defects  and  irregularities  of  the  foreclosure  and  sale  that 
appear  of  record,  and  is  bound  to  take  notice  that  a  junior  mort- 
gagee, or  other  incumbrancer  of  record,  was  not  made  a  party  {o 
the  suit,  and  therefore  may  redeem.^ 

The  purchaser  after  having  completed  the  sale  and  paid  over 
the  money  cannot  call  upon  the  mortgagee  to  make  restitution  of 
any  part  of  it  on  the  ground  that  the  title  has  proved  defective, 
and  the  purchaser  has  been  forced  to  pay  a  further  sum'  to  perfect 
it.  His  only  remedy  is  to  avail  himself  of  the  covenants  of  the 
several  conveyances  preceding  the  conveyance  to  the  mortgagee.^ 

1647.  Errors  in  the  decree  or  in  the  proceedings  under  it 
afford  no  ground  for  relieving  the  purchaser  from  the  sale,  after 
its  confirmation.*  Of  course  the  purchaser  may  take  objection, 
even  after  confirmation,  to  a  defect  arising  from  a  want  of  juris- 
diction in  the  court ;  ^  but  he  need  not  look  further  than  to  the 
judgment  and  the  deed  given  in  execution  of  it,  so  long  as  they 
stand  unimpeached.  Erroneous  rulings  in  the  case  upon  ques- 
tions of  law  do  not  concern  him.^  Even  if  the  decree  be  errone- 
ous it  cannot  be  attacked  collaterally.'^  After  a  decree  and  sale 
under  it,  the  validity  of  the  mortgage  cannot  again  be  called  in 
question.^  If  the  decree  was  valid,  and  the  execution  and  deed 
are  regular,  a  purchaser  in  good  faith  acquires  a  good  title  to  the 

1  Jackson  u.  Littell,  56  N.  Y.  108.  198;   Daniel  y.  Leitch,    13    Gratt.   (Va.) 

2  McKernan  v.  NeflF,  43  lud.  503  ;  Piel  195;    Splahn  v.   Gillespie,    48   Ind.  397; 
V.   Brayer,   30    Ind.   .332;    Alexander  v.  Sowles  v.  Harvey,  20  Ind.  217. 
Greenwood,  24  Cal.  505.  6  Boggs  v.  Fowler,  16  Cal.  559. 

8  McMurray    v.    Brasfield,    10    Ileisk.  ^  Mills  v.  Ralston,  10  Kans.  206. 

(Tenn.)  529.  '^  Ogden  v.  Walters,  12  Kans.  282. 

*  Worsham  r.Hardaway,  5  Gratt.  (Va.)  8  Qest  v.  Flock,  2  N.  J.  Eq.  (1   Green) 

60  ;  Threlkelds  v.  Campbell,  2  Gratt.  ( Va.)  108. 

634 


ENFORCEMENT    OF   SALE   AGAINST   PURCHASER.         [§  1648. 

property,  although  as  against  the  mortgagor  the  decree  was  er- 
roneous.^ 

A  purchaser,  however,  under  the  foreclosure  of  an  unregistered 
mortgage,  is  not  such  a  bond  fide  purchaser  as  to  acquire  any 
rights  against  one  who  had  taken  a  conveyance  from  the  mort- 
gagor after  the  mortgage  and  before  foreclosure,  and  who  was  in 
possession  at  the  time  of  the  foreclosure  sale.^  Although  the 
mortgage  has  been  paid  but  left  undischarged  of  record,  one  pur- 
chasing in  good  faith  at  a  foreclosure  sale  under  the  mortgage  ac- 
quires a  good  title  as  against  the  mortgagor  and  those  claiming 
under  him.^ 

1648.  Reference  as  to  title.  —  While  the  purchaser  under  a 
judicial  sale  submits  himself  to  the  jurisdiction  of  the  court,  and 
may  be  compelled  to  carry  out  his  contract,  he  is  also  entitled  to 
the  protection  of  the  court  in  respect  to  the  avoidance  of  the 
purchase,  if  by  reason  of  imperfections  in  the  title  or  otherwise  he 
is  freed  from  his  agreement.*  He  may  apply  for  a  reference  to 
inquire  into  the  title.  The  abstract  of  title  and  deeds  and  the 
statement  of  facts  being  laid  before  the  referee,  the  purchaser  may 
examine  them  and  file  objections.  If  the  report  be  against  the 
title,  the  purchaser  may  move  to  be  discharged  and  for  a  return 
of  his  deposit  and  for  costs.^  It  is  well  settled  that  if  there  be  a 
reasonable  doubt  as  to  the  soundness  of  the  title  the  court  will 
not  compel  the  purchaser  to  complete  the  purchase,  even  if  the 
better  opinion  be  that  the  title  is  good.^ 

If  the  master  upon  examination  of  the  abstract  of  title,  and 
the  facts  bearing  upon  it,  reports  that  the  title  is  defective  or 
doubtful,  the  purchaser  may  upon  motion  be  discharged,  and  have 
an  order  for  the  repayment  of  his  deposit  and  for  the  costs  of  the 
reference.''  He  will  not  of  course  be  compelled  to  complete  the 
purchase  if  the  proceedings  for  any  reason  were  void,  as  for  want 
of  jurisdiction  in  the  court  to  entertain  the  case  ;  or  if  a  party  in 
interest,  as,  for  instance,  one  tenant  in  common  of,  the  premises, 
has  not  been  served  with  process ;  ^  or  if  an  incumbrancer  is  not 

»  Splahn  V.  Gillespie,  48  Ind.  397.  «  Abdl  v.  Heathcote,  2  Ves.  100  ;  Sta- 

»  Ilawley  v.  Bennett,  5  Paige  (N.  Y.),  ))ylton  v.  Scott,  16  Ves.  272. 

104.  '  Gralinm  v.  Bleakic,  2  Duly  (N.  Y.), 

«  Atwater   v.    Seymour,    Brayt.    (Vt.)  •').');    and  see  Ormsby   v.  Tirry,  0    Himh 

209.  (Ky.).  553. 

♦  Hoffman '8  Referees,  240.  '  Cook   i-.  Farnam,  21    IIow.    (N.    Y.) 

•  lb.  241,  242. 

635 


§§  U)4l\  lGr)0.]       FORKCLOSURE   SALES   UNDER   DECREE   OF   COURT. 

mailo  a  partv  to  tlio  siiit.^  A  bidder's  liability  is  torminatod  if 
the  sale  is  not  rejioited  to  the  court,  or  approved  wluni  reported  ; 
or  if  the  master  sells  the  property  again  on  his  own  responsibility, 
and  this  sale  is  api)roved  by  the  court.^ 

If  the  defect  in  the  title  be  such  that  it  may  be  cured,  and 
within  a  reasonable  time  releases  are  obtained  or  other  acts  done 
to  remedy  the  defect,  the  purchaser  cannot  refuse  to  complete  the 
purchase.^ 

If,  however,  a  party  in  interest  has  not  been  made  a  party  to 
the  suit,  though  this  is  a  ground  upon  which  the  purchaser  may 
be  relieved  from  his  purchase,  he  cannot  hold  on  to  it,  and  insist 
upon  having  his  title  perfected  by  the  application  of  the  proceeds 
of  the  sale  to  the  payment  of  the  outstanding  claim.^ 

1649.  Taxes.  —  Neither  will  a  purchaser  be  required  to  com- 
plete the  purchase  when  he  will  not  obtain  such  an  interest  in  the 
property  as  he  had  a  right  to  suppose  from  the  terms  of  sale  he 
was  buying.^  Where  by  the  terms  of  sale  the  premises  are  sold 
free  from  incumbrances,  the  taxes  and  assessments  to  be  paid  out 
of  the  purchase  money,  and  there  is  a  large  assessment  still  un- 
confirmed by  the  municipal  authorities,  and  which  cannot  be  paid, 
the  purchaser  is  not  bound  to  complete  the  purchase  and  take  the 
property  subject  to  the  assessment.^  If,  however,  the  property 
can  be  relieved  of  incumbrance  by  payment  of  the  tax,  the  court 
may  direct  the  master  to  satisfy  the  claim  out  of  the  proceeds  of 
sale  and  thus  relieve  the  title  from  the  objection.'^ 

The  purchaser  himself  cannot  retain  from  his  bid  a  sum  suffi- 
cient to  pay  the  taxes. ^ 

1650.  A  purchaser  may  by  his  conduct  preclude  the  open- 
ing of  the  sale.  If,  during  the  progress  of  a  foreclosure  sale, 
he  has  announced  to  the  other  bidders  that  he  had  prior  incum- 
brances on  the  property,  and  that  the  sale  would  be  made  sub- 

Pr.  286  ;  34  Barb.  (N.  Y.)  95  ;  12  Abb.  Pr.  «  Duvall  v.  Speed,  1  Md.  Ch.  Dec.  235. 

359.                         •  5  Seaman  v.  Hicks,  8  Paige  (N.  Y.), 

1  Verdin  v.  Slocum,  71  N.  Y.  345.  655. 

2  Dills  V.  Jasper,  33  111.  262.      .  6  Post  v.  Leet,  8  Paige  (N.   Y.),  337  ; 
*  Graham  i-.  Bkakie,  2   Daly  (N.  Y.),  see,  also,  Easton  v.  Pickcnsgill,  55  N.  Y. 

55.     In  Coffin  v.  Cooper,  14  Ves.  205,  the  310. 

Lord  Chancellor  said  :  "  That  where  the  ^  Lawrence  v.  Cornell,  4  Johns.  (N.  Y.) 

master's  re|)ort  is,  that  by  getting  in  a  Ch.  542. 

term,  or  obtaining  administration,  the  ven-  ^  Osterberg  v.  Union  Trust  Co.  93  U. 

dor  will  have  a  title,  the  court  will  put  S.  424. 

him  under  terms  to  procure  it  speedily." 

536 


THE  DEED,   AND  PASSING   OF  TITLE.      [§§  1651,  1652. 

ject  to  these,  he  cannot  consistently  ask  to  be  relieved  from  his 
own  bid,  on  the  ground  that  he  supposed  he  would  be  entitled  to 
have  the  surplus  moneys  applied  to  the  payment  of  his  prior  in- 
cumbrances. He  must  be  presumed  to  understand  that  if  others 
on  his  own  announcement  were  bidding  for  the  property,  sub- 
ject to  the  incumbrances,  he  was  competing  with  them  on  equal 
terms.^ 

A  purchaser  may  also  by  his  own  conduct  with  reference  to  the 
property  practically  confirm  a  sale,  so  as  to  preclude  himself  from 
having  the  sale  opened  ;  as  where  he  has  taken  possession  of  the 
premises  under  a  claim  of  title  derived  from  the  sale,  paid  laborers 
for  work  upon  them,  and  made  arrangements  for  planting  crops 
for  the  following  year.^ 

1651.  An  irregularity  in  the  foreclosure  proceedings  which 
is  merely  formal,  and  cannot  result  in  injury  to  the  purchaser,  is 
no  ground  for  his  refusing  to  complete  the  purchase  ;  and  if  on  his 
refusal  to  complete  the  purchase  a  resale  is  ordered,  he  is  charge- 
able with  the  expenses  of  it.^  The  purchaser  has  a  right  to  in- 
sist upon  the  terms  of  his  purchase  being  complied  with.  Where 
by  agreement  of  the  parties  the  referee  sold  the  premises  on  time, 
the  purchaser  cannot  be  compelled  to  pay  cash.* 

Judicial  sales  must  be  conducted  with  the  utmost  fairness  and 
good  faith  ;  and  if  a  purchaser  at  a  sale  under  a  decree  of  fore- 
closure of  a  junior  mortgage  is  by  false  representations  induced 
to  believe  that  the  proceeds  of  the  sale  will  be  applied  to  pay- 
ment of  the  prior  mortgage,  and  that  he  would  take  a  clear  title, 
the  sale  will  be  set  aside  ;  ^  and  so  also  it  will  be  set  aside  where 
the  purchaser,  thought  he  was  buying  an  absolute  title  to  the  land, 
and  not.  one  subject  to  the  first  mortgage.^ 

7.   The  Deed^  and  passing  of  Title. 

1652.  It  is  a  recognized  practice  to  allow  another  person 
to  be  substituted  for  tlie  purchaser,  and  to  take  the  decnl  directly 
to  himself.^     Any  equitable  rights  or  liens  acquired  by  tliird  per- 

1  Ledynnl  v.  Phillips,  32  Mich.  13.  274.   Sec  Vanderkcmp  w.  Shelton,  11  Paige 

a  Lc.IyurrI  i;.  Piiillips,  «M/)ra.  (N.  Y.),  28. 

»  Knif^hti.'.  Molonfy,  4  Hun  (N.  Y.),33.         '  Proctor  v.  Farnam,  5  Pnino  (N.  Y.), 

«  Khodcs  V.  DiUcher,  6  Ilun  (N.  Y.),  619;  Uorcr  on  Jii<l.  Sales,  145;  Klilerin- 

453.  (Tcr  i;.  Moriarty,    10  Iowa,  78;  McClnre 

»  Panlctt  V.  Peabody,  3  Neb.  196.  v.  ICnKolhar.lt,  17  HI.  47;  Splahn  v.  Oil- 

6  Shivelcy  v.  Jones,  6  B.  Mon.   (Ky.)  IcHpic,  48  Ind.  397. 

537 


§  1053.]       FORF.CLOSURE   SALES    UNDKR    DECREE    OF   COURT. 

sons  ajj^iiinst  \]\o  ()ri>j;inal  jiiircliaser  before  the  iissigiiuKMit  are  pro- 
tected. Win  re  the  ori«jjinal  purchaser  had  entered  into  a  contract 
of  sale  of  the  premises  with  another,  and  had  died,  in  the  absence 
of  his  heir,  tiie  court  ordered  a  conveyance  to  the  substituted  pur- 
chaser, and  the  payment  of  tlie  money  into  court.^ 

1653.  Delivery  of  deed.  —  The  master's  deed  passes  the  title 
to  the  purchaser  at  the  moment  of  delivery,  though  the  sale  has 
not  been  confirmed.^  From  that  time  the  property  is  at  his  risk, 
and  having  accepted  the  deed  he  cannot  repudiate  the  contract.^ 
The  holder  of  the  deed  has  primd  facie  a  valid  title  to  the  land 
described  in  it.*  In  England  the  practice  is  to  withhold  the  deed 
until  the  final  order  confirming  the  sale  is  made  absolute,  but  the 
confirmation  relates  back  to  the  delivery  of  the  deed,  and  gives 
it  effect  from  that  time.*^  The  practice  in  this  country  in  this  re- 
gard is  not  uniform.  The  better  practice  is  to  report  the  sale  and 
obtain  a  confirmation  of  it  before  the  delivery  of  the  deed  ;  but  in 
some  states,  and  especially  in  those  in  which  a  time  for  redemption 
is  allowed  after  the  sale,  it  is  the  practice  to  delay  the  report  until 
the  deed  is  executed  and  delivered.^  If  in  such  case  the  mort- 
gagor delays  to  move  for  the  filing  of  the  report  and  the  setting 
aside  of  the  sale  until  the  deed  is  delivered,  he  is  regarded  as 
waiving  all  objections  to  the  sale  which  are  merely  formal.'^ 

When  a  judgment  in  foreclosure  provides  that  the  purchaser 
shall  be  let  into  possession,  upon  production  of  the  referee's  deed, 
the  purchaser  acquires  no  title  or  right  of  possession  until  the 
delivery  of  the  deed  to  him,  and  therefore  he  is  not  entitled  to 
the  rents  from  the  time  of  sale  by  relation  back,  although  he  is 
charged  with  interest  on  the  purchase  money  from  that  time  ; 
until  the  deed  is  given  the  owner  of  the  equity  is  entitled  to  the 
possession  of  the  land  and  to  the  rents.^     Upon  the  delivery  of 

1  Pearce  v.  Pearce,  7  Sim.  138.  "^  Walker  v.   Sclium,  42  111.  462.      In 

2  Fuller  V.  Van  Geesen,  4  Hill  (N.  Y.),  Illinois  this  was  the  practice  before  the 
171;  S.  C.  4  How.  Pr.  182;  Ford  v.  enactment  allowing;  redemption  after  the 
Burch,  6  Barb.  (N.  Y.)  60;  Mitchell  v.  sale.  But  since  this  statute  the  report  is 
Bartlett,  51  N.  Y.  447  ;  S.  C.  .52  Barb.  319.  not  generally  made  until  after  the  deed  is 
For  form  of  sheriffs  or  referee's  deed  used  executed  and  delivered,  and  sometimes  it 
in  New  York,  see  5  Wait's  Prac.  225,  226.  is  never  reported  and  confirmed  at  all. 

8  Jones  V.  Burden,  20  Ala.  382.  ^  Walker  v.  Schum,  supra ;  Fergus  v. 

*  Jackson  i;.  Warren,  32  111.  331  ;  Sim-  Woodworth,  44  111.  374,  379. 

erson  v.  Branch  Bank  at  Decatur,  12  Ala.  »  Mitchell  v.  Bartlett,  51  N.  Y.  447  ;  S. 

205.  C.  52  Barb.  319.     See,  however,  Lathrop 

^  Ex  parte  Minor,  11  Ves.  559.  v.  Nelson,  4  Dill.  194. 

638 


THE   DEED,   AND   PASSING   OF   TITLE.  [§  1664. 

the  deed  the  purchaser  is  entitled  to  the  proper  process  of  court 
for  the  delivery  of  possession  to  hira  as  against  all  the  defendants 
who  were  before  the  court.^  When  consummated  by  the  deed, 
the  sale  passes  as  against  them  the  entire  estate  held  by  the  mort- 
gagor, whatever  it  may  have  been  at  the  date  of  the  mortgage  ; 
and  the  purchaser  is  entitled  upon  the  receipt  of  his  deed  to  the 
possession  of  the  premises,  even  though  the  plaintiff  pending  the 
action  has  conveyed  the  property  to  one  of  the  defendants.^ 

1654.  As  the  title  of  the  purchaser  relates  back  to  the  time 
of  the  execution  of  the  mortgage,  it  does  not  matter  to  him  what 
disposition  the  mortgagor  may  afterwards  have  made  of  the  prop- 
erty if  the  foreclosure  is  perfect.  All  conditions  and  reservations 
and  easements,  as  well  as  all  incumbrances  or  liens,  he  may  have 
afterwards  imposed  upon  the  property  are  extinguished. ^  In  this 
respect  the  purchaser's  rights  are  the  same  whether  the  sale  be 
under  a  decree  of  a  court  of  equity,  under  a  judgment  in  sci7'e 
facias,  or  under  a  power  in  the  mortgage  or  trust  deed.  The  title 
takes  effect  by  virtue  of  the  original  deed  ;  the  sale  carries  that 
title,  and  cuts  off  all  liens  and  interests  created  subsequent  to  the 
mortgage. 

Title  acquired  by  foreclosure  relates  back  to  the  date  of  the 
mortgage,  so  as  to  cut  off  intervening  equities  and  rights.  If  all 
subsequent  purchasers  and  incumbrancers  are  made  parties  to  the 
bill,  the  title  under  the  mortgage  foreclosed  is  perfected  to  an  ab- 
solute one.  In  such  case  the  purchaser  acquires  the  title  of  the 
mortgagee,  and  also  the  title  of  the  mortgagor  as  it  stood  at  the 
time  of  the  making  of  the  mortgage.*  If  the  mortgage  was  of 
an  undivided  interest  in  common  with  others,  the  purchaser  ac- 
quires the  same  interest.-^  He  obtains  the  title  of  all  the  parties 
to  the  suit,  whether  their  title  be  that  which  is  set  fortli  in  the 
bill  or  not.     Whatever  the  title  of  the  parties  to  the  suit  may  be, 

»  Frishic  v.  Fogarty,  34  Cal.  11.  4  Paitjc  (N.  Y.)   Cli.  52f.,  Ml  ;    M'Millan 

2  Montfjomery   v.  MiddleinisN,  21    Cal.  t>.  Uiclianls,  9  Cnl.  SGr)  ;    i'owesliick  Co.  i;. 
10.3  ;  BcUoc  V.  Uok'erH,  9  Cal.  la.").  Dcnnisoii,  .'JO  Iowa,  244  ;  CarUr  v.  Walker, 

3  Kinj;  v.  M'Culiy,  .38  I'a.  St.  7fi ;  Davis  2  Ohio  St.  .T39  ;  Frisdic  i;.  Krnim-r,  16 
V.  Conn.  Mut.  Life  Ins.  Co.  84  III.  508.  Ohio,  12.');   Ilodson  v.  Treat,  7  Wis.  203  ; 

♦  Hither  I'.  Parker,  8  Cu.sh.  Mass.  145  ;  De   Haven  v.    Landell.  31    I'a.    St.    120; 

Brown    v.   Tvler,   8   Gray    (MaH.s.),   135;  West  Branch  Bank  v.  Cliestcr,  11  Pa.  St. 

Marslon  i;.  Marston,  45  Me.  412;    Ilaynes  282  ;  Hamilton  v.  State,  1  Inil.  128. 

V.    Wel]in(,'ton,   25    Me.    458;     Taylor   v.  6  Mal,oney  w.  Middkton,  41  Cal.  41. 
Keam,  68    111.   339  ;    Vroom   v.  Ditmas, 

689 


§  U>.')5.]   FORKCLOSURE  SALES  UNDER  DECREE  OF  COURT. 

that  is  what  the  court  undertakes  to  sell,  and  what  the  purchaser 
is  entitled  to  have  conveyed  to  hiin.^  The  fact  that  the  purchaser 
at  a  foreclosure  sale  under  a  first  mortgage  had  previously  bought 
the  equity  subject  to  a  second  mortgage,  which  he  did  not  ex- 
pressly stipulate  to  pay,  does  not  prevent  his  acquiring  a  perfect 
title  against  that  mortgage  by  the  purchase.^  The  mortgagor 
is  estopped  from  denying  the  title  he  has  set  forth  in  his  mort- 
gage ;  ^  and  all  the  parties  to  the  foi-eclosure  suit  are  estopped 
from  disputing  the  title  acquired  by  the  purchaser  under  the  sale.* 
The  purchaser  occupies  the  same  position,  as  to  the  priority  of 
claims  or  liens  on  the  property,  that  the  mortgagee  did.^ 

After  a  foreclosure  sale  a  mortgagee  has  no  such  ownership  of 
the  property  as  will  enable  him  to  charge  the  premises  with  a  lien 
for  labor  done  and  materials  furnished.^ 

1655.  Errors  in  deed.  —  If  the  master's  deed  by  inadvertence 
embraces  the  whole  mortgaged  premises,  of  which  a  portion  had 
been  released  from  the  operation  of  the  mortgage  and  was  ex- 
cepted from  the  operation  of  the  decree,  no  title  to  the  released 
portion  passes  to  the  purchaser.'^  Even  if  this  portion  of  the 
premises  had  been  embraced  in  the  decree,  but  were  not  offered 
at  the  sale,  the  title  would  not  pass  by  the  conveyance.^ 

Where  a  mortgage  by  reason  of  an  error  in  the  description  did 
not  cover  the  entire  tract  intended  to  be  mortgaged,  and  the 
error  was  first  discovered  after  a  foreclosure  sale  and  conveyance 
to  a  purchaser  who  supposed  he  was  buying  the  whole  tract,  he 
was  protected  in  the  possession  of  the  whole.^  Usually,  however, 
the  property  to  which  the  purchaser  acquires  title  is  coextensive 
with  the  description  contained  in  the  mortgage,  the  bill  to  fore- 
close, and  the  order  or  writ  under  which  the  sale  is  made.^^ 

After  the  sale  is  completed  and  the  money  paid  over  by  the 
purchaser,  he  cannot  have  the  sale  set  aside  and  the  money  repaid 

1  Zollman   v.  Moore,   21    Gratt.  (Va.)        ^  Davis  v.  Conn.  Mut.  Life  Ins.  Co.  84 
313  ;    Gillett  v.  Eaton,  6  Wis.  30  ;   Tall-     111.  508. 

man  v.  Ely,  6  Wis.  244.  6  Davis  v.  Conn.  Mut.  Life  Ins.  Co.  su- 

2  Brown  v.  Winter,  14  Cal.  31.  pra. 

8  Vallejo  Land  Assoc,  v.  Viera,  48  Cal.  ''  Laverty  v.  Moore,  32  Barb.   (N.  Y.) 

572.  347. 

*  McGce  V.  Smith,  16  N.  J.   Eq.  462;  »  Laverty  v.  Moore,  33  N.  Y.  658,  af- 

White  V.  Evans,  47  Barb.   (N.    Y.)   179;  firminf^  the  above. 

Holden   v.    Sackett,    12  Abb.  (N.  Y.)  Pr.  '■>  Waldron  v.  Letson,  15  N.  J.  Eq.  (2 

473.  McCart.)  126. 


540 


10  McGee  v.  Snaith,  16  N.  J.  Eq.  462. 


THE  DEED,   AND  PASSING   OF  TITLE.      [§§  1656,  1657. 

by  reason  of  a  mistake  in  the  mortgage  deed,  whereby  land  not 
belonging  to  the  mortgagor  was  described  instead  of  his  own 
land.i' 

1656.  After-acquired  title.  —  Ordinarily  the  title  ordered  to 
be  sold  is  only  the  title  which  was  held  by  the  mortgagor  at  the 
date  of  the  mortgage.^  A  title  subsequently  acquired  by  the 
mortgagor  will  generally  be  subjected  to  the  lien  of  the  mort- 
gage when  that  contains  full  covenants  of  warranty,^  even  if  it 
was  given  to  secure  the  purchase  money  of  land,  the  title  of  which 
proves  defective  and  the  mortgagor  makes  it  good  from  another 
source,  the  mortgagee  having  conveyed  to  him  without  covenants 
and  without  fraud  ;  •*  and  even  a  title  acquired  by  a  purchaser 
from  the  mortgagor  after  his  purchase  may,  under  equitable  cir- 
cumstances, be  subjected  to  the  lien  in  the  same  manner.  But 
in  order  to  subject  such  after-acquired  title  to  sale,  the  facts 
should  be  set  forth  in  the  complaint,  and  the  decree  should  ex- 
pressly cover  the  after-acquired  title.^ 

1657.  Fixtures.  —  The  purchaser's  deed  taking  effect  by  rela- 
tion at  the  date  of  the  mortgage  passes  the  property  as  it  then 
was  with  all  fixtures  subseqaently  annexed  by  the  mortgagor,  such 
as  an  engine  and  boilers  used  in  a  flour-mill  and  permanently  at- 
tached to  the  premises.^  The  rule  that  whatever  is  fixed  to  the 
freehold  becomes  a  part  of  it  applies  as  strictly  between  the  mort- 
gagor and  mortgagee  as  between  vendor  and  vendee.'^  The  pur- 
chaser acquires  title  to  the  fixtures  as  a  part  of  the  realty.  If 
they  are  wrongfully  severed  by  any  one  after  the  sale,  though  be- 
fore the  execution  of  a  deed  to  the  purchaser,  he  may  sue  for 
them  in  trover  or  take  them  by  replevin,^  or  may  recover  dam- 
ages in  an  action  of  waste.^  A  mortgagee  who  comes  into  posses- 
sion of  the  premises,  by  virtue  of  a  decree  of  strict  foreclosure, 
acquires  title  to  a  barn  erected  on  the  premises  during  the  pen- 
dency of  the  foreclosure  suit  by  a  stranger  with  permission  of  the 
mortgagor.^" 

>  Nt-al  V.  Gillaspy,  50  In<l.  451.  «  See  §§  428-452  ;  Rands  v.  PfcifTcr,  10 

2  San  Francisco  v.  Lawton,  18  Cal.  465.  Cal.  258. 

8  Bybec  v.  Ilageman.  60  111.  519.  ^  Gardner  i;.  Finlcy,  19  Uarl).  (N.  Y.) 

♦  Hitchcock    V.    Forticr,    65     111.     239.  317. 
Otherwise,  where  the  mortga^je  contained  '  §§  453-455. 

no  covenantB  of  warranty.     Smith  v.  De         •  Lackas  v.  Bahl,  43  Wis.  5.3.' 
Russy,  29  N.  .J.  Eq.  407.  "  I'reston  v.  Briggs,  10  Vt.  124. 

*  Kreichbaum  v.  Melton,  49  Cal.  50. 

541 


§§  1(5.')8-1(>G0.]   FORKCLOSUKK  SALKS  UNOKR  DKORKK  OK  COURT. 

1658.  The  purchaser  is  entitled,  to  the  crops  growing  at  the 
time  of  the  lU'livery  of  the  ileed  to  him  in  preference  to  tlie  mort- 
g<\gor  or  any  one  claiming  under  him  whose  chiim  originated  sub- 
sequently to  the  mortgage  ;  ^  and  he  is  entitled  in  preference  to 
one  who  bids  off  the  property  at  a  sale  subsequently  made  by  the 
assignee  in  bankruptcy  of  the  mortgagor.^  If,  howevei",  the  grow- 
ing crop  be  expressly  reserved  at  the  sale,  it  having  been  previ- 
ously sold  by  the  mortgagee  as  administrator  of  the  mortgagor, 
the  purchaser  acquires  no  title  to  it.^  But  the  sheriff  or  other 
officer  in  selling  has  no  authority  to  reserve  the  way  going  crops. 
If  he  does  so,  but  does  not  make  the  reservation  in  the  deed,  it 
■will  pass  the  crops  to  the  purchaser.* 

1659.  The  rents  accruing  between  the  day  of  sale  and  the 
delivery  of  the  deed  belong  to  the  owner  of  the  equity  of  redemp- 
tion, and  not  to  the  purchaser,  as  they  go  with  the  possession,  or 
the  right  of  possession  ;  and  generally  the  purchaser  is  not  en- 
titled to  possession,  or  to  the  rents,  until  he  has  made  a  demand 
for  possession  under  his  deed.^  By  statute  the  judgment  debtor 
not  redeeming  may  be  made  liable  to  the  purchaser  for  the  rent 
of  the  premises,  or  for  use  and  occupation  of  the  same,  after  the 
sale.'' 

1660.  When  a  mortgagee  purchases  at  a  sale  of  the  prem- 
ises under  a  decree  of  court,  no  deed  from  the  trustee  appointed 
to  make  the  sale  is  requisite  to  invest  him  with  the  legal  title. 
The  decree  of  sale  does  not  of  course  operate  as  a  conveyance  of 
the  legal  title,  but  the  purchaser,  though  a  stranger,  becomes  the 
substantial  owner  of  the  property  from  the  moment  the  sale  is 
ratified.  He  is  entitled  to  possession,  and  no  one  can  eject  him. 
But  when  the  mortgageer  purchases  the  title,  according  to  the  doc- 
trine of  the  common  law  the  legal  title  is  already  in  him,  and  the 
sale  confirms  him  in  the  possession  of  the  property  ;  and  with- 

1  Shepard  v.  Philbrick,  2  Den.  (N.  Y.)         8  Sherman  v.  Willett,  42  N.  Y.  146. 
174;   Jones   v.  Thomas,  8  Blackf.   (Ind.)         *  Lowell  v.  Schenck,  24  N.  J.  Eq.   (4 
428  ;  Lane  v-  King,  8  Wend.  (N.  Y..)  584  ;     Zab.)  89. 

Crews  r.  Pendleton,  1  Leigh  (Va.),  297;  »  Clason   v.   Corley,  5    Sandf.   (N.  Y.) 

Parkers.  Storts,  15  Ohio  St.  351.    In  Cas-  447;   Astor  i>.  Turner,  11  Paige  (N.  Y.) 

Billy  W.Rhodes,   12  Ohio,  88,  it  was  held  436;    Mitchell   v.  Bartlett,  52  Barb.  (N. 

that  a  tenant  of  the  mortgagor  was  enti-  Y.)  319.     See  §  1120. 

tied  to  the  annual  crops.  ^  As  in  Indiana  :  2  R.  S.  1876,  p.  720 ; 

2  GJllctt  V.  Balcolm,  6  Barb.  (N.  Y.)  Gale  i;.  Parks,  58  Ind.  117;  Clemens  v. 
370.  Robinson,  54  Ind.  599. 

542 


THE   DEED,    AND   PASSING    OF   TITLE.       [§§  1661,  1662. 

out  a  deed   from  the   trustee  he  can  maintain  ejectment  for  the 
property.^ 

1661.  The  purchaser  has  no  legal  title  until  the  time  al- 
lowe4  for  redemption  has  expired.^  He  cannot  on  his  certifi- 
cate of  purcliase  maintain  ejectment  or  other  possessory  action. 
He  is  not  entitled  to  possession  until  a  deed  has  been  executed  to 
him  by  the  officer  selling.^  He  acquires  only  a  lien  ;  no  new  title 
vests  till  the  period  of  redemption  has  passed.  His  deed  will  re- 
late back,  it  is  true,  to  the  beginning  of  his  lien,  in  order  to  cut 
off  intervening  incumbrances ;  but  it  will  not  carry  back  the  ab- 
solute divestiture  of  title,  as  is  evident  from  the  fact  that  neither 
judgment  debtor  nor  mortgagor  can  be  called  to  account  for  rents 
and  profits.  His  title  becomes  absolute  only  when  his  right  to  a 
deed  accrues.  The  mortgagor  still  has  the  estate  of  a  mortgagor, 
with  this  qualification,  that  the  amount  and  time  of  redemption 
have  become  absolutely  fixed  by  the  decree  of  sale,  and  his  estate 
will  be  absolutely  divested  if  he  fails  to  redeem  within  the  allotted 
time.* 

But  the  mortgagor,  though  entitled  to  the  possession  until  the 
period  of  redemption  has  expired,  is  liable  for  any  injury  he  may 
do  to  the  premises  by  cutting  and  carrying  away  growing  tim- 
ber.^ He  might  be  restrained  from  committing  waste  by  injunc- 
tion.^ 

1662.  An  appeal  does  not  affect  a  sale  previously  made. 
The  judgment  of  the  court  being  conclusive  so  long  as  it  stands 
unreversed  and  without  appeal,  a  sale  made  under  it  before  any 
appeal  is  taken  and  the  execution  of  the  judgment  stayed  is  not 
affected  by  any  appeal  afterwards  taken,  though  that  part  of  the 
decree  directing  the  sale  to  be  made  by  a  referee,  instead  of  the 
sheriff,  be  set  aside  as  erroneous.^ 

1  Laiinay  v.  Wilson,  30  Md.  536.  See  "<  Armstrong  v.  Ilumphrcya,  5  S.  C. 
§§  1892,  1893.  128;  Breese  v.  Bange,  2  K.  1).  Smith  (N. 

2  Uockwell  V.  Servant,  63  111.424;  Dc-  Y.),  474;  Blakeley  v.  Culdcr,  15  N.  Y. 
lahay  r.  McConnel,  5  111.  (4  Scam.)  156.  617;    Buckmastcr    v.   Jackson,  3   Scam. 

'Bennett     i;.    Maison,     41     III.    333;  (III.)  104  ;  Ilolden  v.  Sackctt,  12  Abb.  (N. 

O'Brian  v-  Fry,  82  111.  274  ;  S.  C.  lb,  87.  Y.)  Pr.  473. 

*  Stephens  v.  111.  Mut.  F.  Ins.  Co.  43  In  Gray  v.  Brignardello,  1  Wall.  634, 
III.  327  ;  Sweczy  v.  Chandler,  11  III.  445  ;  Mr.  Justice  Davis  stMtc<I  the  rule  to  be, 
Johnson  i;.  Biiker,  38  111.  VJ-  that  "although   the  judgment  or  decree 

*  Stout  V.  Keyes,  2  Dougl.  (Mich.)  184.     may  be  reversed,  yet  all  righta  acquired  at 
«  Phcenix    i-.    Cliirk,  6    N.   J.    Eq.    (2     a  judicial   sale  while  the  decree  or  judg- 

Hal8t.)447.     Sec  §§  684-698.  ment  were  in  full   force,  and  which  they 

54;i 


§  16G8.]   FORECLOSURE  SALES  UNDER  DECREE  OF  COURT. 

Tlu'  vu\v  is  tlu'  s:uiu',  altlioii^li  tli(>  })nri'lKisor  w;is  one  of  the 
parties  to  the  suit  ;  ^  or  even  if  ho  had  nolico  at  tho  time  of  the 
sale  that  an  elTort  would  be  made  to  obtain  a  reversal  of  the  de- 
cree.2  The  law  does  not  require  a  purchaser  to  inspect  the  record 
and  to  see  that  it  is  free  from  error.  All  that  is  required  of  him 
is  to  see  that  there  is  a  subsisting  judgment  by  a  court  having 
jurisdiction  of  the  case.  "  If  such  was  not  the  rule,  no  one  would 
become  a  pui-chaser  at  a  judicial  sale,  and  all  competition  would 
cease,  and  plaintiffs  would  become  purchasers  at  their  own  price,"  ^ 

8.    The  Deliver^/  of  Possession  to  Purchaser. 

1663.  Possession  delivered,  to  purchaser.  —  It  has  long  been 
the  practice  of  courts  of  chancery  in  England,  adopted  also  in 
this  country,  wherever  a  sale  and  conveyance  of  real  estate  has 
been  decreed,  to  compel  the  person  in  possession  of  the  property 
to  surrender  it  to  the  purchaser,  by  an  order,  or  by  injunction,  or 
by  a  writ  of  assistance.  Lord  Hardwicke  said  that  this  practice 
had  its  origin  in  the  reign  of  James  I. ;  ^  but  Mr.  Eden  says  that 
this  statement  is  a  mistake,  as  many  precedents  for  injunctions  to 
deliver  possession  after  a  decree,  and  a  commission  or  writ  of  as- 
sistance to  the  sheriff,  are  in  the  printed  reports  as  early  as  the 
reign  of  Queen  Elizabeth  ;  and  also  are  found  in  a  manuscript 
book  of  orders  in  the  time  of  Henry  VIII.,  Edward  VI.,  and 
Mary.^  But  whenever  the  practice  was  begun,  it  has  long  been 
fully  established  both  in  England  and  in  this  country,''  and  is 
applied  to  sales  under  decrees  in  foreclosure  suits. 

Accordingly,  after  a  sale  has  been  made  under  a  decree  in  a 
foreclosure  suit,  the  court  has  power  to  give  possession  to  the  pur- 
chaser, though  the  delivery  of  possession  is  not  made  part  of  the 
decree.      He  is  not  driven  to  an  action  of  ejectment  at  law  to 

authorized,  will   be  protected.      It  is  suffi-  *  Roberdeau  v.  Rous,  1  Atk.  543  ;  Penn 

cient  for  the  buyer  to  know  that  the  court  v.  Lord  Baltimore,  1  Ves.  Sen.  444. 

had  jurisdiction  and  exercised  it,  and  that  ^  Eden   on    Injunctions,    261  ;    Water- 

the  order,  on   the  faith  of  which  he  pur-  man's  ed.  2d  vol.  425. 

chased,   was    made,   and    authorized    the  ^  Dove  y.  Dove,  Dickens,  617;  S.C.I 

sale."     And  see  Bank  of  U.  S.  v.  Voor-  Bro.  Ch.  375;    Huguenin  v.  Baseley,  15 

hees,  1  McLean,  221.  Ves.  180;  Dorsey  v.  Campbell,  1  Bland 

1  Gossom  V.  Donaldson,  18  B.  Mon.  (Md.),356,  363 ;  Garretson  i\  Cole,  1  Har. 
(Ky.)  230.  &  John.  (Md.)  387  ;  Buffum's  case,  13  N. 

2  Irwin  V.  Jeffers,  3  Ohio  St.  389.  H.  14. 
8  Fergus  v.  Woodworth,  44   111.   374, 

384. 

544 


THE   DELIVERY   OF   POSSESSION   TO   PURCHASER. 


[§  166^ 


obtain  possession.^  But  if  the  person  in  possession  was  not  a 
party  to  the  suit,  and  is  a  mere  stranger  who  entered  into  posses- 
sion before  the  suit  was  begun,  he  cannot  be  tui-ned  out  of  posses- 
sion by  an  execution  on  the  decree.^  Had  he  come  into  possession 
pendente  lite,  he  would  be  bound  by  the  decree  in  the  same  man- 
ner as  the  defendant  is.^  So  long  as  the  owner  of  the  premises  is 
in  possession,  and  has  the  right  to  redeem  under  a  prior  mortgage, 
a  purchaser  under  a  foreclosure  sale  of  a  subsequent  mortgage  can- 


1  Jackson  v.  "Warren,  32  111.  331 ;  Tra- 
bue  V.  Ingles,  6  B.  Mon.  (Ky.)  82  ;  Suffern 
V.  Johnson,  1  Paige  (N.  Y.),450;  Freling- 
huysen  v.  Colden,  4  Taige  (N.  Y.),  204; 
Van  Hook  v.  Throckmorton,  8  Paige  (N. 
Y.),  33;  McGown  v.  Wilkins,  1  Paige 
(N.  Y.),  120;  Kershaw  v.  Thompson,  4 
Johns.  (N.  Y.)  Ch.  609;  Bolles  v.  Duff, 
43  N.  Y.  469 ;  Williams  v.  Waldo,  3 
Scam.  264;  Creighton  v.  Paine,  2  Ala. 
158;  Bright  v.  Penny  wit,  21  Ark.  130; 
Ludlow  I'.  Lansing,  Hopk.  Ch.  231  ;  Val- 
entine V.  Teller,  lb.  422 ;  Skinner  v. 
Beatty,  16  Cal.  156;  Horn  r.  "Volcano,  &c. 
Co.  18  Cal.  141. 

Chancellor  Kent,  in  Kershaw  v.  Thomp- 
son, supra,  fully  examines  the  question  of 
the  power  of  a  court  of  equity  to  give  pos- 
session of  property  sold  under  its  decree, 
and  in  his  luminous  opinion  says  :  — 

"  It  does  not  appear  to  consist  with 
sound  principle  that  the  court  which  has 
exclusive  authority  to  foreclose  the  equity 
of  redemption  of  a  mortgagor,  and  can 
call  all  the  parties  in  interest  before  it 
and  decree  a  sale  of  the  mortgaged  prem- 
ises, should  not  be  able  even  to  put  the 
purchaser  into  possession  against  one  of 
the  very  parties  to  the  suit,  an<l  who  is 
bound  by  the  decree.  When  the  court  has 
obtained  lawful  jurisdiction  of  a  case,  and 
has  investigated  and  decided  it  upon  its 
merits,  it  is  not  sufficient  for  the  ends  of 
justice  merely  to  declare  the  right  with- 
out affording  the  remedy.  If  it  was  to  be 
understood  that  after  a  decree  antl  hale  of 
mortgaged  premises,  the  mortgagor,  or 
other  party  to  the  suit,  or,  |>erhap8,  those 
who  have  been  let  into  the  fjossession  by 
the  mortgagor  pendente  lit'-,  could  with- 
VOL.  II.  35 


hold  the  possession  in  defiance  of  the  au- 
thority of  this  court,  and  compel  the  pur- 
chaser to  resort  to  a  court  of  law,  I  appre- 
hend that  the  delay,  and  expense,  and  in- 
convenience of  such  a  course  of  proceeding 
would  greatlf  impair  the  value  and  dimin- 
ish the  results  of  sales  under  a  decree 

The  distribution  of  power  among  the 
courts  would  be  injudicious,  and  the  ad- 
ministration of  justice  exceedingly  defec- 
tive, and  chargeable  with  much  useless 
delay  and  expense,  if  it  were  necessary  to 
resort,  in  the  first  instance,  to  a  court  of 
equity,  and  afterwards  to  a  court  of  law, 
to  obtain  a  perfect  foreclosure  of  a  mort- 
gage. It  seems  to  be  absurd  to  require 
the  assistance  of  two  distinct  and  separate 
jurisdictions  for  one  and  the  same  remedy, 
viz.,  the  foreclosure  and  possession  of  the 
forfeited  pledge.  But  this  does  not,  upon 
due  examination,  apjtear  to  be  the  case  ; 
and  it  may  be  safely  laid  down  as  a  gen- 
eral rule,  that  the  power  to  apply  the 
remedy  is  coextensive  with  the  jurisdic- 
tion over  the  subject  matter." 

In  New  Jersey  the  jjracticc  is  of  recent 
adoption  ;  but  the  propriety  of  it,  and  the 
power  of  the  court  to  apjdy  it,  arc  fully  es- 
tal)lished  in  the  case  of  Schenck  v.  Con- 
over,  13  N.J.  Eq.  220. 

In  Now  York  it  is  now  ])rovided  by 
statute  that  where  any  person  shall  con- 
tinue in  possession  of  any  real  estate  sold 
pursuant  to  the  foreclosure  of  a  mortgage, 
possession  may  be  recovered  by  summary 
procecdin-fl.  3  R.  S.  82.J  ;  Laws,  1874, 
c.  208. 

2  Benhard  v.  Darrow,  Walker's  Ch. 
(Mich.)  5i;». 

8  Kessinger  v.  Whittakcr,  H'2  111.  22. 

545 


§  lOlJo.]       FORECLOSURK   SALKS    UNDER    DECREE   OF   COURT. 

not  recover  possession  from  him.  He  has  the  legal  right  to  retain 
possession  nntil  such  equity  has  been  foreclosed  and  sold  under 
the  prior  mortgage  ;  and  it  does  not  matter  that  he  is  barred  by 
the  statute  of  limitations  from  bringing  his  suit  to  redeem  it.^ 

The  remedy  for  obtaining  possession  when  this  is  wrongfully 
withheld  from  the  pui-chaser  is  an  order  of  court,  which  if  not 
obeyed  may  be  followed  by  an  injunction,  or  if  need  bo  by  a  writ 
of  assistance.^  If  the  order  for  the  delivery  of  possession  be  not 
included  in  the  decree,  a  special  order  may  be  entered  ;  but  the 
writ  of  assistance  may  follow  after  a  I'efusal  to  obey  the  order.^ 
It  will  be  granted  also  at  the  instance  of  the  purchaser,  or  of  the 
complainant ;  and  it  may  be  issued  not  only  against  the  defend- 
ant, but  as  well  against  any  person  in  possession  under  him,  or 
holding  by  any  title  not  paramount  to  the  mortgage.*  If  a  ten- 
ant is  in  possession,  the  deed  should  be  shown  him  by  the  pur- 
chaser when  he  makes  demand  of  possession,  and  upon  his  refusal 
to  comply,  notice  of  the  application  to  court  should  be  given.^ 
As  against  a  party  to  the  suit  the  writ  will  be  granted  upon  a 
motion  ex  parte,  but  it  would  seem  that  one  who  has  come  into 
possession  pendente  lite  would  be  entitled  to  notice  of  the  motion.** 
The  writ  of  assistance  is  the  only  process  necessary  for  giving 
possession,  and  should  issue  in  the  first  instance  without  a  prior 
injunction,  upon  proof  of  the  service  of  the  order  to  deliver  pos- 
session and  of  refusal  to  comply  with  it." 

1  Wells  V.  Pierce,  42  N.  Y.  102.  ^  O'Brian  v.  Fry,  82  111.  87 ;  Oglcsby  v. 

2  Montgomery   v.   Tutt,    11    Cal.   190;     Pearce,  68  111.    220;    Kessinger   v.  Whit- 
O'Brlan  v.  Fry,   82   111.   87  ;    Aldrich   v.     taker,  82  111.  22. 

Sharp,  4  111.   (3  Scam.)   261 ;  Kershaw  v.  *  Schenck   v.    Conover,    13    N.   J.   Eq. 

Thompson,  4   Johns.    (N.    Y.)    Ch.   609;  220. 

Van  Hooky.  Throckmorton,  8  Paige  (N.  6  Fackler  v.  Worth,    13  N.   J.    Eq.    (2 

Y.),  33;  Frelinghuysen  y.  Golden,  4  Paige  Beas.)  395;  N.  Y.  Life  Ins.  &   Fire  Co. 

(N.  Y),  204.  V.  Rand,  8  How.  (N.  Y.)  Pr.  39. 

In    South   Carolina,    under   the   recent  <>  Benhardy.  Darrow,  Walk.  Ch.  (Mich.) 

Code,  the  remedy  is  an  order  of  the  court,  519  ;  Commonwealth  v.  Ilagsdalc,  2  Hen. 

and   a  writ  of  habere  facias  possessionem  &  Mun.  (Va.)  8;  Lynde  y.  O'Donnell,  12 

Is  not  necessary  or  proper.     Armstrong  v.  Abb.  (N.  Y.)  Pr.  286  ;  21  How.  Pr.  34. 

Humphreys,  5  S.  C.  128.  ^  2  Daniel's  Ch.  Pr.  1280;  Schenck  v. 

In  Alabama  an  appeal   from  the  order  Conover,  supra ;  Hart  v-  Linsday,  Walk, 

directing  a  writ  of  assistance  to  issue  may  (Mich.)  144;  Valentine  y.  Teller,  Hopk. 

be  taken  by  the  tenant  against  the  pur-  Ch.  (N.  Y.)  422;  Ballinger  y.  Waller,  9 

chaser,  though  a  writ  of  error  will  also  lie.  B.  Mon.  (Ky.)  67. 
Creighton  v.  Planters'  &  Merchants'  Bank, 
3  Ala.  156. 

546 


THE   DELIVERY    OF    POSSESSION   TO    PURCHASER.       [§  1664-1666. 

1664.  Possession  will  be  given  to  the  purchaser  not  only  as 
against  all  the  parties  to  the  suit,  but  also  as  against  any  per- 
sons who  have  come  into  possession  under  them  pending  the  suit.^ 
But  possession  acquired  by  any  one  after  the  purchaser  has  re- 
ceived his  deed  and  conveyed  the  premises  to  another  will  not 
be  interfered  with.  Neither  is  one  who  enters  fifteen  months 
after  the  sale  deemed  as  having  entered  pending  the  suit,  and 
therefore  he  cannot  be  removed  by  a  writ  of  assistance,  though 
he  entered  under  a  party  to  the  suit.^  Though  one  enter  pend- 
ing the  suit,  if  he  did  not  enter  under  a  party  to  the  suit,  or 
under  any  one  who  had  derived  title  to  the  premises,  or  had  gone 
into  possession  of  them  under  a  party  pending  the  suit,  he  cannot 
be  turned  out  of  possession  under  the  decree ;  ^  as,  for  instance, 
if  he  purchased  after  the  commencement  of  the  suit,  at  a  sale 
under  a  judgment  against  the  mortgagor  recovered  before  that 
time.* 

1665.  If  the  person  in  possession  shows  a  right  paramount 
to  the  mortgage,  of  course  the  court  will  not  attempt  to  decide 
any  question  of  legal  title,  and  the  possession  must  then  be  sought 
for  by  proceedings  at  law.  Such  would  be  the  case  when  the 
party  in  possession  claims  under  a  lease  made  before  the  mortgage 
under  which  the  sale  has  been  made..^  If  the  purchaser  allows 
the  mortgagor  to  remain  in  possession  under  an  agreement  to  re- 
deem, he  is  after  that  in  possession  under  this  contract,  and  not 
as  defendant  in  the  foreclosure  suit ;  and  therefore  he  cannot  be 
removed  under  a  writ  of  assistance.**  The  exercise  of  the  power 
of  the  court  to  deliver  possession  in  arty  case  rests  in  the  sound 
discretion  of  the  court,  and  in  cases  of  doubtful  right  the  posses- 
sion will  be  left  to  legal  adjudication." 

1666.  Until  the  purchaser  has  complied  with  the  terms  of 
sale,*^  and  a  deed  has  been  executed  to  him  by  the  selling  uilicer, 
he  is  not  entitled  to  an  order  of  court  to  be  let  into  possession." 

»  Bell   V.  Birdsiill,  19  How.  (N.  Y.)  I'r.  «  Toll  i'.  Ilillcr,  11    Taigc   (N.  Y.),  228. 

491 ;    Ke.sMn),'er  v.  VVhitUiker,   82    III.  22.  '   McKotiib    i;.    Kiinkuy,     1    IJlaiid    Ch. 

2  Belts  u.  BirdNall,  11  Abl).  (N.  Y.)  Tr.  (Md.)  ;)f..3,  note  c. ;  Tliotiiiis  v.  Du  Uiimn, 

222  ;   I'J  How.  I'r.  491.  14  N.  J.  i:<i.  37. 

'  Van  Hook  v.  Throckmorton,  8  Paige  "  Armstrong   v.    Hiun|)hrfys,    .'i    .S.    C. 

(N.  Y.),  3:{.  128. 

*  Frelingluiyscn  y.  Oolderi,  4  I'aigc  (N.  *  Clason  v.  Corlcy,  5  Sandf.  (N.  Y.) 
v.),  204.  447;    Bennett    v.    Miitson,    41     111.    X\'l; 

*  Thomas  v.  De  Baum,  14  N.  J.  Eq.  37.  Myers  v.  Manny,  63  III.  211.     In  Wiscon- 

647 


§§  1G()7,  1608.]       FORKCLOSURE   SALKS   UNDKR   DKCRKK   OF   COURT. 

lie  is  iKit  entitled  to  :i  deed  until  he  luis  paid  llie  whole  of  the 
purchase  money.  Evimi  if  the  purchaser  be  a  junior  mortgagee, 
and  is  entitled  to  a  portion  of  the  surplus  money,  he  will  be  re- 
quired to  pay  in  the  whole  of  it,  especially  if  there  are  other  in- 
cumbrancers who  might,  perhaps,  have  claims  upon  the  surplus 
superior  to  his.^ 

As  already  noticed,  a  purchaser  is  not  generally  entitled  to  the 
rents  until  he  receives  a  deed  of  the  property  ;  but  after  this  has 
been  delivered  to  him,  and  he  has  demanded  possession  under  it, 
he  is  entitled  to  the  accruing  rents.^  If  he  is  put  into  possession 
of  the  land  immediately  upon  the  sale  and  before  the  payment  of 
the  purchase  money,  he  is  chargeable  with  interest  upon  this  to 
the  time  of  payment.^ 

1667.  These  summary  proceedings  do  not  preclude  remedy 
by  suit  at  law.'*  In  such  case  the  plaintiff  must  in  the  first  place 
show  a  valid  foreclosure.^  The  validity  and  execution  of  the  mort- 
gage cannot,  however,  be  inquired  into.*"  The  decree  in  the  fore- 
closure suit,  and  the  sale  under  it,  are  conclusive  if  regular  ;  and, 
therefore,  a  mortgagor  cannot  defend  the  action  on  the  ground 
that  the  premises  are  his  homestead  ;  that  defence  is  available 
only  in  the  foreclosure  suit.^ 

9.  Setting  aside  of  Sale. 

1668.  A  sale  under  a  decree  of  foreclosure  may  be  set  aside 
by  a  bill  in  equity  brought  for  the  purpose,  when  the  sale  has 
been  fraudulently  conducted  to  the  prejudice  of  the  plaintiff,  even 
when  he  might  have  a  remedy  by  motion  in  the  original  suit.^ 
He  then  has  a  legal  and  absolute  right  independent  of  the  discre- 
tion of  the  court.'-*  When  the  rights  of  third  persons  have  accrued, 
some  original  proceeding  is  necessary  in  which  these  rights  may 
be  tried  in  the  ordinary  way  :   they  cannot  be  adjudicated  in  a 

sin,  by  rule  of  court  (1857),  the  purchaser  *  Kessinger  v.  Whittaker,  82  111.  22. 

was  entitled  to  be  let  into  possession  be-  '^  Dwight  v.  Phillips,  48  Barb.  (N.  Y.) 

fore  confirmation  of  the  sale.     Loomis  v.  116.      See  Heyman  v.  Babcock,  30  Cal. 

Wheeler,  18  Wis.  524.  367. 

1  Battershall  v.  Davis,  23  How.  (N.  Y.)  «  Hayes  v.  Shattuck,  21  Cal.  51. 
Pr.  383.  ■?  Haynes  v.  Meek,  14  Iowa,  320. 

2  Castleman  v.  Belt,  2  B.  Men.  (Ky.)  «  Vandercook  v.  Cohocs  Sav.  Inst.  5 
157;  Clason  v.  Corley,  5  Sandf.  (N.  Y.)  Hun  (N.  Y.),  641  ;  McMurray  v.  McMur- 
447*.  ray,  66  N.  Y.  175. 

*  Haven  v.  Grand  June.  R.  K.  &  Depot  ^  See  Gould  v.  Mortimer,  26  How.  (N. 
Co.  109  Mass.  88.  Y.)  Pr.  167. 

548 


SETTING   ASIDE   OF    SALE.  [§  1669. 

summary  manner  upon  motion.^  But  ordinarily,  if  there  is  noth- 
ing to  prevent  an  application  in  the  original  suit,  an  original  bill 
for  this  purpose  cannot  be  sustained  ;  ^  and  when  the  proceedings 
are  regular  and  free  from  fraud,  and  the  party  is  only  equitably 
entitled  to  relief,  his  only  remedy  is  by  motion  in  the  foreclosure 
suit,  addressed  to  the  discretion  of  the  court,  to  open  the  biddings 
or  set  aside  the  sale.^  In  allowing  him  to  come  in,  the  court  may 
impose  such  terms  as  may  seem  proper.  This  application  may 
be  made  by  any  one  injured  by  the  proceedings  under  the  decree, 
although  he  is  not  a  party  to  the  suit.'* 

The  motion  for  resale,  when  founded  on  facts  not  apparent 
upon  the  record,  should  properly  be  heard  and  determined  upon 
affidavit.^ 

The  purchaser  under  the  sale  sought  to  be  set  aside  should  be 
made  a  party  to  the  bill,  or  should  be  notified  of  the  motion 
made  for  that  purpose.  Third  persons  who  have  bought  of  the 
first  purchaser  should  in  like  manner  have  an  opportunity  to  be 
heard.^ 

1669.  An  application  for  a  resale  can  be  made  only  by  some 
one  who  is  either  interested  in  the  mortgaged  premises,  or  is 
under  personal  liability  for  a  deficiency.'  A  sale  will  not  be  set 
aside  at  the  instance  of  one  who  was  not  a  party  to  the  suit,  when 
he  was  not  made  a  party  through  his  own  negligence  in  having 
his  deed  recorded,  and  his  grantor,  who  appeared  by  the  record  to 
be  the  owner  of  the  property  when  the  suit  was  brought,  was 
properly  made  a  defendant.^  If  the  applicant  be  a  subsequent 
mortgagee  who  holds  his  mortgage  only  as  collateral  security  for 
the  debt  of  a  third  person,  he  should  on  equitable  grounds  be 
required  to  exhaust  his  remedy  against  the  principal  debtor  be- 
fore he  can  have  the  sale  set  aside.^     It  must  be  made  without 

»  Crawford  v.  Tullcr,  .35  Mich.  57.  ^  Savery  v.  Sypher,  6  Wall.  157. 

2  Brown   v.    Frost,    10  Paige  (N.  Y.),  "  Lawrence    o.   Jarvis,   3fi   Mich.   281  ; 

243.  Crawfonl  v.  Tuller,  .35  Mich.  57. 

»  McCotter  w.  .Toy,  .30  N.  Y.  80;   Smithy  '  Bodino  v.  Edwards,  3  Ch.  Dec.  46; 

V.  Am.  Life  Ins.  Co.  Clarke  (N.  Y.)  Ch.  S.  C.  2  N.  Y.  Leg.  Obs.  231  ;   Gould  v. 

307;    White  v.  Coulter,    1    Hun  (N.  Y.),  Mortimer,    26    How.     (N.    Y.)    Pr.    167; 

357.  May  v.  May,  1 1  Paif,'e  (N.  Y.),  201. 

♦  Gould  V.  Mortimer,  20  How.  (N.  Y.)  "  §  1412;  Leonard  v.  N.  Y.  Bay  Co.  28 

Pr.  167;  Am.  Ins.  Co.  v.  Oakley,  9  Paige  N.J.  Eq.  192. 

(N.   Y.),  259;  Brown   v.    Frost,  10  Paigo  ®  Soule  v.   Ludlow,  3   Hun,  503;  S.  C. 

(N.  Y.),  243  ;  Nichoil  v.  Nicholl,  8  Paige  6  Thomp.  &  C  24 ;  Depew  v.  D.-wcy,  2  S. 

(N.  Y.),.349.  C.  515;  S.  C.  46  How.  (N.  Y.)  Pr.441. 

549 


§  lt>TO.]       FORKCLOSUIM':   SALES   UNDER   DECREE   OF   COURT. 

delay  ;  tli(niLi;li  relief  has  bocMi  granted  even  after  two  or  three 
years,  wIumi  the  purchaser  had  not  parted  with  his  title,  and 
there  was  a  reasonable  excuse  for  the  delay.^ 

A  wife  having  only  an  inchoate  right  of  dower  in  the  premises 
cannot  sustain  an  application  made  in  the  lifetime  of  her  husband 
to  set  aside  a  foreclosure  sale,  or  the  decree  of  sale,  on  the  ground 
tliat  she  was  not  made  a  party  to  the  suit,  or  was  not  properly 
served  with  summons. ^  If,  instead  of  applying  for  a  resale,  the 
party  interested  agrees  with  the  purchaser  for  a  future  redemp- 
tion of  the  premises,  and  for  the  possession  in  the  mean  time,  tlie 
court  will  not  afterwards  set  aside  the  sale.^ 

If  no  one  applies  for  a  resale,  and  all  parties  are  content  that 
the  sale  shall  stand,  and  justice  can  be  done  without  it,  the  court 
will  n(^t  order  a  resale  of  its  own  motion.* 

1670.  After  confirmation  of  the  sale,  it  will  not  be  set  aside 
on  account  of  inadequacy  of  price,  unless  it  be  also  shown  that 
the  sale  was  unfairly  conducted,  or  there  was  fraud  or  surprise  or 
mistake,  which  prevented  the  obtaining  of  any  adequate  price.^ 
The  fact  that  a  liigher  price  may  reasonably  be  expected  on  a 
resale  is  by  itself  no  ground  for  granting  it.^  Any  unfairness  or 
misrepresentation  on  the  part  of  the  purchaser,  by  which  a  per- 
son interested  in  the  property  is  prevented  from  attending  the 
sale  and  bidding,  and  the  purchaser  obtains  the  property  at  a 
price  considerably  below  its  actual  value,  is  a  good  ground  for  set- 
ting the  sale  aside."     Thus  a  resale  was  ordered  where,  upon  fore- 

1  Fergus  v.  Wood  worth,  44  111.  374  ;  471  ;  Hill  v.  Hoover,  5  Wis.  354 ;  Warren 
Nicholl  V.  NichoU,  8  Paige  (N.  Y.),  349.  v.  Foreman,  19  Wis.  35;  Mahone  v.  Wil- 

2  White  V.  Coulter,  1  Hun  (N.  Y.),  357.  liums,  39  Ala.[202  ;  Littell  v.  Zuntz,  2  Ala. 
See,  however,  Cain  v.  Gimon,  36  Ala.  256;  West  v.  Davis,  4  McLean,  241  ;  Bcn- 
168.  ton  V.  Shreeve,  4  Ind.  66  ;  Boyd  v.  Hudson 

«  Toll  1-.  Hillcr,  11  Paige  (N.  Y.),  228.  City  Academical  Soc.  24  N.  J.E(i..349.  In 

*  Eleventh  Ward  Sav.  Bank  v.  Hay,  55  Kneeiand  v.  Smith,  13  Wis.  591,  the  court 

How.  (N.  Y.)  Pr.  444.  refused  to  set  aside  a  sale  fiiirly  made  and 

6  Am.  Ins.  Co.  v.  Oakley,  9  Paige  CN.  confirmed,  on  a  mere  offer  to  bid  $8,000, 

Y.),  259;  Tripp  v.  Cook,  26  Wend.  (N.  where  the  former  bid  was  $7,601  ;  and  so 

Y.)  143 ;  Whitbcck  v.  Rowe,  25  IIow.  (N.  in  Allis  v.  Sabin,  17  Wis.  626,  where  there 

Y.)  Pr.  403  ;  Kellogg  v.  Howell.  62  Barb,  was  an  offer  to  bid  $2,400,  on  a  resale  of 

(N.    Y.)    280;    Thompson    v.    Mount,    1  premise.s,  which  at  the  former  sale  were 

Barb.  (N.  Y.)  Ch.  607  ;  Gould  i;.  Libby,  bid  in  for  $2,000 

24   How.    (N.    Y.)    Pr.   440;*Lefevre    v.  a  King  v.  Piatt,  37N.  Y.  155;  Kellogg 

Laraway,  22  Barb.  (N.  Y.)  167  ;  Eleventh  v.  Howell,  supra. 

Ward  Sav.  Bank  v.  Hay,  55  How.  (N.  Y.)  ?  Murdock  v.  Empie,  9  Abb.   (N.  Y.) 

Pr.  444  ;    Henderson  v.  Lowry,  5   Yerg.  Pr.  283.     The  conditions  imposed  in  this 

(Tenn.)   240;  Strong  v.  Catton,   1   Wis.  case  were  the  return  of  the   deposit  and 

550 


SETTING   ASIDE    OF   SALE.  [§§  1671,  1672. 

closure  of  a  first  mortgage  for  $10,000,  property  worth  $14,000 
was  sold  to  the  first  mortgagee  for  the  amount  of  his  mortgage, 
and  the  second  mortgagee  alleged  that  he  refrained  from  bidding 
on  account  of  the  representations  of  the  first  mortgagee,  and  also 
of  a  third  person,  as  to  the  amount  each  would  bid  for  the  prop- 
erty. The  petitioner  was  required  to  give  security  to  obtain  a 
bid  of  $13,000,  and  to  reimburse  the  purchaser  for  actual  bet- 
terments made  and  taxes  paid  since  the  sale,  with  interest,  be- 
fore applying  any  of  the  proceeds  of  the  sale  to  the  second  mort- 
gage.i 

A  resale  should  not  be  granted  on  the  ground  of  inadequacy  of 
price  when  the  property,  which  was  not  worth  on  the  day  of  sale 
more  than  $10,000,  was  bid  in  by  the  mortgagee  for  $35,000, 
the  mortgagor  having  notice  that  he  would  not  bid  above  that 
sum.2 

1671.  When  the  complainant  himself  becomes  the  pur- 
chaser, the  court  is  always  more  ready  to  open  a  sale  than  where 
the  property  has  been  purchased  by  a  stranger  to  the  suit  for  the 
purpose  of  investment ;  the  sale  is  set  aside  upon  less  evidence 
of  fraud,  surprise,  or  accident,  or  of  the  invalidating  circumstance, 
whatever  it  may  be.^ 

1672.  Neglect  of  officer  selling.  —  The  parties  interested  in 
the  property  have  a  right  to  expect  that  it  will  be  sold  in  the 
usual  manner,  and  in  a  way  to  produce  a  fair  competition  at  the 
sale.  They  will  not  be  relieved  against  their  own  negligence, 
however  inadequate  may  be  the  price  obtained,  unless  it  be  so 
great  as  to  show  fraud  or  unfairness  in  the  sale.  But  relief  may 
be  had  if  the  property  was  sacrificed  by  the  neglect  or  mistake  of 
the  master  or  officer  conducting  the  sale,*  as,  for  instance,  in  sell- 
ing the  whole  premises  together,  when  he  should  have  sold  in 
separate  parcels.^     The  fact  that  a  sale  was  made  in  the  city  of 

the  payment  of  the   expenses,  including  MoU   v.    Walklcy,   3    Edw.  (N.  Y.)  590. 

the  auctioneer'8  fees,  and  $100  for  fees  in  Sec,  also,  Cain  v.  Gimon,  3f>  Ala.  108. 

examining  the  title  ;  and  furthermore  the  ♦  Marsh  i;.  Kiduway,  18  Abh.   (N.   Y.) 

giving  of  a  bond  with  sureties  to  bid  a  Pr.  2fi2  ;  Griffith  v.  Hadley,  10  Bosw.  (N. 

certain  sum  at  the  resale,  and  to  pay  the  Y.)  hUl ;  Minnesota  Co.  v.  St.  Paul  Co. 

expenses  of  it.  2  Wall.  609. 

>  Dawson  v.  Drake,  29  N.  J.  Eq.  383.  ^  Am.  Ins.  Co.  v.  Oakley,  9   I'ai«c  (N. 

2  White  I'.  Coulter,  1  Hun  (N.  Y.),357.  Y.),  259;  Wolcott  v.   Schenck,   23  How. 

»  Tripp  i;.  Cook,  2f.  Wend.  (N.  Y.)  143 ;  (N.  Y.)  Pr.  385.     See  Whitbeck  v.  llowe, 

Gonld  V.  Libby,  24  How.  (N.  Y.)  Pr.  440;  25  How.  (N.  Y.)  Pr.  403. 
Kellogg  V.  Howell,  62  Barb.  (N.   Y.)  280; 

651 


§  IGTo.]   FORECLOSURE  SALES  UNDER  DECREE  OF  COURT. 

New  York  uy^on  the  day  of  tlio  oliarttM-  oU'ction,  though  not  for 
that  reason  void,  yet,  taken  in  connection  with  the  circumstances 
that  a  party  interested  in  obtaining  tlie  best  price  possible  for  the 
])roperty  objected  to  the  sale  on  that  day,  and  made  reasonable  re- 
quests for  a  postponement,  and  for  a  sale  in  a  particular  manner, 
was  held  to  justify  the  court  in  setting  aside  the  sale,  and  order- 
ing the  premises  sold  again. ^ 

If  a  master  has  violated  his  instructions  limiting  the  price  of 
the  property,  of  which  the  purchaser  had  notice,  the  sale  will  be 
set  aside.2  So  if  a  referee  sell  on  terms  not  authorized  by  the 
decree,  a  resale  will  be  ordered ;  ^  or  if  the  master  give  the  im- 
pression to  parties  in  interest  that  the  sale  will  not  take  place  and 
they  in  consequence  do  not  attend  ;  *  or  if  a  commissioner  ap- 
pointed to  make  the  sale  does  not  pursue  the  instructions  of  the 
court  in  respect  to  advertising  the  sale  ;  ^  or  if  a  receiver  sells 
several  distinct  parcels  of  land,  greatly  exceeding  in  value  the 
debt,  in  one  mass,  to  the  prejudice  of  the  debtor  ;^  or  if  the  officer 
requires  payment  of  the  whole  amount  of  the  purchase  money 
within  an  hour  after  the  sale  ; '  or  if  he  sell  a  lot  not  equitably 
liable  for  the  debt.^ 

But  the  neglect  of  a  master  to  give  to  a  person  interested  in  the 
foreclosure  actual  personal  notice  of  the  day  of  sale  in  accordance 
with  a  promise  to  do  so,  is  not  such  an  official  delinquency  as 
would  justify  setting  aside  the  sale.^ 

1673.  Upon  an  application  for  a  resale  the  rights  of  the 
purchaser  will  be  taken  into  account,  and  will  prevail  when  the 
sale  has  been  fair  and  free  from  fraud,  or  other  circumstances, 
which  give  an  undoubted  right  to  have  it  set  aside.^^  There  must 
be  a  good  reason  for  disturbing  the  sale  ;  and  when  there  is  no 
legal  right  to  relief,  and  the  application  is  addressed  merely  to  the 

1  King  V.  Piatt,  37  N.  Y.  155  ;  35  How.  6  Griffith  v.  Iladley,  10  Bosw.  (N.  Y.) 
Pr.  23 ;  3  Abb.  Pr.  N.  S.  434.  587  ;  and  see  Wolcott  v.  Schcnck,  23  How. 

2  Requa  v.  Rea,  2  Paige  (N.  Y.),  339.  (N.  Y.)  Pr.  385  ;  Arnold  v.  Gaff,  58  Ind. 
The  limit  of  price   was   S2,600  and  the  543. 

master  sold  for  SI, 000.  '  Goldsmith  v.  Osborne,  1  Edw.  (N.  Y.) 

*  Hotchkiss  V.  Clifton  Air  Cure,  4  Keyes     560. 

(N.  Y. ),  170.  8  Breese  v.  Bu.sby,  13  How.  (N.  Y.)  485. 

*  Collier  V.  Whipple,  13  Wend.  (N.  Y.)         »  Crumpton  v.  Baldwin,  42  111.  165. 
224.  1'^  Gardiner  v.  Schermerhorn,  Clarke  (N. 

6  Vanbussum  v.  Maloney,  2  Mete.  (Ky.)     Y.),  102. 
5.50 ;  Denning  v.  Smith,  3  Johns.  (N.  Y.) 
Ch.  332. 

552 


SETTING   ASIDE   OF   SALE.  [§  1674. 

discretion  of  the  court,  the  court  will  consider  the  equities  of  all 
the  parties,  to  the  end  of  giving  substantial  justice.^ 

It  is  no  good  cause  for  setting  aside  a  foreclosure  sale  that  it  was 
advertised  in  a  newspaper  of  small  circulation  ;  ^  or  that  the  mas- 
ter has  failed  to  report  the  sale  at  the  next  term  of  the  court.^ 
Nor  that  the  judgment  was  entered  for  too  large  an  amount ;  *  for 
the  court  cannot  inquire  whether  the  judgment  was  too  large  or 
too  small,  or  investigate  the  proceedings  in  the  suit  prior  to  the 
decree,  upon  an  application  to  set  aside  a  foreclosure  sale  ;  ^  nor 
that  the  original  mortgagee  who  had  assigned  the  mortgage  and 
guaranteed  the  payment  of  it,  but  was  a  party  to  the  foreclosure 
suit,  did  not  know  of  the  time  and  place  of  sale,  for  he  was  bound 
to  use  due  diligence  in  obtaining  this  information,  if  he  wished  to 
protect  his  interests ;  ^  nor  that  a  ]iarty  to  the  suit  was  too  blind 
to  read  the  newspapers  and  had  no  notice  of  the  sale,  and  the 
property  sold  for  much  less  than  its  value.'' 

A  sale  should  not  be  set  aside  on  account  of  a  mere  irregularity 
in  the  sale,  as  in  selling  the  homestead  together  with  other  prem- 
ises, without  inquiring  whether  the  otlier  lands  cannot  first  be  sold 
separately,  unless  it  be  shown  that  injury  was  done  by  such  irreg- 
ularity.^ A  sale  on  a  decree  of  foreclosure  cannot  be  impeached 
collaterally  for  any  irregularity  in  the  proceedings ;  ^  or  because 
the  decree  was  prematurely  entered ;  ^°  or  because  the  mortgage 
was  not  duly  executed. ^^ 

1674.  Waived  by  delay.  —  Any  irregularity  in  a  sale  which 
renders  it  voidable  will  be  deemed  to  be  waived,  if  it  is  not  taken 
advantage  of  within  a  reasonable  time  and  before  iimocent  parties 
acquire  rights.^^     After  a  delay  of  seven  or  eight  years,  the  court 

»  Wiley  V.  An(,'il,  Clarke  (N.  Y.),  217  ;  ^  Aldcrson  v.  Bell,  9  Ciil.  315. 

Tripp   V.  Cook,  20  Weiul.   (N.   Y.)  143;  ii  Iliiyes  i-.  Shattuck,  21  Ciil.  51. 

Cole  V.  Miller,  f.O  Ind.  403.  '-  Uigney  v.  Siiiali,  00  III.  416.     In  this 

2  Wake  V.  Hart,  12   How.  (N.  Y.)  Pr.  case  the  inurtgaKor  waited  nine  years  ho- 

444.  fore  hriiiging  his  bill  to  redeem.    In  Hnmil- 

»  Walker  v.  Schum,  42  III.  462.  ton  i-.  Lul.ukee,   51    III.  415,  it  was  held 

*  Young  V.  Bloomer,  22  How.  (N.  Y.)  that    a   mortgagor,   after   delaying    four 

I»r.  383.  years  from  the  time  he  had  knowleilgc  of 

'  Bullard  v.  Green,  10  Mich.  268.  the  sale  and  j)roceedingH  under  it,  eould 

•>  McCotter,  v.  Jay,  30  N.  Y.  80.  not  redeem  as  agiiinst  remote  imrehascrs, 

'  Parkhurst  v.   Cory,  11    N.  J.  Eq.  (3  on  the  ground  of  defective  notice  of  the 

Stock.)  233.  sale  and   inadeciuacy   of  price.     See  Mc- 

»  Lloy<l  r.  Frank,  30  VVis.  306.  Murray  v.  McMurray,  06  N.  Y.  175. 
»  Nagle  V.  Macv,  9  Cal.  426.  ;" 

553 


§§   IGT."),  IGTG.]       FORECLOSURE   SALES   UNDER   DECHK.K   OF   COURT. 

doclinod  to  inqniro  wlietlior  the  price  bid  was  adoquatp,  or  whether 
tlie  property  shouUl  have  been  soUi  in  smaller  quantities.^  After 
•A  delay  beyond  the  period  prescribed  by  statute,  within  which  an 
action  to  redeem  the  mortgage  can  be  brought,  the  court  has  no 
power  to  set  aside  the  sale.'-^ 

A  mortgagor,  by  inducing  a  person  to  purchase  the  certificate 
under  a  foreclosure  sale,  upon  the  representation  that  he  had  no 
title  to  the  premises,  the  time  of  redemption  having  expired,  is 
thereby  estopped  from  afterwards  questioning  the  regularity  of 
the  f(n-(>cl()snre  and  sale,  as  against  such  purchaser.^ 

1675.  When  mistake  or  accident  on  the  part  of  any  one  in- 
terested in  the  property  is  relied  upon  as  a  ground  for  setting 
aside  a  sale,  it  must  be  shown  that  tiie  consequence  of  it  was  that 
the  property  sold  for  a  less  price  than  it  would  otherwise  have 
sold  for,  and  that  a  material  advance  may  be  expected  on  a  resale.* 
Particular  emphasis  is  placed  in  such  cases  upon  the  amount  of 
the  advance  that  can  be  obtained,  the  sale  having  been  fairly  con- 
ducted.^ When  the  principal  defendants  were  prevented  by  un- 
avoidable accident  from  reaching  the  place  of  sale  until  after  it 
had  been  concluded,  the  court  in  granting  a  resale  imposed  as 
terms,  the  deposit  of  the  amount  proposed  to  be  bid,  and  the  pay- 
ment of  the  costs  of  the  former  sale.^ 

A  mistake  in  the  proceedings,  such,  for  instance,  as  a  misdescrip- 
tion in  the  bill  of  the  land  mortgaged,  when  first  discovered  after 
decree  and  sale,  is  ground  for  setting  aside  the  decree  and  sale 
either  wholly  or  as  to  the  land  erroneously  described,  and  for  main- 
taining a  l)ill  of  review  to  correct  the  error. 

1676.  A  sale  will  not  be  set  aside  without  some  pressing 
reason.  If  the  mortgagor  is  competent  to  take  care  of  his  inter- 
ests, and  has  the  opportunity  of  attending  the  sale,  and  this  is 
fairly  conducted  the  court  will  not  interfere.'^  A  resale  will  not 
be  granted,  even  at  the  instance  of  infant  defendants,  on  account 
of  the  failure  of  their  guardian  to  attend  the  sale,  unless  it  appears 

1  Roberts  v.  Fleming,  .53  III.  196.  494.    For  cases  in  which  the  court  refused 

2  Depew  V.  Dewey,  46  How.  (N.  Y.)  Pr.  to  set  aside  a  sale  for  surprise,  see  Hunt 
441.  t^.  Ellison,  32  Ala.  173  ;  Hill  v.  Hoover,  5 

3  Curyea  v.  Berry,  84  III.  600.  Wis.  354. 

*  Stryker  v.  Storm,  1  Abb.  (N.  Y.)  Pr.  6  Adams  v.  Ha.skell,  10  Wis.  123. 

N.  S.  424.     See,  also,  Hey  v.  Schooley,  7  '  Haines  v.  Taylor,  3  How.  (N.  Y.)  Pr. 

Ohio,  373.  206. 

<>  Hudgins   v.  Lanier,  23  Gratt.   (Va.) 

654 


SETTING   ASIDE    OF   SALE.  [§  1677. 

that  their  share  of  the  proceeds,  after  indemnifying  the  purchaser 
at  the  first  sale,  will  be  materially  increased  by  a  sale  fairly  con- 
ducted in  all  respects.i  ^  resale  will  not  be  ordered  in  favor  of  a 
party  to  the  suit  who  has  been  negligent  or  inattentive,  and  made 
no  inquiry  in  relation  to  the  sale,  or  the  time  of  it.^  But  if  a 
mort^ao-or  is  prevented  without  negligence  on  his  part  from  tak- 
ing care  of  his  interests,  as  by  his  illness,  which  the  purchaser 
took  advantage  of  by  preventing  a  postponement  of  the  sale  and 
purchasing  for  one  third  of  the  real  value  ;  ^  or  being  absent  from 
the  state,  his  agent  in  charge  of  the  property  became  insane;* 
or  liaving  appealed  from  the  decree  and  supposing  the  sale  was 
stayed,  the  plaintiff  without  his  knowledge  proceeds  to  sell;^  or  a 
subsequent  incumbrancer  is  prevented  from  attending  the  sale  by 
accident,  and  the  premises  are  sold  for  an  inadequate  price ;  in  all 
these  cases  the  sale  will  be  set  aside.^ 

If  the  mortgagor  or  others  interested  in  the  property  have  been 
misled  by  the  mortgagee,  or  even  by  a  third  person,  in  reference 
to  the  foreclosure,  and  in  consequence  did  not  attend  the  sale,  and 
the  property  was  bought  by  the  mortgagee  for  a  price  greatly  less 
than  its  value,  a  resale  will  be  granted.'^  The  petitioner  may 
properly  be  required  to  guarantee  a  bid  of  a  certain  sum  at  the 
resale.^  A  resale  was  granted  where  a  party  to  the  suit  persuaded 
tlie  plaintiff  to  withdraw  his  consent  to  a  postponement  of  the 
sale,  knowing  that  the  mortgagor  was  sick  and  unable  to  attend, 
and  himself  became  the  purchaser  at  a  price  wholly  inadequate.^ 
A  sale  will  be  set  aside  whenever  the  debtor  has  been  misled  in 
any  way  by  the  mortgagee  or  the  purchaser,  and  thereby  pre- 
vented from  protecting  his  interests  at  the  sale,  and  the  property 
has  been  sold  greatly  below  its  value.^^ 

1677.  Few  bidders. —  It  is  no  good  cause  for  setting  aside  a 
judicial  sale,  that  only  a  few  bidders  were  present.     If  the  terms 

»  Stryker  w.  Storm,  1  Abb.  (N.  Y.)  Pr.         «  Howell    v.    Hester,   4    N.   J.    Ei].  (•'? 

N.  S.  424.     The  Kiinnlian  was  kept  from  Green)  2C6. 

the  wile  by  dcluy  of  the  railway  train  by         ^  Caini)l)ell  i;.  Gardner,   11  N.  J.  K'l  (3 

w  hitb  he  was  to  co  to  the  place  of  s!ilc.  Stock.)  423. 

*  Franci.ij;. Church,  1  Clark  (N.  Y.),47.').         "  Hazard  v.  HodtrcH,  17  N.  J.  Eq.  123. 

'  May  I'.  May,  11    Paifje  (N.  Y.),  201  ;  "  Hillingtou  v.  Forbes,  10  PaiKC  (N.  Y.), 

Billington  v.  Forbes,  10  Paiue  (N.  Y.),487.  487. 

♦  Thompson  v.  Mount,  1  Barb.  (N.  Y.)  »»  Collier  v.  \\h\],]>h',  l.'l  Wend.  (N.  Y.) 
Ch.  607.  220;    Hoppock  i;.  Coiiklin,   4  Sandf.   (N. 

6  Gould  V.  Libby,  24  How.  (N.  Y.)  I'r.      Y.)  Ch.  582. 


440;  S.  C.  18  Abb.  I'r.  32. 


655 


§§  1078,  ItJT'.t.]     roRCCLOSuRK  salks  undkr  di:cri:e  of  court. 

of  the  ileereo  luvve  beon  pursuod,  iiiul  the  property  sold  for  an  ade- 
quate price,  the  sale  u\u\t  stand.  But  a  sale  at  which  no  bidders 
were  present  except  the  auctioneer,  who  bid  in  the  property  for 
the  inortt^agce,  was  held  void.^  And  so  without  determining 
whether  the  price  obtained  at  a  sale  was  adequate  the  court  set  it 
aside  on  its  appearing  that  only  one  bidder  was  present,  and  that 
others  intending  to  be  present  and  to  bid  for  a  part  of  the  land 
were  deterred  fioni  doing  so  by  the  inclemency  of  the  weather.''^ 

1678.  When  a  foreclosiire  sale  is  invalid  by  reason  that  in 
making  it  the  requirements  of  statute  have  not  been  followed, 
the  purchaser  is  subrogated  to  the  rights  of  the  mortgagee.  When 
the  proper  parties  to  the  suit  are  omitted,  and  therefore  are  not 
bound  by  it,  or  there  is  any  other  irregularity  in  the  proceedings, 
the  sale  operates  as  a  voluntary  assignment  by  the  mortgagee 
of  his  interest  to  the  purchase.^  This  is  true  of  sales  under  pow- 
ers of  sale,*  as  well  as  those  under  decrees  of  court.  Such  pur- 
chaser also  acquires  the  mortgagee's  rights  to  recover  from  the 
mortgagor,  or  others  personally  liable  for  the  debt,  any  deficiency 
there  may  be  after  the  application  of  the  proceeds  of  the  prop- 
erty. In  such  cases  the  purchaser  may  use  his  mortgage  title  to 
protect  himself  in  the  possession  of  the  property  if  he  has  ob- 
tained this ;  '^  the  mortgagor  cannot  maintain  ejectment  against 
him  any  more  than  he  could  against  the  mortgagee  lawfully  in 
possession  after  condition  broken.^  The  purchaser's  title  under 
an  invalid  sale  is  good  against  all  except  the  mortgagor  and 
those  claiming  under  liim.'^ 

1679.  A  second  action  to  foreclose.  —  If  the  owner  of  the 
equity  has,  through  mistake,  not  been  made  a  party,  the  mort- 
gagee who  has  purchased  at  the  sale  may  maintain  a  second  ac- 
tion to  foreclose  the  equity  of  such  owner,  and  for  a  new  sale,  but 

1  Campbell  v.   Swan,  48  Barb.  (N.  Y.)  *  Grosvenor  v.  Day.  1   Clarke  (N.  Y.), 

109.  109;  Jackson   v.   Bowen,  7  Cow.  (N.  Y.) 

i'  Roberts  V.  Roberts,   13   Gratt.    (Va.)  13;    Gilbert  ij.  Cooley,  Walk.  (Mich.)  494, 

639.  See  chapter  xi. 

8  Robinson  v.  Ryan,  2.')  N.  Y.  320  ;  Gra-  ^  Honakcr    v.    Shough,    55    Mo.    472  ; 

pengether  v.  Fejervary,  9  Iowa,  163;  Ho-  Jones  v.   Mack,  53  Mo.  147  ;  Jackson  v. 

naker  v.  Shough,  55  Mo.  472 ;  Stoney  v.  Magruder,  51  Mo.  55. 

Shultz,  1   Hill    (S.    C),   405;    Cheek   v.  o  Gillctt  i;.  Eaton,  6  Wis.  30 ;  Tallraan 

Waldrum,  25  Ala.  152;  Stark   v.   Brown,  v.  Ely,  6  Wis.  244. 

12  Wis.  572;    Moore   v.   Cord,    14    Wis.  '  Casler  i;,  Shipman,  35  N.  Y.  533. 
213;  Childs  v.  Childs,  10  Ohio  St.  339; 
Frische  v.  Kramer,  16  Ohio,  125. 

556 


SETTING   ASIDE   OF   SALE.  [§  1680. 

he  cannot  recover  the  costs  of  the  previous  sale.^  The  foreclosure 
is  valid  as  against  those  who  were  made  parties  to  the  proceeding ;. 
and  if  the  error  was  in  not  making  a  junior  mortgagee  a  party, 
the  purchaser  acquires  an  estate  subject  only  to  the  lien  of  the 
junior  mortgagee  ;2  and  the  purchaser  may  maintain  proceedings 
to  foreclose  such  lien.^  By  the  act  of  purchase  he  submits  him- 
self to  the  jurisdiction  of  the  court  in  the  foreclosure  suit  as  to 
all  matters  connected  with  the  sale,  and  he  is  entitled  to  apply 
for  relief  such  as  the  facts  may  justify.  He  may,  by  a  supple- 
mental bill,  bring  in  all  persons  interested  in  the  premises  whose 
rights  are  not  already  foreclosed  ;  or  if  necessary  he  may  have  the 
sale  set  aside  and  obtain  a  resale  of  the  premises  ;  or  the  court 
may  give  such  other  relief  as  justice  demands.* 

1680.  Redemption  in  such  case  can  only  be  effected  by  sat- 
isfying the  prior  mortgage.  It  is  not  sufficient  to  pay  the  amount 
for  which  the  property  was  bid  off  at  the  sale,  where  this  amount 
is  less  than  the  mortgage  debt ;  and  this  rule  applies  as  well  in 
those  states  where  a  mortgage  is  regarded  as  a  mere  lien,  as  where 
the  common  law  doctrine  still  prevails  that  the  mortgage  is  the 
legal  estate.  Although  the  mortgage  be  regarded  only  as  a  lien 
for  enforcing  the  debt,  the  mortgagee  is  just  as  much  entitled  to 
payment,  and  liis  lien  is  not  merged  or  lost  in  the  judgment  of 
foreclosure  and  sale.^ 

If  before  the  sale  is  set  aside  the  purchaser  has  sold  the  prop- 
erty or  any  part  of  it  to  another,  who  has  taken  it  in  good  faith, 
for  value,  and  without  notice,  such  sale  will  not  be  affected  by  the 
action  of  the  court  and  the  resale  under  its  authority.  But  the 
court  will  inquire  into  the  circumstances  of  the  purchaser's  sale, 
and  if  any  collusion  be  found,  or  any  facts  from  which  notice 
should  be  inferred,  the  title  will  be  made  void  as  effectually  as  if 
it  had  been  retained  in  the  first  purchaser.^  Juilgments  against 
the  first  purchaser  after  the  delivery  of  the  deed  to  him,  being 
merely  liens  upon  his  interest,  cease  to  incumber  it  on  the  sale 
being  set  aside. ^ 

1  Sute  BHnk  of  Wisconsin  v.  Abbott,  KiiowIch  v.  Rablin,  '20  Iowa,  101  ;  Street 
20  Wis.  570  ;  and  sec  Stuckpole  «;.  Robbins,  «.  Bcal,  IG  Iowa,  68;  iMassic  v.  Wilson, 
47  Barb.  (N.  Y.)  212.  16    Iowa,   390;    I)onKla>s    v.   Binbop,  27 

2  Cur|Kiitifr  i'.  Brenham,  40  Cal.  221.  Iowa,  214. 

8  Goodenow  v.  Kwcr,  16  Cal.  461.  "  Colby  v.  Kowhy,  4  A  lib.  (N.  Y.)  Pr. 

♦  Boj,'fj8    V.    Hargravc,     16    Cal.    55'J ;  361. 

Goodenow  v.  Ewer,  supra.  '  Colby  v.  Rowley,   suj>i<i. 

fi  Johnson   v.   Harmon,    I'J   Iowa,  56;  557 


§  1G81.]   FORECLOSURE  SALES  UNDER  DECREE  OF  COURT. 

Iiitcrvoniiij^  piiri'luisers  aiul  mortgagees  m;iy  bo  protected  by 
proviiliiig  that  the  money  received  from  the  resale  of  the  prop- 
erty shall  be  held  and  not  distributed,  until  the  further  order  of 
the  court,  to  the  end  that  it  may  be  applied  so  far  as  necessary  to 
the  repayment  of  the  moneys  advanced  by  them  in  good  faith  on 
the  property.' 

One  who  has  purchased  of  the  vendee  at  the  foreclosure  sale, 
during  the  pendency  of  a  motion  to  set  the  sale  aside,  is  not  en- 
titled to  protection.'-^ 

1681.  When  a  sale  is  set  aside  by  order  of  court  the  title  of 
the  purchaser  is  vacated,'^  and  the  mortgage  is  restored  to  the 
same  })osition  it  occupied  before  the  proceedings  were  commenced, 
without  any  alliruiative  judgment  of  the  court.  The  mortgage 
cannot  be  deemed  to  be  paid,  or  the  lien  upon  the  premises  in 
any  way  impaired.*  The  purchaser  also  is  entitled  to  be  put  into 
the  same  situation  he  was  before  the  purchase.^  If  the  sale  be 
set  aside,  a  purchaser  who  has  entered  into  possession  is  held  to 
account  for  the  rents  and  profits  received  by  him  while  in  pos- 
session for  the  benefit  of  the  mortgagor  or  owner  of  the  equity.^ 
In  like  manner,  in  case  a  person  interested  in  the  property  was 
not  made  a  party  to  the  suit,  and  consequently  redeems  it  after 
the  sale,  the  purchaser  becomes  liable  to  account  for  the  rents 
and  profits  ;  and  he  is  under  the  same  liability  in  case  he  fore- 
closes the  outstanding  incumbrance  by  another  suit.  He  acquires 
by  the  sale  in  such  case  only  the  rights  of  a  mortgagee  in  posses- 
sion." 

1  Gould  V.  Libby,  18  Abb.  (N.  Y.)  Pr.  *  Stackpole  r.  Robbins,  47  Barb.  (N.  Y.) 
32 ;  24  How.  Pr.  440.  212  ;  affirmed  48  N.  Y.  665, 

2  Qiiaw  V.  Lameraux,  36  Wis.  626.  ^  Trotter  v.  White,  26  Miss.  88. 

3  Freeman  v.   Munns,  15  Abb.  (N.  Y.)  ^  Haun  v.  Reynolds,  15  Cal.  459. 

Pr.  468.  7  Walsh  v.  Rutgers  Fire  Ins.   Co.   13 


558 


Abb.  (N.  Y.)  Pr.  33. 


CHAPTER   XXXVII. 


APPLICATION   OF   PROCEEDS    OF   SALE. 


I.   Payment  of  the  mortgage  debt,  1682, 
1683. 
II.   Disposition   of    the   surplus,    1684- 
1698. 


III.  Priorities,  between  holders  of  several 

notes  secured,  1699-1707. 

IV.  Costs     of    subsequent    mortgagees, 

1708. 


1.  Payment  of  the  Mortgage  Debt. 

1682.  In  general.  —  The  pi'oceeds  of  the  sale  must  be  disposed 
of  as  directed  in  the  decree  of  court,  or  by  the  rules  and  prac- 
tice adopted  by  it.  In  general  it  may  be  said  that  the  officer 
making  the  sale  is  first  to  pay  out  of  the  proceeds  of  it  to  the 
plaintiff  or  his  attorney  the  amount  of  the  mortgage  debt  with 
interest,  and  the  costs  of  the  proceedings.  He  should  take  a  re- 
ceipt for  this  to  file  in  court  with  his  report  of  the  sale.  But  the 
court,  and  not  the  officer  appointed  to  make  the  sale,  must  de- 
termine all  questions  of  priority  of  claim  to  the  proceeds,  and 
must  see  that  the  moneys  reach  the  persons  entitled  to  them.^ 

1683.  If  a  mortgagee  in  order  to  preserve  his  security  has 
been  obliged  to  pay  taxes  or  other  charges  upon  the  mortgaged 
property,  he  may  add  the  amount  to  his  mortgage  upon  foreclos- 
ure of  it.^  A  prior  judgment  lien,^  or  rent  due  on  leasehold 
premises,*  or  a  prior  mortgage  that  is  due  and  payable,'^  if  it  be  a 
lien  upon  the  same  premises,  may  be  paid  by  the  junior  mortgagee, 
and  he  will  succeed  by  subrogation  to  the  rights  of  such  prior 
party  without  any  assigimient  or  transfer  of  the  prior  claim  to 
him.  In  such  cases  the  mortgagee,  on  a  bill  to  foreclose,  is  en- 
titled to  be  reimbursed  the  sum  he  has  paid,  and  to  have  a  decree 
of  indemnity  out  of  the  proceeds  of  the  sale.^ 


>  Eleventh  Ward  Sav.  Bank  v.  Hay,  55 
How.  (N.  Y.)  Pr.  444. 

!"  Sec  §  1137  ;  Dulc  v.  M'Evers,  2  Cow. 
(N.  Y.)  118;  Burr  v.  Veedcr,  3  Wend. 
(N.  Y.)  412  ;  Faure  i'.  Winans,  Hop.  (N. 
Y.)  Ch.  283. 


3  Silver  Lake  Bank  v.  North,  4  Johns. 
(N.  Y.)  Ch.  370. 

♦  Uobinson  v.  Uyan,  25  N.  V.  320. 

''  Burnet  v.  Denniston,  5  Johns.  (N.  Y.) 
Ch.  35. 

«  Ellsworth  i;.  Lockwood,  42  N.  Y.  89, 
96  ;   Dale  v.  M'Evcrn,  supra. 

559 


§§  1G84,  1685.]       Al'lM.IOATlON    OF    PROCKEDS   OF   SALE. 

Tlie  tuxi's  ami  assossnu'iits  diu'  on  the  property  sold,  if  unpaid, 
are  to  be  deducted  from  the  moneys  arising  from  the  sale,  unless 
it  was  made  subject  to  them  ;  but  a  direction  to  the  olHeer  in  the 
judgment  to  so  deduct  the  amount  of  theiu  does  not  authorize  the 
payment  of  them  by  liim.^ 

lUit  except  when  the  mortgagee  has  paid  prior  liens,  the  pro- 
ceeds of  lands  sold  under  a  mortgage  are  applicable  only  to  the 
mortgage  debt,  and  after  that  to  subsequent  liens  and  incum- 
brances, and  not  to  prior  and  paramount  liens.^ 

2.  Disposition  of  the  Surplus. 

1684.  Usually  the  surplus  money  is  paid  into  court  to 
await  its  order  of  distribution.^  Any  party  to  the  suit  having  a 
lien  upon  the  premises  subordinate  to  the  mortgage  upon  which 
the  sale  was  made  may  file  a  notice,  or  petition,  stating  the  nature 
and  extent  of  his  claim,  and  he  may,  according  to  the  general 
practice,  have  an  order  of  reference  to  ascertain  and  report  the 
amount  due  to  him,  and  to  others  having  liens  upon  the  property. 
Notice  of  this  is  given  to  all  claimants  or  others  having  liens,  and 
the  refex'ee  proceeds  to  ascertain  the  amounts  due  to  each.  The 
court  has  power  to  distribute  the  surplus  among  the  persons  enti- 
tled, although  the  mortgagor  has  died  pending  the  proceedings, 
and  his  estate  is  in  course  of  settlement  in  the  probate  or  surro- 
gate court.     His  heirs  and  creditors  must  apply  for  it  there.* 

1685.  The  court  may  appoint  a  master  or  referee  to  as- 
certain the  rights  of  claimants  to  the  surplus,  and  may  confirm  or 
set  aside  or  refer  back  his  report,  or  may,  while  the  moneys  re- 
main in  court,  vacate  the  report  and  order  further  proof.^  Ac- 
cording to  the  practice  of  some  courts  this  reference  is  allowed  as 
a  matter  of  course  ;  while  the  practice  of  others  is  to  allow  it  on 
application.^ 

All  parties  to  the  foreclosure  suit  should  have  notice  of  the  ap- 
plication for  the  surplus  money,  that  they  may  appear  and  assert 
their  rights,  and  the  report  should  show  on  its  face  that  they  were 
summoned  ;  and  an  order  of  payment  without  such  notice  will  be 

1  See  §  1597  ;  Opdyke  v.  Crawford,  19         *  Loucks  v.  Van  Allen,  11  Abb.  (N.  Y.) 
Kans.  604  ;  Cord  v.  Southwell,  15   Wis.     Pr.  N.  S.  427. 
211.  ''  Mut.  Life  Ins.  Co.  of  N.  Y.  v.  Salem, 

••*  Reybold  v.  Ilerdman,  2  Del.  Ch.  34.       3  Hun  (N.  Y.),  117. 

8  Clark  V.  Carnall,  18  Ark.  209.  «  Ward  v.  Montclair  R.  R.  Co.  26  N.  J. 

Eq.  260. 

560 


DISPOSITION    OF   THE   SURPLUS.         [§§  1686,  1687. 

set  aside.^  They  should  prove  the  nature  of  their  respective  liens 
and  the  amounts  due  them  ;  verifying  them  in  the  same  manner 
as  creditors  coming  in  under  a  decree  are  required  to  do  in  court. ^ 
The  costs  and  expenses  of  proceedings  for  the  distribution  of  the 
surplus  are  properly  chargeable  to  the  fund.^  A  creditor  who 
was  not  a  party  to  the  suit  generally  bears  the  expense  of  prov- 
ing his  own  claim  ;  and  the  court  may  refuse  a  creditor  his  costs 
under  other  circumstances.^ 

1686.  Upon  the  filing  of  the  report  of  the  referee  excep- 
tions may  be  taken  to  his  findings  of  facts,  and  his  conclusions 
upon  them,  and  upon  notice  to  the  parties  interested  a  hearing 
may  be  had  ;  but,  generally,  if  exceptions  are  not  taken  within  a 
specified  time  after  the  filing  of  the  report,  the  report  stands  con- 
firmed. An  order  of  distribution  follows,  directing  the  payment 
of  the  moneys  in  accordance  with  the  report  when  no  exception 
has  been  taken  to  this,  or  otherwise  in  accordance  with  the  deter- 
mination of  court  upon  the  report.  No  payment  can  properly  be 
made  without  such  final  order  of  court.^ 

1687.  In  general  no  claim  which  has  not  become  an  abso- 
lute lien  upon  the  property  can  be  considered,  however  equi- 
table it  may  be.*^  Mechanics'  liens,  though  not  established  by 
judgment,'  and  judgment  liens,  though  not  perfected  by  execution, 
are  transferred  from  the  land  to  the  surplus  money.  After  a  sale 
upon  execution  under  a  judgment  junior  to  the  mortgage,  the 
right  of  redemption  not  having  expired  at  the  time  of  the  fore- 
closure sale,  the  general  lien  of  the  judgment  is  turned  into  a 
specific  lien  upon  the  surplus  to  the  extent  of  the  purchaser's  bid 
and  interest  thereon.^  If  the  purchaser's  title  has  become  com- 
plete at  the  time  of  the  foreclosure  sale,  so  that  he  is  entitled  to 
a  deed,  he  is  entitled  to  the  whole  surplus.''     The  claimaiit,  what- 

1  Franklin  v.  Van  Cott,  11  Paige  (N.  333;  Mut.  Life  Ins.  Co.  of  N.  Y.  w.  Bowen, 
Y.),  129  ;  Smith  >:  Smith,  13  Mich.  2.58.  47  Barl,.  (N.  Y.)  618. 

2  Huibcrt  i;.  McKay,  8  Paige  (N.  Y.),  '  Liviu^ston  v.  Mildnim,  19  N.  Y.  440. 
651.  A  judgment  creditor,  who  was  properly 

'  Harvey  v.  Harvey,  6  Mad.  91  ;  Oppen-  made  a  party  to  the  suit,  docs  not  lose  his 

heimcr  v.  Walker,  3  Hun  (N,  Y.),  30.  right  to  share  in  the  surplus  hy  the  fact 

*  Abcll  V.  Screech,  10  Vcs.  355,  359.  that  his  judgment  became  dormant  pcnd- 

'  Ezp.   Allen,   2   N.  J.  Eq.  (1   Green)  ing    the   action.      Dempsey   v.    Hush,    18 

388;  Franklin   i;.  Van  Cott,  11  Paige  (N.  Ohio  St.  376.     See  §§  1934,  1936. 

Y.),  129.  *  Snyder  v.  Stafford,  II  Paige  (N.  Y.), 

0  Hn.stcd  V.  Dakin,  17  Abb.  (N.  Y.)  Pr.  71  ;  Clarkson  v.  Skidmore,  46  N.  Y.  297. 

137;  King  v.  West,  10  How.  (N.  Y.)  Pr.  ^  Sec  §  1934. 

VOL.  u.                           36  661 


§  16S8.]  Al'l'LICATION   OF   TROCKKDS   OF   SALE. 

evcv  his  lit'U  may  be,  is  not  entitled  to  any  })iirt  of  the  surplus 
money  iirising  from  the  sale  unless  he  was  a  party  to  the  suit ; 
for  otherwise  his  lien  is  not  affected  by  the  proceedings,  and  the 
land  is  not  discharged  from  it  by  the  sale  and  transferred  to  the 
money  ;^  unless,  however,  he  files  a  cross-bill,  or  voluntarily  ap- 
pears in  the  original  suit  and  establishes  his  claim.''^  When  the 
subsequent  lien-holders  have  been  made  parties  to  the  suit,  the 
decree  of  sale  may  properly  direct  the  payment  of  any  surplus, 
after  satisfying  the  mortgage,  among  the  lien  creditors,  according 
to  their  respective  rights  and  equities  ;  and  no  cross-bill  is  neces- 
sary for  the  purpose.^  It  is  not  necessary  that  the  decree  should 
find  the  precise  amount  due  such  lien-holder,  if  it  finds  that  there 
is  due  him  more  than  the  surplus.* 

The  proceeds  of  the  sale  after  satisfying  the  mortgage  debt 
may  be  said,  in  general,  to  stand  in  place  of  the  equity  of  re- 
demption to  those  who  had  title  or  right  in  that  or  lien  upon  it.^ 
If  tlie  mortgagor  or  his  vendee  be  the  only  ones  interested  in  it, 
the  surplus  belongs  wholly  to  him.  If  he  has  died  and  his  heirs 
are  made  parties  to  the  suit,  the  surplus  goes  to  them  ;  ^  although 
it  is  held  in  some  cases  that  the  personal  representatives  are  en- 
titled to  be  heard  on  the  petition  for  the  surplus,  on  the  ground 
that  it  is  personalty^ 

1688.  When  there  are  several  liens  upon  the  premises,  the 
surplus  money  must  be  applied  to  their  discharge  in  the  order  of 
their  priority.^  Generally  a  priority  of  right  may  be  presumed 
from  a  priority  of  record.  This  presumption  will  prevail  between 
the  holders  of  several  mortgages  upon  the  property ;  and  to  over- 
come this  presumption  the  burden  of  proof  is  upon  the  holder  of 
a  junior  mortgage  to  overcome  it  by  positive  evidence  of  prior 
right.^  Questions  of  priority  between  persons  having  claims  upon 
the  equity  of  redemj^tion  are  properly  settled  after  the  sale,  upon 
their  application  for  the  surplus  after  it  has  been  brought  into 
court,  rather  than  by  a  stay  of  proceedings  on  the  execution  of 

1  Winslow  V.  McCall,  32  Barb.  (N.  Y.)         ^  Smith  v.  Smith,  13  Mich.  258. 

241  ;  Root  V.   Wheeler,   12  Abb.  (N.  Y.)  8  Averill   v.   Loucks,    6  Barb.  (N.   Y.) 

Pr.  294.  470  ;  Lithauer  v.  Royle,  17  N.  J.  p:q.  40. 

2  Ellis  V.  Southwell,  29  111.  549.  »  Freeman  v.  Schroeder,  43  Barb.  (N. 
8  Crocker  r.  Lowenthal,  83  111.  579.  Y.)  618;  Peabody  v.  Roberts,  47  Barb. 
*  Walker  v.  Abt,  83  III.  226.  (N.  Y.)  91  ;  People  v.  Bergen,  53  N.  Y. 
6  Habersham  v.  Bond,  2  Ga.  Dec.  46.  404  ;  15  Abb.  Pr.  97. 

6  Shaw  t>.  HoadJey,  8  Blackf.  (Ind.)  165. 
562 


DISPOSITION   OF   THE   SURPLUS.        [§§  1689-1691. 

the  order  of  sale.^  Until  it  is  ascertained  that  there  will  be  a 
surplus,  they  are  not  permitted  to  litigate  their  claims  between 
themselves.^ 

1689.  So  if  there  be  simultaneous  mortgages  upon  the  same 
land,  they  are  in  effect  one  instrument,  and  upon  the  foreclosure 
of  one  of  them,  the  surplus  remaining  after  satisfying  that  is  ap- 
plicable to  the  payment  of  the  other,  although  only  part  of  it  is 
due.^  When  such  mortgages  are  held  by  different  persons,  the 
money  arising  from  the  sale  of  the  property  should  be  equitably 
divided  between  the  mortgagees  ;  *  the  fact  that  one  was  recorded 
before  the  other  does  not  matter,  if  both  mortgages  were  made 
under  an  agreement  made  by  the  mortgagor  at  the  same  time  with 
both  mortgagees.^ 

1690.  The  complainant  himself  may  present  and  establish 
a  claim  to  the  surplus  m.oneys  by  reason  of  another  debt  due 
him  from  the  mortgagor.  The  validity  and  amount  of  this  may 
be  ascertained  upon  a  reference,  in  the  same  manner  as  when  a 
claim  is  presented  by  any  other  person  ;  ^  and  there  is  no  obliga- 
tion upon  him  to  establish  his  claim  beforehand.'^ 

A  junior  mortgagee,  who  is  a  party  to  the  suit,  may  have  his 
rights  protected  by  an  appropriate  decree  as  to  the  application  of 
the  surplus,  if  there  be  any  after  satisfying  the  prior  mortgage.^ 
He  should,  however,  appear  and  ask  for  payment  out  of  the  sur- 
pliis.'^ 

1691.  The  equities  of  subsequent  incumbrancers  of  part  of 
the  premises  are  to  be  regarded.  —  In  general  it  may  be  said 
that  the  same  equities  which  govern  the  order  of  sale  of  property 
subject  to  other  liens,  or  accompanied  b}'  other  security  in  the 
hands  of  the  mortgagee,^"  ^.pply  also  to  the  distribution  of  the 
proceeds  of  sales  under  like  circumstances.  If  the  mortgage, 
under  the  circumstances  of  the  case,  is  a  charge  upon  all  the  land 
covered  by  the  mortgage,  and  only  a  part  of  it  is  foreclosed,  the 
proceeds  must  be  applied  to  the  discharge  of  a  proportional  part 

»  Schcnck  v.  Conovcr,  13  N.  J.  Eq.  (2  «  Bcekman  Fire  Ins.  Co.  v.  First  M.  E. 

BcM.)  31.  Church  in  N.   Y.  29  Barb.  (N.  Y.)  658  ; 

2  Union  Ins.  Co.  v.  Van  Rensselaer,  4  Field  v.  Hawxhurst,  9  How.  (N.  Y.)  Pr. 

Paige  (N.  Y.),  8.5.  75. 

'  Barber  r.  Cary,  11  Barb.  (N.  Y.)  549.  '  Field  v.  Hawxhurst,  supra. 

*  Eleventh  Ward  Sav.  Bank  v.  Hay,  55  *  Wnnl  v.  McNau^-liion,  43  Cal.  159. 
How.  (N.  Y.)  I'r.  444.  »  Kenton  v.  Spencer,  6  Ind.  321. 

*  Dacgett  V.  Rankin,  31  Cnl.  321.  '"  See  chapter  xxxvi. 

503 


§§  U)l)2,  161)3.]       APl'LICATION    OK    TKOCKKOS    OK    SALK. 

only  of  the  tlobt,  and  the  balance  to  the  persons  having  incum- 
brances upon  that  part  in  their  order. ^ 

1692.  A  prior  unrecorded  mortgage  is  preferred  to  a  sub- 
sequent judgment,  if  there  was  no  fraudulent  intent  on  the  part 
of  the  mortgagee  in  withholding  the  mortgage  from  record,  al- 
though it  w;is  given  to  secure  future  advances  or  liabilities.^  It 
is  also  held  that  a  mortgage  which  ig  equitable  only,  not  being 
formally  executed,  is  preferred  to  a  subsequent  judgment  if  given 
for  a  present  consideration. ^ 

1693.  Dower  and  homestead  in  surplus.  —  A  widow  who 
has  joined  her  husband  in  a  mortgage  of  land  of  which  he  was 
seised  is  in  equity  entitled  to  dower  in  surplus  moneys  arising 
from  a  foreclosure  sale  of  the  property,  after  satisfying  the  mort- 
gage debt.  To  the  extent  of  the  debt  secured  by  the  mortgage 
in  which  she  released  her  right  her  dower  interest  is  extinguished, 
and  she  is  dowable  only  of  the  surplus.*  If  her  husband  die 
after  the  judicial  sale  and  the  distribution  of  the  surplus,  of  course 
she  cannot  claim  any  interest  in  it  ;  but  if  he  die  after  the  sale  and 
while  the  siirplus,  or  even  a  part  of  it,  is  within  the  control  of  the 
court,  she  is  dowable  of  the  surplus  so  far  as  her  right  can  be 
equitably  paid  from  the  portion  remaining.^  If,  however,  some 
of  those  interested  in  the  surplus  have  received  their  portions 
before  her  claim  was  made,  they  cannot  be  called  upon  to  refund, 
nor  can  the  others  who  have  not  received  their  shares  be  called 
upon  to  suffer  loss  by  reason  of  the  payments  made.  She  is  in 
such  case  dowable  only  of  the  surplus  remaining  undistributed, 
and  not  of  the  whole  surplus.^ 

Even  after  the  surplus  had  been  paid  under  order  of  the  court 
to  an  assignee  of  the  mortgagor,  the  widow  who  had  neglected  to 

1  Mickle  V.  Rambo,  1  N.  J.  Eq.  (Sax.)  69  ;  17  Abb.  Pr.  256;  Titus  *•.  Neilson,  5 
501.  See,  aho,  Frost  v.  Peacock,  4  Edw.  Johns.  (N.  Y.  )Ch.  452;  Hawley  v.  Brad- 
(N.  y.)  678.  ford,  9  Paige  (N.  Y.),  200 ;  Bell  v.  Mayor  of 

2  See  §§  460,  461 ;  Thomas  v.  Kelsey,  N.  Y.  10  Paif,-e  (N.  Y.),  49 ;  Blydenburgh 
30  Barb.  (N.  Y.)  268.  v.  Northrop,  13  IIow.  (N.  Y.)  Pr.  289. 

'  See  §  470.  ^  Pickett  v.  Buckner,  45  Miss.  226.     In 

*  See  §  666  ;  Fox  v-  Pratt,  27  Ohio  St.  England,  prior  to  the  statute  of  3  &  4  Wm. 

512;    Culver  v-  Harper,  27  Ohio  St.  464;  4,  c.  105,  a  widow  was  not  dowable  of 

State  Bank  of  Ohio  v.  Hinton,  21    Ohio  an  equity  of  redemption,  and  of  course  she 

St.  509  ;    Taylor  v.  Fowler,  18  Ohio,  567 ;  was  not  of  the  surplus  after  a  foreclosure 

Rands  u.  Kendall,   15  Ohio,  671 ;   Hinch-  sale. 

man   v.    Stiles,    1    Stockt.    (N.   J.)   454;  6  State   Bank   of   Ohio   v.  Hinton,   21 

Matthews  v.   Duryee,   45  Barb.    (N.    Y.)  Ohio  St.  509. 
564 


DISPOSITION   OF   THE   SURPLUS.       [§§  1694,  1695. 

appear  in  the  foreclosure  suit,  and  was  not  notified  of  the  refer- 
ence respecting  the  distribution  of  the  surpkis,  was  allowed  to 
maintain  an  action  to  recover  her  dower  in  the  surplus  against 
such  assignee.^ 

When  land  is  sold  under  a  mortgage  containing  a  waiver  of 
homestead  exemption,  the  mortgagor  is  entitled  to  the  exemption 
out  of  the  surplus  as  against  subsequent  judgment  creditors.^  And 
so  when  a  right  of  homestead  has  been  released  in  a  mortgage, 
and  this  is  foreclosed  against  the  widow  and  heirs  of  the  mort- 
gagor, and  there  be  a  surplus,  this  is  payable  to  the  widow  to  the 
extent  of  the  homestead  exemption.^ 

1694.  Inchoate  right  of  dower.  —  In  some  cases  the  courts 
have  gone  so  far  as  to  protect  the  inchoate  interest  of  the  wife 
during  coverture  in  the  surplus  arising  from  a  mortgage  sale,  by- 
permitting  her,  as  against  judgment  creditors,  to  have  one  third 
of  the  residue  invested  for  her  benefit,  and  kept  invested  during 
the  joint  lives  of  herself  and  her  husband,  and  the  interest  paid 
to  her  during  her  own  life,  in  case  of  her  surviving  her  husband.* 
But  it  would  seem  doubtful  whether  a  court  of  equity,  in  the 
exercise  of  its  ordinary  jurisdiction,  has  the  power  to  enforce  such 
a  doctrine;"^  and  the  authority  is  against  allowing  the  wife  any 
such  riglit  against  her  husband's  creditors.*" 

1695.  The  svirplus  of  a  sale  made  after  the  death  of  the 
naortgagor  is  real  estate,  though  personal  if  the  sale  is  made  in 
his  lifetime.'^  A  devise  of  the  property  in  trust  to  pay  debts  does 
not  make  personal  assets  of  the  surplus.^  The  rule  in  Massachu- 
setts is,  however,  different.  The  legal  title  to  the  proceeds  of 
such  sale  is  held  to  be  in  the  executor  or  administrator,  by  force 
of  the  contract  of  mortgage,  though  when  he  has  collected  the 
money  he  holds  it  in  trust  for  the  heirs  or  devisees,  as  the  case 
may  be.^ 

1  Matthews  V.  Duryee,  45  Barb.  (N.  Y.)  ♦  §  1933  ;  Denton  v.  Nanny,  8  Barb.  (N. 
69.  Sutherland,  J.,  dissented,  saying:  "If  Y.)  618;  Vreeland  v.  Jnrohiis,  19  N.  J. 
the  plaintiff  ha.i  any  remedy,  it  appears  to  Kq.  231.  Sec,  however,  Hiddick  r.  Walsh, 
me  that  it  must  be  by  a  motion  or  pro-  l.")  Mo.  519. 

ceedini,'  to  vacate  or  modify  the  order  un-  ^  Scribncr  on  Dower,  p.  480,  §  30. 

der  which  the  money  was  paid  to  the  dc-  "  Dean  r.  Phillips,  17  Ind.  406. 

fendant."  ^   Writ,'ht  v.  Hose,  2    Sim.  &  Stu.  323  ; 

2  Quinn's  Appeal,  86  Pa.  St.  447  ;  Hill  Dunninj?  v.  Dcean  Nut.  Bunk,  61  N.  7. 
V.  Johnston,  29  Pa.  St.  362.  497,  and  cases  cited. 

»  McTaRKart  v.  Smith,  14  Bush  (Ky.),  *  §  1931 ;  Clay  r.  Willis,  1  B.  &  C.  364. 
—  ;  7  Reporter,  369.  »  Varnum  v.  Mcservc,  8  Allen  (Mas.s.), 

665 


§§  lt)0()-ir)i18.]   ArPLlCATION  OF  PROCKKDS  OF  SALK. 

1696.  A  lessee  for  years  of  the  mortgagor  is  not  entitled  to 
any  part  of  the  surplus  arisinj^  from  tlie  sale.  The  lease  is  extin- 
guished by  the  foreclosure,  and  all  title  of  the  lessee  is  cut  off. 
His  only  claim  would  be  one  against  the  mortgagor  for  a  breach 
of  the  covenant  for  quiet  enjoyment  if  the  lease  contained  such  a 
covenant.^ 

1697.  An  attachment  of  the  proceeds  of  the  foreclosure  sale 
is  subject  to  the  claims  of  mortgagees  or  other  incumbrancers  of 
record.-  If  the  mortgagor  after  the  maturity  of  the  mortgage  be 
summoned  as  garnishee  or  trustee  of  the  moi-tgagee,  the  latter 
cannot  defeat  the  lien  acquired  by  the  attaching  creditor  by  a  sub- 
sequent assignment  of  the  mortgage.  If  the  assignee  by  such 
assignment  foreclose  the  mortgage,  the  lien  of  the  attaching  cred- 
itor must  be  first  satisfied.^  It  is  said  in  this  case  that  such  cred- 
itor has  the  same  right  to  enforce  the  mortgage  that  the  mortgagee 
bad. 

1698.  Upon  a  sale  under  a  junior  mortgage,  a  surplus  be- 
longs to  the  mortgagor,  and  is  not  applied  to  the  satisfaction  of  a 
prior  mortgage ;  for  the  equity  of  redemption  which  is  sold  be- 
longs to  the  mortgagor,  and  the  presumption  of  law  is,  that  the 
purchaser  of  it  only  pays  for  it  its  worth  in  excess  of  the  prior 
mortgage  debt.*  But  sometimes  the  whole  estate  is  sold  under 
the  decree  of  court  or  by  consent  of  the  parties  interested,  in 
which  case  the  prior  parties  in  interest  may  be  made  parties  to 
the  proceedings  in  relation  to  the  distribution  ;  ^  and  a  prior 
mortgagee  who  has  been  in  possession  must  account  for  the  rents 
and  profits  received  by  him.^ 

There  may  also  be  other  circumstances  under  which  equity  will 
require  the  mortgagee,  out  of  the  money  received  by  him  on  the 
sale  applicable  to  the  payment  of  his  demand,  to  pay  a  prior  in- 

160.     It   may  be  observed   that  the  con-         ^  Burr    v.    Stenton,   32   Barb.  (N.  Y.) 

tract  in  Wright  v.  Rose,  2  Sim.  &  Stu.  323,  377  ;  S.  C.  43  N.  Y.  462. 

was  also  to  pay  the  mortgagor,  his  "  exec-        2  w^st  v.  Shryer,  29  Ind.  624. 

utors,  or  administrator,"  so  that  the  cases         *  Campbell  v.  Ncsbitt,  7  Neb.  300. 

are  in  conflict.    Dwight,  C,  in  Dunning  v.        *  Western  Ins.  Co.  v.  Eagle  Fire  Ins. 

Ocean  Nat.  Bank,  61  N.  Y.  497,  observes  Co.  1  Paige  (N.  Y.),  284  ;  Hanger  v.  The 

that  "  the  true  construction  of  these  words  State,  27  Ark.  667. 

undoubtedly  is,  that  the  promise  is  to  pay         ^  Porter  v.  Barclay,  18  Ohio  St.  546; 

the  executors  or  administrators  whenever  Dodge  u.  Silverthorn,  12  Wis.  044. 

it  might  have  been  collected  by  the  mort-        ^  Goring  v.  Shreve,  7  Dana  (Ky.),  64. 

gagor,  as  e.  g.  where  the  land  was  sold  in 

bis  lifetime."     See  chapter  xl,  div.  16. 

666 


PRIORITIES   BETWEEN   HOLDERS   OF  NOTES   SECURED.       [§§  1699,  1700. 

cumbrance ;  as,  for  instance,  where  be  bas  in  tbe  first  place  con- 
veyed the  land  to  tbe  mortgagor  witb  covenants  against  all  in- 
cumbrances and  taken  back  tbe  mortgage  for  tbe  purcbase  money, 
if  there  be  a  prior  mortgage  upon  tbe  property  tbe  proceeds  will 
be  applied  in  tbe  first  place  to  tbe  discbarge  of  that,  and  tbe 
amount  so  applied  deducted  from  bis  claim  under  tbe  mortgage.^ 

3.  Priorities  between  Holders  of  several  Notes  secured. 

1699.  General  rule.  —  It  is  tbe  settled  rule  in  many  of  tbe 
states  that  where  a  mortgage  bas  been  given  to  secure  several 
notes  falling  due  at  various  times,  and  tbe  notes  are  assigned  to 
different  holders,  the  one  first  maturing  is  to  be  first  paid  out  of 
the  mortgaged  property ;  the  mortgage  as  to  the  several  notes 
being  equivalent  to  so  many  successive  mortgages.^  Tbe  rule 
rests  upon  the  fact  that  tbe  bolder  of  the  note  first  maturing  may 
foreclose  upon  non-payment,  without  waiting  for  the  succeeding 
notes  to  mature.  The  power  to  do  so  implies  a  priority  of  lien 
in  tbe  notes  first  falling  due.^ 

1700.  Payment  of  notes  not  due.  —  The  surplus  cannot  be 
paid  to  the  holder  of  the  notes  not  due  :  courts  do  not  make  con- 
tracts for  parties,  nor  require  them  to  pay  their  debts  before  they 
have  agreed  to  pay  them.  The  prudent  method  in  taking  securi- 
ties of  this  kind  is  to  provide  against  all  these  contingencies  by 
the  express  provisions  of  tbe  deed.  A  court  of  equity  will,  how- 
ever, save  the  bolder  of  subsequent  notes  from  the  loss  of  bis 
security  through  the  payment  of  the  surplus  to  the  mortgagor,  by 

1  Van  Riper  v.  Williams,  2  N.  J.  Eq.  Ind.  52;    Stanley  v.  Beatty,  4  Ind.  134; 

(1   Green)  407.      See  §  1604;  also,  John-  Davis   i;.  Langdale,  41   Ind.  399;   Minor 

son  V.  Blydenburgh,  31  N.  Y.  427  ;  Slider  v.  Hill,  58  Ind.  176  ;  Richardson  i'.  McKim, 

V.  Bacon,  29  N.  J.  Eq.  442  ;    Woodruff  v.  20  Kans.  346  ;  Gwathmeys  v.  Ragland,  1 

Depuc,  14    N.   J.  P:q.    168;   Union    Nat  Rand.  ( Va.),  466 ;  McVay  v.  Bloodfrood,  9 

Bank  of  Rah  way  u.  I'inner,  25  N.J.  Va\.  Porter  (Ala.),  549;  Hinds  v.  Mowers,  11 

495;     Dayton    v.    Dusenbury,    lb.     110;  Iowa,  211;    Massie   v.  Sharpc.    13    Iowa, 

White  ».   Stretch,   22   N.   J.    Eq.   76.  542;   Hunt  r.  Stiles,  10  N.  II.  460.     Con- 

«  See  §§  606,  1459,  1478,  1677,  1939;  tra,  Paris  Exchange  Bank  v.   Beard,  49 

Koester  v.  Burke,  81  111.  436  ;  Gardner  v.  Tex.  358- 

Diederichs,  41  111.  158;  Sargent  y.  Howe,         »  Thompson    v.   Field,    38     Mo.    320; 

21  III.  148;    Funk  v.  McReynold,  .33  111.  Mitchell  v.  Ladew,  36  Mo.  .526;  Ellis  i;. 

481;     Vansant    v.   Allmon,  23    111.  .30  ;  Lnmme,  42  Mo.  153  ;  Wilson  p.  Hay  ward, 

Wood  V.  Trask,  7  Wis.  566;  State  Bank  6  Fla.  171  ;   and  see  Chew  v.  Buchanan, 

V.  Tweedy,   8  Blackf.  (Ind.)  447  ;  Hough  30  Md.  367,  where  the  question  was  raised 

r,  Osborne,  7  Ind.    140;  Grouse   v.    Hoi-  but  not  decided, 
man,  19  Ind.   30;   Murdock   i;.  Ford,  17 

567 


§  1701.]  APPLICATION    OF    PROCEEDS    OF    SALE. 

stuying  payiiKMit,  ami  proviiling  that  it  be  hold  to  meet  the  notes 
not  duo.  "  Indo{)eiideut  of  any  legal  and  binding  agreement, 
where  a  mortgage  is  executed  to  secure  two  or  more  notes  matur- 
ing at  different  times,  the  proceeds  arising  from  a  foreclosure  of 
the  mortgaged  premises  should  be  applied  to  the  payment  of  the 
notes  in  the  order  in  which  they  fall  due.  The  different  instal- 
ments in  a  mortgage  securing  such  notes  are  regarded  as  so  many 
successive  mortgages,  each  having  priority  according  to  the  time 
of  maturity  ;  and  where,  instead  of  one  mortgage  being  executed 
to  secure  several  notes  given  for  the  same  indebtedness,  a  separate 
mortgage  is  given  to  secure  each  note,  the  rights  of  the  parties 
are  identical."  ^ 

This  legal  effect  of  the  mortgage  cannot  be  varied  or  altered 
by  parol  testimony.  But  it  would  seem  that  when  the  mortgagee 
assigns  the  notes  to  different  persons,  he  may  by  agreement  with 
tiieni  fix  tlieir  rights  of  priority  in  payment.^ 

1701.  Priority  of  assignment.  —  It  is  held  also  that  an  assignee 
of  the  mortgage  with  part  of  the  debt  is  entitled  to  payment  in 
preference  to  the  mortgagee,  who  retains  one  of  the  notes ;  ^  and 
that  as  between  different  assignees,  priority  of  assignment  gives 
preference.  The  equity  arising  from  priority  of  assignment  is 
generally  regarded  as  paramount  to  the  equity  arising  from  the 
maturity  of  the  notes  as  against  the  assignor ;  but  as  between  dif- 
ferent assignees  the  equity  arising  from  maturity  is  paramount. 
Generally  it  may  be  said  the  effect  of  an  assignment  of  one  of  the 
mortgage  notes  is  to  carry  a  pro  rata  interest  in  the  security,  sub- 
ject to  the  paramount  claim  of  notes  previously  due  ;^  and  to  give 
no  right  based  upon  priority  of  assignment,  except  as  against  the 
assignor.^ 

The  fact  that  an  assignee  of  one  of  the  mortgage  noles  has  also 

1  Isctt  V.  Lucas,  17  Iowa,  503;  Bk.  of  man  v.  His  Creditors,  2  Rob.  (La.)  241  ; 
the  U.  S.  V.  Covert,  13  Ohio,  240;  State  Van  Rensselaer  z;.  Stafford,  1  Hop.  (N.  Y.) 
Bank  v.  Tweedy,  8  Blackf.  447  ;  Grapcn-  Ch.  569  ;  Clowes  v.  Dickenson,  5  Johns, 
gether  v.  Fejervary,  9  Iowa,  163;  Sang-  (N.  Y.)  Ch.  235;  Pattison  v.  Hull,  9  Cow. 
8ter  V.  Love,  11  Iowa,  580;  Reeder  v.  (N.  Y.)  747  ;  Mechanics' Bank  w.  Bank  of 
Carey,  13  Iowa,  274;  Massie  v.  Sharpe,  Niagara,  9  Wend.  (N.  Y.)  410;  Stevenson 
13  Iowa,  542  ;  Hinds  i-.  Mooers,  11  Iowa,  v.  Bhick,  Sax.  Ch.  (N.  .J.)  338. 

211;  Rankin  v.  Major,  9  Iowa,  297.  *  State   Bank    v.    Tweedy,    8    Blackf. 

2  Grattan  v.  Wit:t,'ins,  23  Cai.  16.  (Ind.)  447. 

3  §  822;  Bryant  v.  Damon,  G  Gray  ^>  Bank  of  the  U.  S.  v.  Covert,  13  Ohio, 
(Mass.),  504  ;  Warden  u.  Adams,  15  Mass.  240. 

233;  Culium  y.  Erwin,  4  Ala.  452;  Salz- 
568 


PRIORITIES   BETWEEN   HOLDERS   OF   NOTES   SECURED.       [§  1702. 

an  assignment  of  the  mortgage  gives  him  no  priority  of  right  over 
the  assignee  of  another  note  separate  from  the  mortgage;  but 
both  are  equally  entitled  to  the  benefit  of  the  security. ^ 

Where  a  holder  of  a  mortgage  assigns  a  part  of  it,  although  he 
warrants  only  the  existence  of  the  debt  at  the  time  of  the  trans- 
fer, it  would  be  contrary  to  good  faith  to  permit  him,  after  receiv- 
ing the  money  for  this  part  of  the  claim,  to  come  into  competition 
with  his  assignee,  if  the  property  prove  insufficient  to  pay  the 
claims  of  both.2  Unless  the  intention  be  plainly  declared  on  the 
face  of  the  assignment  that  the  assignee  is  to  share  pro  rata  in  the 
security  with  the  assignor,  the  equitable  construction  of  it  is  that 
it  must  in  the  first  place  be  applied  for  the  payment  of  the  part  of 
the  debt  which  was  assigned.^  A  proviso  in  the  assignment,  that 
it  shall  not  be  so  construed  as  to  prevent  the  mortgagee  from  re- 
ceiving or  disposing  of  the  residue  of  the  mortgage,  does  not  en- 
title him  to  participate  with  the  mortgagee  in  the  proceeds  of  it 
when  these  are  less  than  the  debt.^ 

In  some  courts,  however,  the  rule  has  been  adopted  that  the 
proceeds  of  the  mortgaged  property  should  be  divided,  joro  raf a, 
among  all  the  notes  secured  by  the  mortgage,  without  regard 
either  to  the  times  of  their  falling  due,  or  the  dates  of  their  as- 
signment, unless  the  assignment  show  a  contrary  intention.^ 

1702.  It  is  competent,  however,  for  the  parties  to  change 
this  general  rule  of  law  in  respect  to  priority,  by  an  express 
agreement  in  the  deed  that  the  note  last  falling  due  shall  have 
priority  of  lien  ;  ^  or  by  a  subsequent  agreement  made  between 

1  Waterman  y.  Hunt,  2  K.  I.  298.  In  Mississippi :   Parker    v.    Mercer,    6 

2  Salzman  j>.  His  Creditors,  2  Rob.  How.  320  ;  Cage  ?;.  Ilcr,  ."J  Sm.  &  M.  410 
(I^.)  241;  Barkdull  v.  Ilerwig,  30  La.  Henderson  i;.  Herrod,  10  Sni.  &  M.  631 
Ann.  618.  Jefferson  College  v.  Prentis.s,  29  Miss.  46 

8  Waterman    v.    Hunt,    2    R.  I.    298 ;  Bank  of   England   v.  Tarlcton,  23    Miss. 

Bryant  v.   Damon,  6    Gray  (Ma.ss.),    .564.  173  ;  Pugli  v.  Holt,  27  Miss.  461. 

See,  also,  Wright  v.  Parker,  2   Aik.  (Vt.)  Tennessee:  Ewing  (^  Arthur,  1  Ilumjih. 

212;  Richardson  i-.  McKim,  20  Kans.  346.  537;   Smith  u.  Cunningliani.  2  Tenii.  Ch. 

*  Merclianls'  Bank  i'.  Bank  of  Niagara,  .')69  ;  Andrews  v.  Ilobgood,  1  Lea  (Tenn.), 

9  Wend.  (N.  Y.)  410.  693. 

6  In  Maryland:  Chew  v.   Buchanan,  30  Michigan:  English  v.  Carvcy,  2.')  Mich. 

Md.  367,  Hartol,  C.  J.,  dissenting;  Dixon  178;    McCurdy  y.  Clark,  27   Mich.  445; 

V.  Ciayvill.-,  4 »  Md.  575.  Wilcox  v.  Allen,  36  Mich.  160.| 

In  Pennsylvania:  Donley  v.  Hays,    17  California:  Phclan  i;.  Olncy,  6  Cal.  478. 

8.    &    R.    400,    Gibson,  C.  J.,  dissenting  ;  o   Ellis  w.  Lamme,  42  Mo.  1.53. 
Betz  V.  Hcebner,  1  Penn.  280;  Hancock's 
Appeal,  34  Pa.  St.  155. 

669 


§§  1703-1706.]     Arri.icATioN  or  pkockf.ds  of  salk. 

the  mortgagee  uml  liis  assignee  uj)()U  the  assignment  of  j^art  of 
tlie  notes,'  reserving  eqnal  rights  to  the  liolders  of  the  notes  not 
assiguecl,^  or  otherwise  establishing  the  equality  or  inequality  of 
lien  of  the  several  notes. 

1703.  When  the  mortgage  provides  that  upon  any  default 
the  whole  mortgage  debt  shall  become  due  and  payable,  then 
there  can  be  no  preference  given  to  the  holder  of  the  note  on 
which  default  was  made  over  the  holder  of  the  note  not  then  due, 
because  by  such  default  the  whole  debt  became  due  at  the  same 
time.  A  pro  rata  distribution  should  then  be  made  between  the 
holders  of  different  parts  of  the  debt.^ 

1704.  If  the  mortgagor  has  a  right  of  set-off  against  the 
mortgage  notes,  which  are  in  the  hands  of  various  assignees,  and 
the  offset  is  made  against  one  note,  the  proceeds  of  the  sale  should 
be  so  distributed  as  to  make  the  final  distribution  conformable 
with  their  equitable  rights  under  the  law ;  as,  for  instance,  under 
the  rule  adopted  in  Kentucky,  to  make  all  the  assignees  contrib- 
ute ratably  to  the  set-off> 

1705.  When  the  mortgage  secures  debts  due  to  different 
persons  there  may  be  either  express  or  implied  priorities  between 
them.  An  agent,  with  the  assent  of  his  principal,  having  included 
in  a  mortgage  to  the  latter  a  debt  due  from  the  mortgagor  to  him- 
self, it  was  held,  in  the  absence  of  any  agreement  as  to  preference, 
that  the  debt  due  the  principal  should  first  be  paid  out  of  the  pro- 
ceeds of  a  foreclosure  sale.^ 

It  is  frequently  the  case  that  the  instrument  of  assignment  by 
its  terms  indicates  or  confers  a  preference  upon  the  assignee  as  to 
the  part  of  the  claim  assigned  to  him. 

1706.  Rights  of  sureties.  —  When  the  mortgage  secures  sev- 
eral debts,  for  some  of  which  there  are  sureties  who  are  not  parties 
to  the  mortgage,  the  mortgagee  becomes  a  trustee  for  the  sureties 
to  the  amount  of  the  funds  thus  provided  for  their  indemnity;  and 
he  must  see  that  the  proceeds  of  a  sale  of  the  property  are  applied 

1  Grattan  v.  Wiggin,  23  Cal.  16.  of  payment  of  the  several  notes  secured  is 

2  Howard  v.  Schmidt,  29  La.  Ann.  129.     not  impaired   by  such   a   provision   in  a 
»  See    §§  1179-1183 ;  Bank  of  the  U.     mortgage  or  deed  of  trust.     Hurck  v.  Er- 

S.  V.  Covert,  13   Ohio,   240  ;  Bushfield  v.  skine,  45  Mo.  484  ;  Mitchell  v.  Ladew,  36 

Meyer,  10  Ohio  St.  334.  Mo.  .520  ;  Thompson  v.  Field,  38  Mo.  320. 
In   Missouri,  however,  it   is   held   that        *  Campbell  v.  Johnston,  4  Dana  (Ky.), 

without  an  express  agreement  to  that  effect  177. 
the  priority  of  right  arising  from  the  time        ^  Philips  v.  Belden,  2  Edw.  (N.  Y.)  1. 

570 


COSTS  OF  SUBSEQUENT  MORTGAGEES.   [§§  1707,  1708. 

in  just  proportions  to  the  dischai'ge  of  the  debts  on  which  the 
sureties  are  bound.  Neither  the  mortgagor  nor  the  mortgagee 
will  be  allowed  to  defeat  the  rights  of  the  sureties,  who  have  a 
right  to  be  indemnified  out  of  the  property. 

If  in  such  case  some  of  the  debts  include  usurious  interest,  the 
mortgagor  alone  can  avail  himself  of  this  defence.  A  surety  on  a 
debt  paying  legal  interest  cannot  complain.  He  gets  all  the  secu- 
rity that  he  bargained  for  when  the  mortgage  was  executed.^ 

1707.  Sale  for  instalment.  —  As  already  noticed,  when  a  sale 
is  made  of  the  entire  jjremises,  for  the  non-payment  of  an  instal- 
ment of  the  mortgage,  and  there  is  a  surplus  after  paying  the 
amount  due  on  the  mortgage  at  the  time,  the  court  may  retain 
this,  and  apply  it  to  the  subsequent  instalments  as  they  become 
due  ;  ^  or,  as  some  courts  hold  or  statutes  provide,  may  immediately 
apply  the  surplus  to  the  payment  of  the  notes  not  yet  matured. 

4.   Costs  of  Subsequent  Mortgagees. 

1708.  When  proceeds  of  the  sale  under  a  decree  in  equity 
are  insufficient  to  pay  all  the  incumbrances  in  full,  each  mort- 
gagee is  entitled  to  be  paid  his  costs  as  well  as  his  debt,  according 
to  his  priority,  whether  the  bill  be  filed  by  the  first  or  any  subse- 
quent mortgagee.  The  rule  adopted  in  equity  under  a  creditor's 
bill,  when  a  fund  is  in  court  and  is  to  be  distributed  among  several 
claimants  j)ro  rata,  or  when  the  construction  of  a  will  is  in  doubt, 
and  the  rights  of  different  claimants  are  to  be  determined,  that 
the  costs  of  all  the  parties  shall  in  the  first  place  be  paid  out  of 
the  fund,  has  no  application  in  the  case  of  the  foreclosure  of  mort- 
gages, for  the  parties  have  priority  according  to  fixed  rules  of  law. 
Of  course  it  may  happen  that  a  subsequent  mortgagee,  after  hav- 
ing incurred  costs  of  suit  and  of  sale,  may  lose  these  as  well  as  his 
demand  also ;  as  where  the  proceeds  of  sale  are  only  sufficient  to 
pay  the  debt  and  costs  due  to  the  first  mortgagee ;  but  this  was 
the  risk  assumed  by  taking  the  subsequent  incumbrance.  This 
rule  seems  best  adapted  to  secure  the  rights  of  the  parties,  and  is 
well  establislied  both  in  our  own  courts  ^  and  in  those  of  Kugland.'^ 

1  Fielder  i^  Vanier,  45  Ala.  429.  Millard,  9  Tjiige  (N.  Y.),  f.20 ;  Boyd  v. 

2  McDowell  V.  Lloyd,  22  Iowa,  448.  Dodge,  10  Paigo  (N.  Y.),  42  ;  Lithauer  v. 
»  Mayer  i;.  Salisbury,   1   Barh.  (N.  Y.)     Royle,  17  N.  J.  Eq.  40. 

Ch.  546  ;  Smack  v.  Duncan,  4  Sandf.  (N.  *  Uppcrton  v.  Ilarrinon,  7  Sim.  444,  and 

Y.)  621  ;  Farrner!>'  Loan  &  Trust  Co.  v.     cases  there  cited. 

671 


§  1708.]  ArrucATiON  of  trockeds  of  sale. 

Where,  however,  ii  first  niortjjjagee  having  a  mortgage  containing 
a  power  of  sale  lost  his  deeil,  anil  was  obliged  to  resort  to  a  suit  in 
equity  to  obtain  a  sale,  subsequent  incumbrancers  were  allowed 
their  costs,  although  the  proceeds  of  sale  were  not  sufTicient  to  pay 
the  plaintilY  in  full,^  ap])arently  because  there  should  have  been 
no  occasion  to  come  into  equity.  And  where  a  mortgagee  with  a 
power  of  sale  filed  a  bill.  Baron  Alderson  said  that  the  subsequent 
incumbrancers,  being  brought  into  court  without  necessity,  were 
entitled  to  their  costs,  although  the  proceeds  of  sale  were  insuffi- 
cient to  pay  the  first  mortgage. ^ 

1  Wontncr  v.  Wrio:ht,  2  Sim.  543.  2  Cooke  v.  Browu,  4  Y.  &  C.  Exch.  227. 

572 


CHAPTER   XXXVIII. 

JUDGMENT  IN  AN  EQUITABLE  SUIT  FOR  A  DEFICIENCY.    1709-1721. 

1709.  Generally.  —  By  reference  to  the  statutory  provisions  of 
the  several  states  respecting  foreclosure,  it  will  be  observed  that 
in  most  of  the  states  in  which  foreclosure  is  effected  by  an  equi- 
table action,  authority  is  given  to  the  court  to  adjudge  the  pay- 
ment by  the  mortgagor,  or  any  other  person  liable  for  the  debt, 
of  any  deficiency  there  may  be  remaining  unsatisfied  after  a  sale 
of  the  mortgaged  land.  The  codes  of  several  states  contain  a  pro- 
vision, to  which  reference  only  is  made  in  the  statutes  relating 
specifically  to  the  subject  of  foreclosure,  as  follows  :  "  In  actions 
to  foreclose  mortgages,  the  court  shall  have  power  to  adjudge  and 
direct  payment  by  the  mortgagor  of  any  residue  of  the  mortgage 
debt  that  may  remain  unsatisfied  after  a  sale  of  the  mortgaged 
premises,  in  cases  in  which  the  mortgagor  shall  be  personally  lia- 
ble for  the  debt  secured  by  such  mortgage  ;  and  if  the  mortgage 
debt  be  secured  by  the  covenant  or  obligation  of  any  person 
other  than  the  mortgagor,  the  plaintiff  may  make  such  person  a 
party  to  the  action  ;  and  the  court  may  adjudge  payment  of  the 
residue  of  such  debt  remaining  unsatisfied,  after  a  sale  of  the 
mortgaged  premises,  against  such  other  person,  and  may  enforce 
such  judgment  as  in  other  cases."  This  provision  exists  in  the 
same  terms  in  the  states  of  New  York,  Wisconsin,  Nebraska, 
North  Carolina,  South  Carolina,  and  Florida.^ 

Provisions  differing  somewhat  from  the  foregoing  are  found  in 
other  states. 

The  Supreme  Court  of  this  United  States,  in  18G4,  in  order  to 
assimilate  the  practice  in  the  circuit  courts  to  the  gencnii  prac- 
tice in  the  state  courts,  adopted  a  rule  that  in  all  suits  in  equity 

'  New  York  :  Code,  §  167.  South  Carolina  :  §  lOO. 

Wisconain:  C.  14.5,  §§  1 1  &  12.  Florida:    Cudc  (Hush's    l)i>?.    1872),  § 

Nebraska  :  Code,  §§  847,  849.  1 1  7. 

North  Carolina:  Code,  §  12G. 

573 


§  1709.]  JUDGMKNT   IN    AN    KQUITABLE   SUIT 

for  the  foreclosure  of  mortgages  in  the  circuit  courts  or  in  any  of 
the  courts  of  the  territories,  a  decree  may  be  rendered  for  any  de- 
ficiency found  due  after  applying  the  proceeds  of  the  sale.^  This 
rule  applies  to  the  courts  of  the  District  of  Columbia.^ 

The  judgment  contemplated  is  one  for  the  balance  of  the  debt 
remaining  after  applying  towards  it  the  proceeds  of  the  sale. 
Tiie  first  step  is  to  ascertain  what  the  amount  of  this  balance  is. 
Therefore  a  judgment  for  a  deficiency  can  be  had  only  when  the 
sale  is  completed  ;  and  it  can  only  be  known  what  the  deficiency 
is  upon  the  coming  in  of  the  report  of  sale,  and  the  confirmation 
of  this.^  The  usual  practice  is  for  the  referee  to  state  the  amount 
of  the  deficiency  in  his  report  of  the  sale,  and  to  determine  who  of 
the  defendants  are  liable  to  pay  the  same  to  the  plaintiff.  This 
is  pi'ovided  for  in  the  original  judgment.^  There  can  generally 
be  no  contingent  judgment  for  such  deficiency  entered  before- 
hand ;  ^  at  any  rate  no  execution  can  be  issued  beforehand.^ 
When  the  person  liable  for  deficiency  does  not  appear  in  the 
cause,  it  is  the  practice,  after  calculation  of  the  amount,  to  award 
execution  for  the  deficiency  without  giving  him  notice  of  the  mo- 
tion." 

Persons  who  are  only  liable  for  the  debt  after  the  mortgaged 
property  has  been  applied  to  its  liquidation,  as,  for  instance,  mort- 
gagors who  have  sold  the  land  to  others  who  have  assumed  the 
mortgage  debt,  have  a  right  to  require  the  sale  of  the  whole 
equity  of  redemption  for  that  purpose  ;  and  therefore  they  may 
require  the  joining  of  all  persons  who  have  any  interest  in  the 
property,  so  that  all  equities  in  it  may  be  extinguished.  Al- 
though the  ownership  is  in  doubt  or  disputed,  the  court  will  order 
the  person  who  appears  to  have  an  interest  in  the  land  to  be 
brought  in.^ 

A  partner  may  properly  insist  that  a  mortgage  of  partnership 

1  1  Wall.  p.  V.  6  Cobb  V.  Thornton,  8  How.  (N.  Y.)  Pr. 

2  Freedman's   Savings  &  Trust  Co.  v.     66;  Bache  v.  Doscher,  41  (N.  Y.)  Superior 
Dodge,  7  Wash.  L.  R.  92.  Ct.  150  ;   but  see  Moore  v.  Shaw,  15  Hun 

2  Bank   of   Rochester  v.  Emerson,    10  (N.  Y.),  428. 

Paige  (N.  Y.),  359  ;  Baird  v.  McConkuy,  «  Howe  v.  Lemon,  .37  Mich.  164. 

20  Wis.  297  ;  Bache  v.  Do.schcr,  41    (N.  7  White  v.  Zust,  28  N.  J.  Eq.  107. 

Y.)    Superior   Ct.  150;    Tormey  i;.  Ger-  »  Kortright  v.  Smith,  3  Edw.  (N.  Y.), 

hart,  41  Wis.  54.  402. 

*  McCarthy  v.  Graham,  8  Paige  (N.  Y.) 
480. 

574 


FOR   A   DEFICIENCY.  [§  1710. 

property  to  secure  a  partnership  debt  shall  be  foreclosed  before  a 
personal  judgment  is  rendered  against  him  on  the  note.^ 

Upon  the  same  principle  it  has  been  held  that  a  defendant  who 
is  only  secondarily  liable  may  require  the  bringing  in  of  the  prin- 
cipal debtor,  if  within  the  jurisdiction  of  the  court,  for  the  pur- 
pose of  obtaining  against  him  a  judgment  for  deficiency."^ 

When  a  judgment  is  rendered  against  several  persons,  some  of 
whom  are  primarily  liable  and  others  only  secondarily,  the  judg- 
ment for  the  deficiency  should  provide  that  it  be  enforced  in  the 
first  place  against  the  principal  debtors,  and  then,  so  far  as  it  re- 
mains unsatisfied  only,  against  the  sureties  in  the  order  of  their 
liability,  which  should  also  be  fixed.^ 

The  liability  of  the  payee  of  a  note,  who  indorses  it  and  gives 
a  mortgage  conditioned  for  its  payment  according  to  its  tenor,  is 
regarded  as  primary,  and  not  merely  that  of  an  indorser.* 

1710.  Third  persons  liable  for  the  mortgage  debt  may  be 
joined  as  defendants.  The  codes  of  these  and  other  states  pro- 
vide that  the  plaintiff  may  unite  in  the  same  complaint  several 
causes  of  action  belonging  to  one  class  of  actions,  as,  for  instance, 
such  as  arise  out  of  the  same  transaction,  or  transactions  con- 
nected with  the  same  subject  of  action  ;  but  witii  the  qualification 
that  the  causes  of  action  so  united  must  all  affect  all  the  parties 
to  the  action.  In  tlie  states  above  named  an  exception  is  made 
in  actions  for  the  foreclosure  of  mortgages.  It  is  generally  con- 
sidered that  without  this  exception  and  a  special  provision  for  this 
case,  the  holder  of  a  mortgage  could  not  join  a  third  party  liable 
for  the  debt  with  the  mortgagor  in  an  action  of  foreclosure,  for 
the  purpose  of  obtaining  a  judgment  for  a  deficiency  against  him. 
An  action  against  the  mortgagor  alone  in  which  a  decree  is 
sought  for  the  sale  of  the  property,  and  as  well  a  judgment 
against  him  for  a  deficiency,  would  not  embrace  dilTerent  causes 
of  action,  but  different  remedies  for  the  same  cause  ;  but  when  a 
third  person  is  joined  for  the  purpose  of  obtaining  a  judgment 
against  him  for  a  deficiency,  it  is  considered,  in  the  absence  of 
such  express  provision,  that  there  is  a  misjoinder  of  causes  of  ac- 

1   Warren  v.  Hayzlett,  45  Iowa,  234.  Y.)  Ch.  2r)0 ;  Fnrnluim  t;.  Mnllory,  .0  Abb. 

«  Bi^elow  I).  Bush,  6  }'aij,'e  (N.  Y.),  34.1.  N.  S.  (N.  Y.)  Pr.  380. 

8  Luce  V.  Hinds,  Clarke  (N.  Y.),  453;  *  Robcrlson    v.    Canble,    57    Fnd.  420; 

Leonard  ».  Morris,  9  I'aigo  (N.  Y.),  90;  Zckind  v.  Nowkirk,  12  Ind.  544. 

and  Bee  Jones  v.  Stcinbcrgh,  1  Biirb.  (N.  « 

575 


^  1711. J  .TUDGMKNT    IN    AN    KQUITARLK   SUIT 

tion.  This  seems  to  be  the  ilislinctiou  estiiblislied  by  the  author- 
ities. When,  therefore,  the  code  of  a  state  does  not  contain  such 
express  provision,  a  judgment  for  a  deficiency  cannot  be  obtained 
against  any  persons  liable  for  the  debt  other  than  the  mortgagor 
himself.'  The  only  remedy  against  a  third  person  liable  for  the 
mortgage  debt  is  by  a  separate  action  after  the  deficiency  has 
been  ascertained.  Objection  to  a  complaint  which  improperly 
joins  these  dilTerent  causes  of  action  must  be  taken  by  answer  or 
demurrer,  or  it  will  be  deemed  to  be  waived  ;  ^  and  if  there  be  no 
such  objection,  a  judgment  for  the  deficiency  may  be  entered, 
though  not  expressly  authorized  by  any  statute.^ 

Mere  delay  on  the  part  of  the  mortgagee  to  foreclose,  when  he 
had  not  been  requested  to  do  so,  and  the  interest  has  been  j^aid, 
does  not  render  him  liable  for  a  loss  occasioned  by  a  fall  in  the 
market  value  of  the  property.* 

A  personal  judgment  for  a  deficiency  in  a  foreclosure  suit  may 
be  had  against  one  who  in  assigning  a  mortgage  has  made  a  guar- 
anty of  it.^ 

1711.  A  court  of  equity  cannot,  independent  of  any  provi- 
sion of  statute  giving  the  authority,  decree  the  payment  of  the 
balance  that  may  remain  of  the  mortgage  debt  after  applying  the 
proceeds  of  the  property  mortgaged,  unless  the  debt,  without  the 
mortgage,  was  sucli  that  a  court  of  chancery  would  have  jurisdic- 
tion of  it  and  could  enforce  it.^  A  foreclosure  in  equity,  though 
not  a  proceeding  in  rem,  is  in  the  nature  of  such  a  proceeding, 
and  is  not  intended  ordinarily  to  act  in  personam.  Without  the 
aid  of  statute  or  of  circumstances  giving  equitable  jurisdiction 
over  the  demand,  the  only  proper  remedy  for  the  deficiency  is  by 
action  at  law  upon  the  bond  or  note.''     If,  however,  no  note,  or 

1  Pomeroy's  Remedies,  §  459 ;  Doan  v.  ^  Fleming  i'.  Sitton,  1  Dev.  &  Bat.  Eq. 
Holly,  26  Mo.  186  ;  25  Mo.  357  ;  Faesi  v.  (N.  C.)  621 ;  Morgan  v.  Wilkins,  6  J.  J. 
Goetz,  15  Wis.  231  ;  Cary  u.  Wheeler,  14  Marsh.  (Ky.)  28;  McGee  v.  Davie,  4  lb. 
Wis.  281  ;  Jesup  v.  City  Bank,  14  Wis.  70;  Dunkley  v.  "Van  Buren,  3  Johns.  (N. 
331  ;  Stilwell  v.  Kellogg,  14  Wis.  461  ;  Y.)  Ch.  331;  Hunt  v.  Lewin,  4  Stew.  & 
Borden  v.  Gilbert,  13  Wis.  670.  See  Me-  Port.  (Ala.)  138  ;  Downing  v.  Palmateer, 
Carthy  v.  Garraghty,  10  Ohio  St.  438.  1  T.  B.  Mon.  (Ky.)  64  ;  Stark  v.  Mercer, 

2  Baird  v.  McConkey,  20  Wis.  297.  4  Miss.  (3  How.)  377  ;  Orchard  v.  Hughes, 
8  Gary  v.  Wheeler,  14  Wis.  281.  1  Wall.  73. 

*  Merchants'   Ins.    Co.  v.   Hinman,  34  "  In  South  Carolina  a  practice  grew  up 

Barb.  (N.  Y.)  410.  in  the  equity  courtH  of   rendering  a  de- 

^  §   1432;    Ofpeer   v.  Burchell    (N.  Y.  cree  for  the  deficiency,   though  this  was 

Superior  Ct.,  Jan.  1879),  19  Alb.  L.  J.  57.  "  confessedly  a  departure  from  the  proced- 

576 


FOR   A   DEFICIENCY.  [§  1712. 

bond,  or  other  legal  obligation  was  given,  or  if  this  has  been  lost, 
the  court  ma}'  enforce  the  demand  as  an  equitable  one  against  the 
mortgagor  by  a  personal  decree  for  the  balance  remaining  un- 
satisfied.^ When  the  mortgaged  premises  have  been  sold  to  one 
subject  to  the  mortgage,  which  he  agrees  to  pay,  his  obligation 
enures  in  equity  to  the  benefit  of  the  holder  of  the  mortgage,  wlio 
is  entitled  upon  foreclosure  to  a  decree  against  such  purchaser  for 
any  deficiency  there  may  be  after  applying  to  the  debt  the  pro- 
ceeds of  the  sale.  The  right  to  such  a  decree  is  upon  the  ground 
that  tlie  claim  is  purely  an  equitable  one.^ 

Generally  as  already  stated  there  are  statutes  giving  authority 
to  render  judgments  for  the  deficiency  not  only  against  the  mort- 
gagor, but  also  against  any  other  person  who  has  assumed  the  pay- 
ment of  the  debt,  or  who  has  become  a  guarantor  or  surety  of  it,^ 
or  has  made  any  collateral  undertaking  for  the  payment  of  it.'* 

Any  defence  which  prevails  against  a  genei'al  decree  of  fore- 
closure will  generally  be  equally  good  against  a  personal  decree 
for  the  debt ;  and  there  may  be  defences  to  the  latter  which  are 
not  good  against  the  former.^ 

1712.  One  who  has  bought  subject  to  the  debt  merely  is 
not  liable  for  it.  A  decree  for  the  deficiency  cannot  be  rendered 
against  a  subsequent  purchaser  or  mortgagee  unless  he  has  as- 
sumed the  payment  of  the  mortgage  debt.^  Whether  a  personal 
responsibility  is  assumed  is  in  all  cases  a  question  of  intention,  and 
unless  the  parties  have  declared  this  intention  by  words  aj)i)ropri- 
ate  and  sufficient  to  express  it,  there  can  be  no  such  liability.  If 
the  deed  simply  says  the  land  is  subject  to  a  certain  mortgage, 
then  the  cases  all  agree  that  the  purchaser  is  not  personally  bound 
to  pay  it.^  The  addition  of  the  further  words,  "  which  has  been 
••stimated  as  a  part  of  the  consideration  money  of  this  conveyance, 

ure  of  the  En{,'lish  Chancery."   Wightman  »  Jarman  v.  Wiswall,  24  N.  J.  Eq.  267  ; 

'••  Gray,  10  Rich.  Eq.  (S.  C.)  518.  Bristol  v.  Morgan,  3  Edw.  (N.  Y.)  Ch. 

'  Crutchfield  v.  Coke,  6  J.  J.  Marsh.  142;   Jones  v.   Stienbergh,    1    Harh.   Ch. 

(Ky.)  89;  VVaddell  v.  Hewitt,  2  Ircd.  Eq.  2.'J0 ;  Sauer  v.  Steinhaticr,  14  Wis.  70. 

(N.  C.)  2.52.  *  Curtis  v.  Tyler,  9  Taige  (N.  Y.).  4.32. 

2  Halsey  u.  Reed,  9  Paige  (N.  Y.),  44r. ;  *  Ah  where   the   mortgage   is  void    for 

Klapworth   v.  Dressier,   13    ,\.  J.   E(|.  02;  usury.     Mann  u.  Cooper,  1   Hurb.  (N.  Y.) 

Hoy  V.  Bramhall,  19  N.  .1.  Ec].  503.     By  Ch.  IS.'i, 

a  subsequent  statute  (Nix.  Dig.   p.  110)  "  §§  736-738;  Mount  i.  I'oits,  23  N.J. 

of  1806,  the  power  of  the  court  in  such  Eq.  188. 

cases  is  recognized    and    extended.     See,  '  Hull  v.  Alexander,  20  Iowa,  509. 
also,  Stiger  i;.  Mahone,  24  N.  J.  Efj.  426. 

VOL.  u.                 37  677 


§§  IT  Us  171  I.  J       .lUDGMKNT    IN    AN    EQUITABLK   SUIT 

iuul   lias   beiMi   dodiu-tiMl    tluTofrom,"    doos   not   impart  anything 
n\ore.^ 

A  decM'oo  wliich  liiuls  the  sum  due  on  the  mortgage,  and  requires 
a  subsequent  jiureliaser  to  pay  the  same  by  a  day  named,  and  if 
he  does  iu)t,  that  tiie  mortgaged  premises  be  sold,  is  not  a  personal 
decree  against  the  purchaser,  but  an  alternative  one,  giving  him 
the  o}Uion  to  pay  the  money  or  sufTer  the  property  to  be  sold.'^ 

1713.  If  there  are  words  in  the  deed  importing  that  the 
grantee  is  to  pay  the  mortgage  to  which  the  land  is  subject,  he 
is  deemed  to  have  entered  into  an  express  undertaking  to  do  so 
by  the  mere  acceptance  of  the  deed  without  having  signed  it.  No 
precise  or  formal  words  are  necessary.  If  they  show  an  intention 
that  the  grantee  shall  pay  the  debt,  he  thereby  becomes  person- 
ally liable  for  it.^  If  the  agreement  to  pay  the  debt  is  not  con- 
tained in  the  deed  to  the  purchaser,  it  must  be  evidenced  by  some 
writing  and  supported  by  a  good  consideration. 

When  such  grantee  is  not  made  a  party  to  the  foreclosure  suit, 
and  a  judgment  for  a  deficiency  is  recovered  against  the  grantor, 
he  is  entitled  to  recover  the  same,  with  costs  of  foreclosure  of  the 
grantee,  in  a  suit  at  law.  A  statute  such  as  exists  in  New  York,* 
prohibiting  proceedings  at  law  without  leave  of  court  for  the  re- 
covery of  the  debt  after  a  decree  has  been  entered  in  a  suit  to 
foreclose  the  mortgage,  has  no  application  to  such  a  suit  by  the 
grantor.     It  applies  only  to  a  suit  by  the  holder  of  the  mortgage.^ 

If  a  mortgagee,  upon  assigning  the  mortgage,  has  guaranteed 
the  payment  of  it,  the  amount  of  his  liability,  in  case  he  has  re- 
ceived less  than  the  face  of  the  mortgage,  may  be  limited  to  the 
amount  he  received,  with  interest.^ 

1714.  Though  the  conveyance  was  merely  for  security.  — 
It  does  not  matter,  as  regards  the  personal  liability  of  one  who 
has  assumed  to  pay  the  mortgage,  that  he  took  the  deed  of  the 
equity  of  redemption  merely  as  security  for  an  indebtedness  ow- 

1  Belmont  i-.  Coman,  22  N.  Y.  438.  Ch.  478  ;  Lawrence  v.  Fox,  20  N.  Y.  268 ; 

2  Gochenour    v.   Mowry,   33   111.   331 ;  Miller  i;.  Thompson,  34  Mich.  10. 
Glover  V.  Benjamin,  73  111.  42.  *  2  11.  S.  191,  §  15.5. 

3  §§  741,  748  et  seq. ;  Ricard  v.  San-  ^  Campbell  y.  Smith,  71  N.  Y.  26  ;  Com- 
derson,  41  N.  Y.  179  ;  Belmont  v.  Coman,  stock  v.  Drohan,  71  N.  Y.  9  ;  S.  C.  8  Hun 
22  N.  Y.  438;  Trotter  v.  Hughes,  12  N.  (N.  Y.),  373. 

Y.  74  ;  Vail  v.  Foster,  4  N.  Y.  312  ;  Curtis  «  Goldsmith  v.  Brown,  35  Barb.  (N.  Y.) 

V.  Tyler,  9  Paige  (N.  Y.),  432  ;  Ilalsey  v.  484  ;  Rapelye  v.  Anderson,  4  Hill  (N.  Y.), 

Reed,  lb.  446  ;  Marsh  v.  Pike,  10  lb.  595 ;  472. 
Blyer   v.  Monholland,  2    Sandf.   (N.  Y.) 

578 


FOR   A   DEFICIENCY.  [§  1715. 

ing  to  him  by  the  firm  of  which  the  mortgagor  was  a  member;  ^ 
though  under  other  circumstances,  when  the  conveyance  was  in- 
tended to  operate  merely  as  a  mortgage,  the  reservation  by  the 
grantor  of  the  right  to  pay  the  debt,  and  thereby  discharge  the 
obligation  to  pay  the  prior  mortgage,  has  been  held  to  be  incon- 
sistent with  the  idea  that  the  assumption  was  for  the  benefit  of 
the  prior  mortgagee.^ 

1715.  If  there  be  no  bond,  note,  or  other  separate  agree- 
ment in  writing  or  covenant  in  the  mortgage  for  the  payment  of 
the  mortgage  debt,^  or  the  mortgage  secures  the  notes  of  third 
persons,^  there  can  ordinarily  be  no  personal  judgment  for  any 
deficiency.  But  if  the  defendant  appears  to  the  action  and  con- 
sents to  such  a  judgment,  it  is  valid.^  There  can  be  no  personal 
judgment  in  case  tlie  mortgagee  has  agreed  with  the  mortgagor 
to  give  up  the  notes,  and  to  look  to  the  property  only ;  ^  or  has 
released  the  mortgagor  from  all  personal  liability  ; "  or  in  case  the 
debt  is  barred  by  the  statute  of  limitations.^ 

When,  however,  the  debt  exists  independently  of  the  mortgage, 
though  not  evidenced  by  any  writing,  the  deficiency  not  satisfied 
by  a  sale  of  the  land  may  be  recovered  by  action.^ 

But  where  there  was  an  oral  agreement  between  tliree  persons 
to  purcliase  certain  real  estate  on  jqint  account  as  a  specuhition, 
and  to  divide  the  profits  in  proportion  to  the  amounts  contributed, 
and  the  title  was  taken  in  the  name  of  one  of  the  partners  who 
personally  gave  liis  bond  and  mortgage  to  secure  a  portion  of  the 
purchase  money,  the  holder  of  the  mortgage  was  not  allowed  to 
recover  judgment  for  a  deficiency  arising  from  a  foreclosure  sale 
against  the  other  partners  whose  names  did  not  appear  upon  the 
papers. ^*^ 

In  several  states  it  is  provided  by  statute  that  no  mortgage 
shall  be  construed  as  implying  a  covenant  for  the  payment  of  the 
sum  intended  to  be  secured  ;  and  when  there  is  no  express  cove- 
nant f(jr  such  payment  contained  in  the  mortgage,  and  no  bond  or 

1  RicRrd  V.  Sanderson,  41   N.  Y.  179;         «  Moore  f.  Reynolds,  1  Cal..'J51. 
and  see  Campbell   i;.   Smith,   8   Ilun    (N.         ''  Hrown  i;.  Winter,  14  Cal.  31. 

Y.),  6;  71  N.  Y.  20.  «   VViswell  v.  l}iixter,20  \Vi.<.  080;  Mich. 

2  §  767.  Ins.  Co.  «;.  Brown,  11  Midi.  265. 

»  §§  72,  678,   750;    Hunt   v.  Lewin,  4         «  Suvnge  v.  Stone,  1  Utah  T.  .3.5. 

Stew.  &  P.  (Ala.)  138.  w  Willijims  v.  Gillies,   (N.   Y.  Ct.  Ap- 

*  Meiz  V.  Todd,  36  Mich.  473.  peaU,  Nov.  1878),  8  N.  Y.  Weekly  Dig.  12. 

*  Fletcher  y.  Holmes,  25  Iiid.  458. 

570 


§§  ITIO,   1T17.J       JUDGMKNT    IN    AN    KQUITAHLK    SUIT 

othor  si'parato  instrmiuMit  to  socuro  the  piiyment  lias  beon  given, 
the  ivmi'dies  of  the  mortgagee  are  ooiilined  to  the  hmtls  ineu- 
tioned  in  the  mortgage.' 

1716.  A  judgment  for  a  deficiency  cannot  be  rendered 
against  a  non-resident  who  has  not  appeared  nor  been  served 
with  process  within  the  state.  The  court  in  such  case  has  no 
jurisdiction  of  tlie  person,  and  the  remedy  is  confined  to  a  fore- 
closure and  sale  of  the  land.^  When  so  provided  by  statute,  a 
judgment  obtained  against  a  non-resident  upon  service  by  publica- 
tion might  be  enforced  against  his  property  in  the  state.  Such  a 
judgment  would  generally  impose  upon  him  no  personal  liability. 

1717.  Upon  the  decease  of  the  mortgagor,  if  the  administra- 
tor or  executor  be  a  party  to  the  bill,  then  no  judgment  can  be 
entered  against  him  for  any  deficiency  remaining  after  application 
of  the  proceeds  of  sale.  A  claim  for  the  deficiency  must  be  pre- 
sented under  the  proceedings  for  the  administration  of  the  estate.^ 
The  suit  can  be  prosecuted  against  the  executor  or  administrator 
only  for  the  purpose  of  reaching  the  property  and  subjecting  it  to 
sale.  "  If  the  court  could  render  a  judgment  against  the  property 
of  the  deceased  in  the  hands  of  the  administrator,  the  mortgagee 
first  foreclosing  would  in  effect  get  priority  of  payment  out  of  the 
estate,  not  only  as  against  general  creditors,  but  as  against  all 
mortgagees  later  in  foreclosing,  though  in  the  same  class  of  cred- 
itors."* 

No  judgment  can  be  had  against  a  purchaser  from  the  mort- 
gagor unless  he  has  assumed  the  payment  of  the  debt.^  Nor  can 
such  judgment  be  had  against  "the  heir  or  devisee  of  a  deceased 
mortffii<ror.^ 

1  California:  Code,  1872,  §  2928.  Butler,  21  Cal.  24;  Leonard  v.  Morris,  9 
Indiana:  Revision,  187G,  vol.  2,  p.  261.  Paige  (N.  Y.),  90  ;  Null  v.  Jones,  5  Neb. 
Michigan:  2  Compiled  Laws  of   1871,     500. 

p.  \:u-2.  *  Per  Mr.  Justice  Perkins,  in  Newkirk 

Oregon  :  Gen.  Laws,  p.  516.  v.  Burson,  21  Ind.  129  ;  and  see  Rhodes  v. 

Wisconsin:  Rev.  Stat.  1871,  p.  1143.  Evans,  1  Clarke  (N.  Y.),  168.     This  is  at 

Wyoming  Territory:    Compiled  Laws,  any  rate  the  rule  before  the  expiration  of 

1870,  c.  ;5,  §  6.  the  period  limited  for  the  settlement  of  the 

Dakota    Territory:    Civil    Code,    1871,  estates  of  deceased  persons.     Hathaway  u. 

§  1624.  Lewis,  2  Disney  (Ohio),  260. 

2  Schwinper  v.  Hickok,  .W  N.  Y.  280 ;  ^  Burkham  v.  Beaver,  17  Ind.  367; 
Lawrence  v.  Fellows,  Walk.  (Mich.)  468.  Carleton  v.  Byinj,'ton,  24  Iowa,  172. 

8  Pechaud  w.  Rinquet,  21  Cal.  76;  Cow-         «  Leonard  v.  Morris,  9  Paige  (N.  Y.), 
ell  V.  Bnckelew,  14  Cal.  640;    Fallon  v.     90. 
580 


FOR  A  DEFICIENCY.         [§§  1718,  1719. 

1718.  A  personal  judgment  against  the  wife  is  erroneous 
when  the  mortgage  was  executed  by  her  with  the  husband  upon 
his  own  land  to  secure  his  own  debt.  She  is  properly  made  a 
party  to  the  suit  for  the  purpose  of  concluding  her  rights  of  dower, 
but  is  not  a  party  in  any  other  sense.^  Before  a  judgment  can  be 
rendered  against  her  on  her  bond  made  jointly  with  her  husband, 
it  must  appear  affirmatively  from  the  allegations  and  evidence 
that  the  debt  was  her  own  proper  debt  or  related  to  her  separate 
estate.2  Neither  can  such  a  judgment  be  entered  against  a  widow 
of  the  mortgagor,  who  with  his  heirs  is  made  a  party  to  the  suit 
after  his  death  ;  ^  nor  against  the  heirs.*  But  if  a  married  woman 
is  herself  one  of  the  mortgage  debtors,  and  is  possessed  of  sepa- 
rate property  other  than  that  mortgaged,  a  personal  judgment  may 
properly  be  rendered  against  her  for  the  deficiency.^  But  no  ob- 
ligation on  her  part  can  be  implied  from  an  agreement  that  cer- 
tain lands  conveyed  by  her  husband  and  herself  as  security  for  his 
debt  shall  be  reconveyed  to  her  alone  on  repayment  of  the  debt, 
although  the  agreement  purports  to  make  her  liable  for  the  ad- 
vances ;  especially  where  by  statute  no  covenant  for  the  payment 
of  the  debt  secured  can  be  implied  in  a  mortgage.^ 

1719.  No  judgment  can  be  rendered  for  such  parts  of  the 
debt  as  are  not  due.  The  court  can  only  direct  at  what  time 
and  upon  what  default  any  subsequent  judgment  and  execution 
may  issue."  But  if  the  mortgage  provides  that  upon  default  in 
payment  of  any  instalment  of  the  mortgage  debt,  or  of  interest, 
the  whole  debt  shall  immediately  become  due  and  payable,  a  per- 
sonal judgment  may  be  entered  for  the  whole  debt  upon  a  default 
in  payment  of  the  first  instalment  of  principal  or  interest.^ 

1  O'Brian  v.  Fry,  82  111.  274;  Wright  Allen  v.  Pnrkcr,  11  Ind.  504,  in  which  it 
V.  LanRJey,  .36  111.  381  ;  Key  v.  Addicks,  8  was  said  that  judgment  might  he  rendered 
Ind.  521  ;  Kirke  i'.  Fort  Wayne  Gas  Light  for  the  amount  due,  and  to  become  due,  is 
Co.  13  Ind.  26  ;  Patton  v.  Stewart,  19  Ind.  questioned  in  Thompson  v.  Davis,  29  Ind. 
233;  Emmett  v.  Yandes,  60  Ind.  548;  264;  and  the  judgment  spoken  of  was  not 
Neitzcl  V.  Hunter,  19  Kans.  221.  a  personal  judgment,  but  one  authorizing 

2  §  111 ;  Manhattan  Life  Ins.  Co.  v.  a  sale.  "  It  is  only  so  far  as  the  sale  of 
Glover,  14  Hun  (N.  Y.),  153.  the    mortgaged    premises    is     concerned, 

'  Brown  r.  Orr,  29  Cal.  120.  when  the  premises  are  indivisiblo,  that  the 

♦  Alexander  v.  Frary,  9  Ind.  481.  debt  can    be  collected   before   it  becomes 

*  Merchants'  Nat.  IJk.  v.  liaymond,  27     due."     Skclton  v.  Ward,  .sh/i)«. 

Wis.  567.  »  Darrow  v.  Scullin,  19  Kans.  57.     But 

«  Howe  V.  Lemon,  37  Mich.  164.  it  is  not  an  error  of  which  the  mortgagor 

■  Danforth  v.  Coleman,   23  Wis.  528  ;     can  complain  that  juilgment  is  rendered 

Skelton  v.  Ward,  51  Ind.  46.     The  case  of     only  upon  the  first  instalment. 

581 


§§  IT:]!).  17"21.]      JIIDGMKNT   IN    AN    EQUITABLK   SUIT 

1720.  When  it  becomes  a  lien.  —  I'lio  doeroo  for  a  doficicMicy 
of  proceeds  does  luit  ]\:i\o  tlie  force  and  o(Tect  of  a  judgment  at 
law  so  as  to  beeonie  a  lirn  until  tlio  deficiency  is  ascertained.^ 
This  defieioncy  can  only  be  ascertained  from  the  sale,  and  the 
judgment  becomes  a  lien  ujion  the  other  property  of  the  debtor 
onl}'  from  the  time  it  is  docketed.^ 

B}'  the  practice  generally  adopted  no  further  action  by  the 
court  is  necessary  after  the  amount  of  the  deficiency  is  reported, 
but  the  clerk  may  issue  an  execution  for  it  without  further  order.^ 
In  some  states  the  mortgagee  may  take  a  decree  fixing  the  amount 
due  and  directing  a  sale,  and  then,  after  the  sale,  apply  for  a  fur- 
ther decree  fixing  the  deficiency  and  granting  an  execution  for 
this  ;  or  he  may  take  a  judgment  at  once  for  the  whole  amount 
due  from  which  the  officer  making  the  sale  deducts  the  proceeds  of 
it,  and  in  that  way  ascertains  the  deficiency ;  *  and  no  further  pro- 
ceedings are  necessary  on  the  part  of  the  court  to  ascertain  the 
deficiency. 

Inasmuch  as  the  personal  decree  and  execution  cannot  precede 
a  sale  of  the  premises,  where  equity  required  that  the  remedy 
against  the  mortgagor  upon  his  bond  should  be  first  exhausted, 
proceedings  in  the  foreclosure  suit  were  suspended,  to  give  time 
for  the  plaintiff's  bringing  a  suit  at  law  upon  the  bond.^ 

1721.  The  personal  remedy  may  be  enforced  without  fore- 
closure against  one  who  has  made  himself  personally  liable  for 
the  payment  of  a  mortgage  debt,  and  even  without  joining  the 
mortgagor  as  defendant.^  A  judgment  rendered  in  a  foreclosure 
suit  against  the  mortgagor  is  competent  evidence  of  the  amount 
of  the  mortgage  debt,  and  of  the  amount  of  the  deficiency  re- 
maining after  a  sale  of  the  property  in  a  separate  suit  by  the 
mortgagor  against  one  who  assumed  the  debt  and  was  not  a  party 
to  the  foreclosure  suit.'^  But  under  the  codes  of  some  states,  as, 
for  instance,  those  of   New  York  and   Michigan,  when  the  mort- 

1  Mutual  Life  Ins.  Co    v.  Southard,  25     see  Creighton   v.  Hershfield,  2   Mon.    T. 
N.  J.  Eq.  337.    See  Fletcher  v.  Holmes,  25     386. 

Ind.  458.  6  Vanderkemp  v.  Shelton,  1  Clarke  (N. 

2  Cormcrais   v.   Geneila,   22    Cal.  116;     Y.),  321. 

Rollins  V.  Forbes,  10  Cal.  299;  Kowe  v.  «  Burr  v.  Beers,  24   N.  Y.  178;   Law- 

TaWe,  &c.  Co.  lb.  441.  rence  v.  Fox,  20  N.  Y.  268. 

8  Baird  v.  McConkey,  20  Wis.  297.    See  ^  Comstock  v.  Drohan,  8  Hun  (N.  Y.), 

Burdick  v.  Burdick.  20  Wis.  348.  373 ;  71  N.  Y.  9. 

*  Rowland  v.  Leiby,  14  Cal.  156;    and 

582 


FOR   A   DEFICIENCY.  [§  1721. 

gagee  has  voluntarily  refrained  from  asking  in  his  foreclosure  suit 
for  a  decree  for  any  deficiency,  or  has  voluntarily  omitted  to  join 
one  who  had  become  liable  for  the  debt,  some  satisfactory  reason 
should  be  given  for  permitting  him  to  institute  a  separate  action 
at  law  for  its  recovery.^  Such  leave  will  not  be  granted  when  it 
appears  that  the  deficiency  has  been  created  in  part  or  wholly  by 
interference  of  the  holder  of  the  mortgage  to  prevent  others  fi-om 
bidding  at  the  foreclosure  sale.^ 

1  In  New  York:  2   R.  S.   191,  §   155;     341.    MicMgan:  C.  L.  §  5149;    lunes   c. 
Comstock  V.  Drohan,  71   N.  Y.  9;  Equi-     Stewart,  36  Mich.  285. 
table  Life  Ins.  Soc.  v.  Stevens,  63  N.  Y.         2  Innes  i-  Stewart,  supra. 

583 


CHAPTER   XXXIX. 


STATUTORY    PROVISIONS    RELATING   TO   TOWER    OF    SALE    MORT- 
GAGES  AND   TRUST   DEEDS. 


I.  IntrDiUictory,   1722. 


II.  Statutory    jirovisioiis    in    the   several 
states,  1723-1763. 


1.   Introductory. 

YJ2i2,.  In  England  a  mortgage  is  now  considered  incomplete 
without  a  power  of  sale ;  and  in  fact  since  Lord  Cranwortli's  Act^ 
in  1860,  all  mortgages  are  in  effect  made  power  of  sale  mortgages  ; 
for  this  act  provides  that  where  money  is  secured  by  a  deed  of 
land  or  of  any  interest  in  it,  the  person  to  whom  the  money  for 
tlie  time  being  is  payable  shall,  at  any  time  after  the  expiration 
of  one  year  from  the  time  when  the  principal  shall  have  become 
payable,  or  after  any  interest  shall  have  been  in  arrear  for  six 
months,  or  after  any  omission  to  pay  any  premium  on  any  insur- 
ance which  ought  to  be  paid  by  the  person  entitled  to  the  prop- 
erty, shall  have  to  the  same  extent  as  if  conferred  by  the  mort- 
gagor: 1st.  A  power  to  sell  the. whole  or  any  part  of  the  property 
by  public  auction  or  .private  contract,  subject  to  any  reasonable 
conditions  he- may  think  fit  to  make.  2d.  A  power  to  insure  from 
loss  by  fire,  and  to  add  the  premiums  to  the  debt  secured  at  the 


1  23  &  24  Vict.  c.  145.  This  act  it  is 
said,  has  been  of  practical  use  only  in 
some  few  cases,  where  the  mortgajje  deed 
contained  no  power  of  sale  ;  for  a  special 
power  of  sale  is  almost  universally  given 
by  the  deed,  even  since  this  act,  for  a 
more  expeditious  mode  of  obtaining  the 
money  is  demanded.  So  far  as  tlie  act 
was  intended  to  shorten  the  mortgage 
deed,  it  has  wholly  failed.  Greenwad's 
Prac.  of  Conveyancing,  55.  It  has  been 
suggested  that  this  failure  of  the  statute 
is  due  in  part  to  the  intense  caution  and 
deep-rooted  conservatism  which  is  always 

684 


found  among  conveyancers  ;  althougli  the 
fact,  that  deeds  are  charged  for  accord- 
ing to  their  length,  is  supposed  by  an  Eng- 
lish writer  to  have  had  something  to  do 
with  the  failure,  not  only  of  this  provision, 
but  of  others  made  with  the  like  intent  to 
shorten  papers  used  in  conveyancing. 

In  a  subsequent  statute,  25  &  26  Vict. 
c.  53,  a  power  of  sale  intended  to  operate 
under  the  foregoing  statute  is  given  in  a 
form  of  mortgage  annexed  to  the  act  as 
follows  :  "  C.  D.  shall  have  power  to  sell  on 
default  of  payment  of  the  principal  or  in- 
terest, or  any  part  thereof  respectively." 


I 


STATUTORY   PROVISIONS   RELATING,    ETC.  [§  1722. 

same  rate  of  interest.  3d.  A  power  to  appoint  or  obtain  the  ap- 
pointment of  a  receiver  of  the  rents  and  profits.^  No  such  sale 
can  be  made  until  after  six  months'  notice  in  writing  given  to  the 
person  or  one  of  the  persons  entitled  to  the  property,  or  affixed  on 
some  conspicuous  part  of  the  property.  The  purchaser's  title  is 
not  liable  to  be  impeached  on  the  ground  that  no  case  had  arisen 
to  authorize  the  exercise  of  such  power,  or  that  no  notice  had  been 
given  ;  but  anv  person  damnified  by  an  unauthorized  sale  has  his 
remedy  in  damages  against  the  person  selling.  The  person  sell- 
ing makes  a  deed  to  the  purchaser  and  gives  a  receipt  for  the 
money,  which  fully  discharges  him.  The  purchase  money  is  ap- 
plied to  the  payment  of  the  expenses  of  sale,  the  interest  and 
principal  of  the  debt,  and  the  surplus  to  the  person  entitled  to  the 
property  sold.^  The  act  also  contains  provisions  for  the  appoint- 
ment when  necessary  of  a  receiver,  whose  duties  it  declares.  It 
makes  every  mortgage  executed  after  the  passing  of  the  act  a 
power  of  sale  mortgage,  unless  the  application  of  the  act  is  ex- 
pressly negatived  by  the  deed  itself. 

The  primary  object  of  this  statute  was  to  provide  a  power  of 
sale  for  all  mortgages.  A  secondary  object  was  to  shorten  the 
mortgage  deed  used  in  that  country,  but  in  this  respect  the  statute 
has  wholly  failed.  It  has  been  of  use  in  affording  a  power  of  sale 
in  some  few  cases  in  which  the  mortgage  deed  contained  no  power 
of  sale.  The  chief  cause  of  the  failure  of  the  statute  has  been  that 
it  was  not  liberal  enough  in  its  provisions.  A  more  expeditious 
mode  of  obtaining  the  money  out  of  the  mortgaged  property  is 
almf).st  universally  demanded,  so  that  a  special  power  of  sale  is 
almost  always  inserted  in  the  deed.  The  general  object  of  this 
statute  cannot  be  too  highly  commended  ;  and  it  is  to  be  hoped 
that  statutes  in  similar  form,  but  more  liberally  framed,  may  be 
enacted  in  this  country.  A  power  provided  by  statute,  while  it 
would  prevent  the  cumbering  of  the  records  with  the  elaborate 
provisions  in  common  use  for  enforcing  the  security,  would  make 
securities  more  certain,  and  therefore  more  valuable  to  botli  par- 

1  Where  it  is  desired  that  the  mort-  express  powers  usually  inscrte<l  in  mort- 
gagee shall  not  have  all  or  any  of  the  gages  are  intended  to  protect  the  pur- 
powers  conferred  hy  the  act,  it  may  be  chaser  in  all  cases  of  unauthorized  and 
prevented  by  express  declaration.    lb.  §  32.  irregular  sales,    if  he   buys    iu  good  faith 

2  It  is  to  be  okserved  that  this  statutory  and  without  knowledge  of  the  inipro|)er 
power  does  not  protect  the  purchaser's  or  irregular  exercise  of  the  power.  Fisher 
title  except  in  these  two  instances.     The  on  Mort.  p.  511. 

585 


§§  17"2;>-17iir).]       STAITTOHY    I'ROVISIONS    RELATING    TO 

ties  ;  for  tlif  cdiisI ruction  of  such  ;i  power  would  soon  be  sottltHl, 
and  settknl  for  the  whole  eouinuinity.  Some  protection  might  be 
iifTorded  the  mortgaj^or  at  the  same  time  ;  but  too  much  h'gishi- 
tion  in  this  respect  would  be  much  worse  than  none  at  all,  for  the 
efficacy  and  simplicity  of  this  remedy  might  be  easily  destroyed. 
Even  now  in  a  few  states  the  exercise  of  the  power  is  so  restricted 
and  hedged  about  with  provisions  in  regard  to  notice,  tiie  conduct 
of  the  sale,  and  redemption  afterwards,  that  this  remedy  is  only  a 
little  better,  perhaps,  than  the  cumbersome  and  expensive  process 
by  equitable  suit. 

The  only  states  in  which  a  statutory  power  of  sale  has  been 
provided  are  Virginia  and  West  Virginia.  The  statute  is  the  same 
in  both  states,  the  latter  state  having  adopted  the  statute  of  the 
former.  This  statute  applies  to  trust  deeds  only,  as  this  form  of 
security  has  in  those  states  wholly  superseded  the  use  of  mort- 
gages. It  provides  in  a  few  simple  terms  for  the  sale  of  the  prop- 
erty by  the  trustee,  whenever,  after  default,  the  creditor  may  re- 
quire it ;  and  for  the  application  of  the  proceeds  to  the  payment 
of  the  debt,  the  compensation  of  the  trustee,  and  the  rendering  of 
the  surplus  to  the  debtoi-.  In  its  brevity  and  simplicity  this 
statute  is  to  be  commended. 

2.    Statutory  Provisions  in  the  several  States. 

1723.  Alabama.  —  The  usual  form  of  mortgage  now  used  in 
Alabama  contains  a  power  of  sale  authorizing  foreclosure  without 
the  intervention  of  a  court,  by  publication  of  a  notice.  Deeds  of 
trust  are  also  in  use.  The  power  to  sell  is  part  of  the  security, 
and  may  be  executed  by  any  person  who,  by  assignment  or  oth- 
erwise, becomes  entitled  to  the  money  secured.^  Property  sold 
under  a  power  is  subject  to  redemption  for  two  years,  in  the 
same  way  as  when  sold  under  decree  of  foreclosure  in  chancery .^ 

1724.  Arkansas.  —  Trust  deeds  are  in  use,  and  must  be  ac- 
knowledged and  recorded  the  same  as  mortgages. 

1725.  California.  —  Neither  power  of  sale  mortgages  nor  trust 
deeds  are  in  very  general  use  in  this  state,  although  it  is  provided 
by  statute  that  a  power  of  sale  may  be  conferred  upon  a  mort- 

^  Code,  1876,  §  2198.  the  mortgagee,  "his  heirs  and  assigns." 

An   administrator   may  sell  under  the     Lewis  v.  Wells,  50  Ala.  198. 
power,  though  by  its  terms  it  runs  only  to         ^^Code,  supra,  §§  2877-2889. 

686 


POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.       [§§  1726-1728. 

gagee  or  other  person.^  A  power  of  sale  contained  in  the  mort- 
gage is  merely  a  cumulative  remedy,  and  does  not  in  any  way 
affect  the  right  to  foreclose  in  chancery.^  The  mortgagee  has  his 
election  to  foreclose  in  that  way,  or  under  the  power  of  sale 
vested  in  him  by  the  mortgage.  The  right  to  sell  rests  upon  the 
contract  of  the  mortgagor,  and  a  sale  fairly  made  passes  a  good 
title  to  the  purchaser.  It  is  provided  that  the  power  to  sell  is  to 
be  deemed  a  part  of  the  security,  and  that  it  shall  vest  in  and  may 
be  executed  by  any  pei'son  who,  b}'  assignment  or  otherwise,  be- 
comes entitled  to  the  money  so  secured  to  be  paid  whenever  the 
assignment  is  duly  acknowledged  and  recorded. ^ 

1726.  Colorado.  —  Power  of  sale  mortgages  and  trust  deeds 
are  both  in  use. 

1727.  Connecticut.  —  Power  of  sale  mortgages  and  trust  deeds 
are  not  in  general  use. 

1728.  Dakota  Territory.* — A  power  of  sale  may  be  conferred 
by  a  mortgage  upon  the  mortgagee  or  any  other  person,  to  be 
exercised  after  a  breach  of  the  obligation  for  which  the  mortgage 
is  a  security.  The  power  is  a  part  of  the  security,  and  passes  by 
an  assignment.^  Such  power  of  sale  is  a  trust  and  can  be  exe- 
cuted only  in  the  manner  prescribed.^  Before  a  foreclosure  can 
be  made  by  advertisement,  a  default  must  have  occurred,  and  it 
is  further  requisite  that  there  be  no  suit  pending  for  the  recovery 
of  the  debt ;  that  any  execution  that  may  have  been  rendered 
shall  have  been  returned  unsatisfied  ;  and  that  the  mortgage  and 
any  assignment  of  it  sliall  have  been  recorded.  Each  instalment 
of  the  mortgage  is  deemed  to  be  a  separate  mortgage  so  far  as  to 
entitle  the  holder  of  it  to  a  foreclosure. 

Notice  of  the  foreclosure  sale  must  be  given  by  publishing  the 
same  for  six  successive  weeks,  at  least  once  in  each  week,  in  a 
newspaper  of  the  county  where  the  premises  or  some  part  of 
them  are  situated,  if  there  be  one  ;  if  not,  then  in  the  nearest 
paper  published  in  the  territory.  The  notice  must  specify  the 
names  of  the  mortgagor  and  mortgagee,  and  the  assignee,  if  any  ; 
the   date   of   the    mortgage,    and    where    recorded ;    the    amount 

»  Civil  Code,  §  2932.  8  civil  Code,  §  858  ;  1  Codes  &  Stats. 

3  FoRarty  v.  Sawyer,  17  Cal.  589  ;  Cor-  1876,  §§  5858,  5859. 
merais  v.  Genella,  22  Cal.  116.     Whctlier         *  Kev.  Codes,  1877,  pj).  f.l.3-GlG. 
a   right  of  redemption   exists   after  such         ^  Civil  Code,  snpni,  §  313. 
sale  WHS  n  question  raised  but  not  decided         ^  Civil  Code,  §  1730. 
in  the  case  of  Cormerais  v.  Genella,  sujira. 


§  17*28.]  STATUTORY    PROVISIONS    RKF-ATIXG    TO 

oluiiuod  to  1)1'  duo  iit  llu'  ilati'  of  llio  notice  ;  ;i  iloscription  of  the 
proiuisos  substantially  as  in  the  mortgage ;  and  the  time  and  place 
of  sale. 

The  sale  must  be  at  public  vendue,  between  the  hour  of  nine 
o'clock  in  the  forenoon  and  the  setting  of  the  sun  on  that  day,  in 
the  county  in  ■which  the  premises  to  be  sold  or  some  part  of  them 
are  situated,  and  must  be  made  by  the  person  appointed  for  that 
purpose  in  the  mortgage,  or  by  the  sheriff  or  deputy  sheriff  of 
the  county,  to  the  highest  bidder. 

The  sale  may  be  postponed  by  inserting  a  notice  of  the  post- 
ponement, as  soon  as  practicable,  in  the  newspaper  in  which  the 
original  advertisement  was  published,  and  continuing  this  until 
the  time  of  the  postponed  sale,  at  the  expense  of  the  party  re- 
questing the  postponement.  If  the  premises  consist  of  distinct 
farms  or  lots,  they  must  be  sold  separately,  and  no  more  can  be 
sold  than  is  sufficient  to  satisfy  the  amount  due  at  the  date  of  the 
notice  of  sale,  with  interest  and  costs.  The  mortgagee  may 
fairly  and  in  good  faith  purchase  at  the  sale.  The  officer  making 
the  sale  gives  to  the  purchaser  a  certificate  stating  when  he  will 
be  entitled  to  a  deed  if  the  premises  are  not  redeemed.  Re- 
demption may  be  made  within  one  year  after  the  sale  by  payment 
to  the  purchaser,  if  within  the  county,  or  otherwise  to  the  officer 
who  made  the  sale,  of  the  amount  for  which  the  premises  sold, 
together  Avitli  interest  at  the  rate  of  ten  per  cent,  per  annum  from 
the  time  of  sale.  But  the  mortgagor  is  not  entitled  to  retain 
possession  of  the  premises  after  the  sale.  If  not  redeemed,  the 
officer  executes  a  deed  of  the  premises  to  the  purchaser.  Any 
surplus  there  may  be  must  be  paid  over  by  the  officer  to  the 
mortgagor,  his  representatives  or  assigns. 

The  evidence  of  the  sale  may  be  perpetuated  by  an  affidavit 
of  the  publication  of  the  notice  made  by  the  printer;  an  affida- 
vit of  the  fact  of  sale,  of  the  time  and  place  of  the  sale,  of  the 
sum  bid,  and  the  name  of  the  purchaser,  made  by  the  person 
who  acted  as  auctioneer.  Such  affidavits  are  recorded  in  the  regis- 
try of  deeds  for  the  county,  and  are  presumptive  evidence  of  the 
facts  set  forth. 

The  party  foreclosing  a  mortgage  by  advertisement  is  entitled 
to  his  costs  and  disbursements  out  of  the  proceeds  of  sale,  in  addi- 
tion to  any  attorney's  fee  agreed  upon  in  the  mortgage. 
588 


POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.       [§§  1729-1733. 

1729.  Delaware.  —  Power  of  sale  mortgages  and  trust  deeds 
are  not  in  general  use. 

1730.  District  of  Columbia.  —  Deeds  of  trust  with  power  of 
sale  are  in  use  to  the  exclusion,  almost,  of  mortgages. 

1731.  Florida.  —  Neither  of  these  instruments  seem  to  be  in 
general  use. 

1732.  Georgia.  —  Mortgages  with  powers  of  sale  are  valid.^ 

1733.  Illinois.-  —  It  is  usual  for  mortgages  to  contain  a  power 
of  sale  ;  and  trust  deeds  are  generally  preferred  to  mortgages. 
No  sale  can  be  made  by  virtue  of  a  power  in  a  mortgage  or  trust 
deed  after  the  death  of  the  owner  of  the  equity  of  redemption ; 
but  foreclosure  may  be  made  in  the  same  manner  as  of  mortgages 
not  containing  a  power  of  sale. 

In  all  sales  in  pursuance  of  a  power,  at  least  thirty  days'  pre- 
vious notice  of  such  intended  sale  shall  be  given.  It  is  sufficient 
to  insert  in  such  notice  the  date  of  the  instrument,  the  names  of 
the  grantor  and  grantee,  and  of  the  assigns,  if  any  ;  the  amount 
of  indebtedness  the  instrument  was  given  to  secure,  the  amount 
claimed  to  be  due,  a  description  of  the  premises  to  be  sold,  and 
the  time,  place,  and  terms  of  the  sale  ;  and  no  sale  shall  be  made 
except  in  the  county  in  which  the  premises  are  situated.  The 
notice  shall  be  given  by  ^publication  once  in  each  week,  for  four 
successive  weeks,  in  some  newspaper  or  other  paper  authorized  by 
law  to  publish  legal  notices,  published  in  the  county  or  counties 
where  the  premises  are  situated,  or  if  no  paper  is  published  in 
the  county  or  counties  where  the  premises  are  situated,  the  near- 
est newspaper  published  in  tliis  state  ;  but  in  no  case  shall  a  no- 
tice be  given  for  a  shorter  time  than  is  required  by  the  mortgage 
or  deed  of  trust.  A  recital  in  a  deed  made  in  pursuance  of  a 
power,  that  due  notice  was  given,  is  j^rimd  facie  evidence  of  the 
giving  of  such  notice. 

The  mortgagor  may  authorize  the  sheriff  of  the  county  in  which 
the  land  or  some  part  thereof  is  situated  to  execute  the  power  of 
sale  granted  to  the  mortgagee  ;  in  which  case  the  sherilf  may  ad- 
vertise and  sell  })ursuant  to  the  power,  and  may  execute  convey- 
ances in  the  name,  and  as  the  attorney  in  fact,  of  the  mortgagor  ; 
and  the  mortgagee  may  purchase  at  the  sale.^ 

»  Calloway  v.  I'eoi.Ie's  Bank  of  Utile-         ^  r.  S.  1877,  p.  f>7tj. 
fontaine,  54  Ga.  441  ;   Kobctisou  r.  Vason,         »  The  purchaser  after  dcniand  in  writ- 
37  Ga.  f)G.  ing  upon  the  party  in  possession  may  ob- 

589 


§§  17;>4-lTo7.J       SrATUTORY    provisions    HK.LATING    TO 

Tho  statutes  iillowiiii^  nHlcinptioii  upon  sale  of  mortgagiHl  pivin- 
isos  liavo  no  appliralinn  to  a  sale  iiiuliT  a  trust  deed  or  power  in 
a  inortgaLTi'.^ 

1734.  Indiana. —  Power  of  .sali!  mortgages  are  not  in  use. 
Tliey  are  not  invalid  Uy  reason  of  the  power,  though  they  must 
be  foreelosed  in  equity.-  liy  autliority  given  the  mortgagee  inde- 
pendent of  the  mortgage,  he  may  act  as  the  agent  of  tlie  mort- 
gagor in  the  sale  of  the  premises.^  Trust  deeds  are  sometimes 
used,  and  sales  by  trustees  under  powers  in  such  deeds  are  au- 
thorized by  statute.* 

1735.  Iowa.  —  Deeds  of  trust  and  mortgages  with  powers  of 
sale  made  since  April  1,  1861,  can  be  foreclosed  only  by  action  in 
court  by  equitable  proceedings.  Deeds  of  trust  may  be  executed 
as  securities,  but  are  considered  as,  and  foreclosed  like,  mort- 
gages.5 

1736.  Kansas.  —  As  mortgages  can  be  foreclosed  by  suit  only, 
powers  of  sale  are  of  no  practical  advantage.*^  It  is  provided, 
however,  that  where  a  power  to  sell  lands  or  other  property  shall 
be  given  to  the  grantee,  in  any  mortgage  or  other  conveyance 
intended  to  secure  the  payment  of  money,  the  power  shall  be 
deemed  a  part  of  the  security,  and  shall  vest  in  any  person  who 
shall  become  entitled  to  the  money  so  secured  to  be  paid.^ 

1737.  Kentucky.  —  Power  of  sale  mortgages  and  trust  deeds 
must  be  enforced  by  a  court  of  equity  ;  but  in  making  sale  the 
court  will  follow  the  terms  of  the  power.*^ 

Sales  made  under  trust  deeds  to  secure  debts  are  invalid,  un- 
less the  maker  of  the  deed  join  in  it,  or  it  is  made  in  pursuance  of 
a  decree  or  order  of  court.'^     A  statute  passed  in  1873,  limited  in 

tain  possession  by  summary  process  under  "  Samuel  v.  Iloiliday,  1  Woolw.  400. 

the  forcible  entry  and  detainer  act.     Rev.  ^  Gen.  Statutes,  Kans.  1868,  c.  114,  §  18; 

Stat.  1874,  p.  535;  Rice  v.  Brown,  77  III.  2  Dassler's  Stat.  187G,  §  5631. 

549.  ^  Campbell  v.  Johnson,  4  Dana,  178. 

1  Bloom  r.  Van  Rensselaer,  15  111.  503.  »  Rev.   Stat.   1873,  p.  588.      See,  also, 

-  Revision,  1876,  vol.  2,  pp.  261,  334;  Lyons  v.  Field,  17  B.  Mon.  549  ;  Smith  v. 

Rowe  y.  Beckett, -30  Ind.  154;  Martin  v.  Vertrees,  2  Bush,  63.      But   this   statute 

Reed,  30  Ind.  218.  does    not   apply  to  a  sale  made  under  a 

«  Farley  v.  Eller,  29  Ind.  322.  power  of  attorney,  and  a  trust  to  apply 

*  1  Rev.  1876,  p.  915  ;  Act  of  June  17,  the  proceeds  to  the  payment  of  the  debts 

1852.  of  the  principal.      As  no  title  passed   to 

6  Code,  1873,  §  3319.    They  were  in  use  the  trustee,  such  as  would  enable  him  to 

before  that   date.      Pope   v.   Durant,   26  convey  the  land  in  his  own  name,  it  was 

Iowa,  2.33;  Crocker  v.  Robertson,  8  Iowa,  not  a  trust  deed  within   the  meaning  of 

404  ;  Fanning  v.  Kerr,  7  Iowa,  450.  the  statute.    Reed  v.  Welsh,  11  Bush,  450. 
590 


POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.       [§§  1738-1740. 

its  operation  to  cities  having  not  less  than  75,000  inhabitants, 
provides  that  the  trustee  may  sell  the  property  conveyed  at  pub- 
lic auction,  in  such  parcels  and  upon  such  terms,  as  may  be  di- 
rected in  the  deed,  the  trustee  first  giving  such  notice  of  the  time, 
place,  and  terms  of  sale  as  may  be  specified  by  the  deed ;  and  the 
trustee's  deed  vests  in  the  purchaser  all  the  right,  title,  and  inter- 
est of  the  grantor,  as  fully  as  if  he  himself  executed  it.^ 

1738.  Louisiana.  —  Mortgages  and  deeds  of  trust,  with  pow-* 
ers,  are  not  in  use. 

1739.  Maine.  —  Power  of  sale  mortgages  are  sometimes  used, 
though  trust  deeds  are  not. 

1740.  Maryland.  —  Power  may  be  given  to  the  mortgagee,  or 
any  other  person  named  in  the  deed,  to  sell  the  mortgaged  prem- 
ises, upon  the  terms  and  contingencies  expressed  in  the  mortgage, 
under  direction  of  the  court,^  and  when  the  interests  in  any  mort- 
gage are  held  under  one  or  more  assignments,  or  otherwise,  the 
power  of  sale  therein  contained  shall  be  held  divisible,  and  he  or 
they  holding  any  such  interest  who  shall  first  institute  proceed- 
ings to  execute  such  power  shall  thereby  acquire  the  exclusive 
riglit  to  sell  the  mortgaged  premises.^  Before  making  sale,  liow- 
ever,  the  person  authorized  to  sell  must  give  bond  to  the  state  in 
such  penalty  and  security  as  shall  be  approved  by  the  judge  or 
clerk  of  a  court  of  equity  of  the  city  or  county  in  which  the  prem- 
ises lie,  to  abide  by  and  fulfil  any  order  or  decree  which  shall  be 
made  in  relation  to  the  sale,  or  the  proceeds  of  it ;  which  bond  is 
for  tlie  security  of  all  persons  interested  in  the  property  or  the 

1  Rev.  Stat.  1873,  p.  844.  ment  is  binding   until   reversed.     A  sale 

2  Code,  1860,  p.  445.  ratified    by  the  court  cannot  be  called  in 
These  proceedings   are  under  the  gen-     question  in  a  collateral  proceeding.  Cockey 

eral   common  law   and   clianccry   powers  r.  Cole,  28  Md.  28.5.     In  the  city  of  Balti- 

of  the  court,  and  arc  simply  a  summary  more,  under  a  public  local  law,  a  decree 

mode  of  exercising  an   oniiimry  jurisdic-  for  sale  may  be  in  the  first  place  obtained 

tion.     Instead  of  a  bill  in  equity  for  fore-  from  the  court  of  equity  ;    and  the  sale  is 

closure,  the  agreement  of  the   parties,  as  made  by  a  trustee  appointed  by  the  court, 

expressed  in  the  power  contained   in  the  after  giving  bond  and  advertising.      He 

mortgage,  is  substituted  for  a  decree  of  reports  the  sale  to  the  court,  and  if  cvery- 

sale ;  and   upon    final    ratification  by  the  thing  is  properly  done  an  order  is  passed 

court  of  the   report,  the  aalo  has  all   the  ratifying  and  confirming  the  sale.     Code, 

judicial  sanction    tliat    it  could    have  on  vol.  2,  p.  307.     The  validity  of  such  sale 

formal  proceedings  in  equity.    Having  ju-  maybe  inquired  into  at  any  time  before 

risdiction  independent  of  the  statute,  the  the  final  order  of  confirmation  is  passed, 

court    may   decide    upon    every   question  Black  y.  Carroll,  24  Md.  2.')l. 

which  occurs  in  the  cause,  and  its  judg-  '  Laws,  1878,  c.  483. 

591 


§  1740. J  STAlUrUKY    PROVISIONS   KKLATING   TO 

proceoils  of  it.^  Such  notice  oi  the  sale  shall  be  given  as  is  pro- 
viiU'il  for  in  the  mortgage  ;  or  if  there  be  no  agreement  as  to 
notice,  then  the  party  olYering  tlie  property  for  sale  shall  give 
twenty  clays'  notice  of  the  time,  place,  and  terms,  by  advertise- 
ment in  sc)me  newspaper  printed  in  the  county  where  the  prem- 
ises lie  ;  or  if  there  be  no  such  newspaper,  then  in  a  newspaper 
having  a  large  circulation  in  the  county,  and  also  by  advertise- 
ment put  up  at  the  court-house  door  of  said  county. 

All  such  sales  must  be  reported  under  oath  to  the  court,  and 
there  must  be  the  same  proceedings  on  such  report  as  if  the  same 
were  made  by  a  trustee  under  a  decree  of  court,  and  the  sale  may 
be  conlirmed  or  set  aside.^  If  set  aside  a  resale  may  be  ordered, 
and  if  justice  requires  it  the  court  may  appoint  a  trustee  to  sell 
the  same.  The  sale,  when  confirmed  by  the  court  and  the  pur- 
chase money  is  paid,  passes  all  the  title  which  the  mortgagor  had 
at  the  time  of  the  recording  of  the  mortgage.  Any  person  hav- 
ing an  interest  in  the  equity  of  redemption  may  apply  to  the 
court  confirming  the  sale  to  have  the  surplus  of  the  proceeds  of 
sale,  after  payment  of  the  mortgage  debt  and  expenses,  paid  over 
to  such  person,  or  so  much  as  will  satisfy  his  claim,  and  the  court 
distributes  the  surplus  equitably  among  the  claimants.  After  the 
sale  has  been  confirmed,  the  person  making  the  sale  conveys  to 
the  purchaser,^  or  if  the  vendor  and  purchaser  be  the  same  person, 
the  court,  in  its  order  confirming  the  sale,  appoints  a  trustee  to 
convey  the  property  to  the  purchaser  on  the  payment  of  the  pur- 
chase money .^  The  mortgagee,  or  his  assignee,  or  legal  repre- 
sentatives, may  purchase  at  the  sale.  All  sales  must  be  in  the 
county  or  city  where  the  premises  are  situated,  and  if  in  more 
than  one  county,  the  sale  may  be  made  in  either.  The  purchaser 
on  the  confirmation  of  the  sale  may   have   a  writ  of  possession 

1  A  bond  filed  on  the  day  of  sale  is  pre-  Cockey  i;.  Cole,  28  Md.  285  ;  Morrill  v. 
sumed  to  have  been  filed  before  the  sale.     Gelston,  34  Md.  413. 

Hubbard  v.  Jarrell,  23  Md.  C6.  »  When  the  decree  provides  for  a  credit 

2  The  proper  time  to  take  advantage  of  as  to  part  of  the  purchase  money,  and  the 
any  failure  to  comply  with  the  law  is  when  sale  is  made  on  credit  and  confirmed,  but 
the  sale  is  reported.  Gayle  v.  Fattle,  14  the  purchaser  waives  the  credit  and  pays 
Md.  69.  When  the  sale  is  confirmed  it  the  whole  purchase  money  at  once,  no  ob- 
has  all  the  judicial  sanction  that  it  could  jection  can  be  made  that  the  deed  is  exe- 
have  if  it  had  been  made  by  virtue  of  an  culcd  forthwith,  before  the  expiration  of 
ordinary  decree,  and  cannot  be  called  in  the  term  of  credit.  Morrill  v.  Gelston,  34 
question     iu    any   collateral    proceeding.  Md.  413. 

*  Laws,  1874,  p.  683. 

592 


POWER   OF   SALE   MORTGAGES   AND   TRUST    DEEDS.       [§  1741. 

against  the  mortgagor.  On  death  of  the  mortgagee  his  interest 
vests  in  his  executor  or  administrator,  who  may  release  in  the 
same  manner  as  the  mortgagee  could. 

1741.  Massachusetts.  —  Mortgages  with  powers  of  sale  are  al- 
most exclusively  used  in  this  state.  When  a  power  of  sale  is  con- 
tained in  a  mortgage  and  a  conditional  judgment  has  been  entered 
the  demandant  may,  instead  of  a  writ  of  possession,  have  a  decree 
entered  that  the  property  be  sold  pursuant  to  such  power  of  sale.^ 
The  party  selling  must  within  ten  days  thereafter  make  a  report 
under  oath  to  the  court,  and  the  sale  may  be  confirmed.  But  in- 
stead of  such  suit  and  decree  the  mortgagee,  or  his  assignee,  may 
give  notice  and  sell  in  accordance  with  the  power  ;2  and  within 
thirty  days  after  selling  he  must  file  a  copy  of  the  notice  and  his 
affidavit  setting  forth  his  acts  in  the  premises  fully  and  particu- 
larly, in  the  office  of  the  registr}-  of  deeds  in  the  county  or  district 
where  the  property  is  situated.^  If  it  appears  by  such  affidavit 
that  he  has  in  all  respects  complied  with  the  requisitions  of  the 
power,  the  affidavit,  or  a  certified  copy  of  the  record  of  it,  is  ad- 
mitted as  evidence  that  the  power  of  sale  was  duly  executed.* 

All  statutes  authorizing  administrators,  guardians,  and  trustees 
to  mortgage  real  estate  are  construed  as  authorizing  the  giving  of 
a  mortgage  containing  a  power  of  sale.^ 

No  sale  under  a  power  is  valid  and  effectual  to  foreclose  the 
mortgage,  unless  previous  notice  of  the  sale  shall  have  been 
published  once  a  week,  the  first  publication  to  be  not  less  than 
twenty-one  days  before  the  day  of  sale,  for  three  successive  weeks, 
in  some  newspaper,  if  there  be  any,  published  in  the  city  or  town 
where  the  mortgaged  premises  are  situated;  but  this  requiiement 
does  not  avoid  the  necessity  of  also  giving  notice  of  such  sale  in 
accordance  with  the  terms  of  tlie  mortgage.*' 

When  a  mortgage  is  foreclosed  by  a  sale  under  a  power  or 
otherwise,  and  the  person  having  a  valid  title  to  the  estate  is  kept 

1  Gen.  iSlat.  c.  HO,  §§  38-44;  and  see  ♦  Tliis  provision    rcHpcctinf;  tlic  record 

St.    1868,   c.    197.     Trust  deeds  are  very  of  an   attidavit  of  the   sale   is  lield  to  1)0 

seldom  used.  merely  directory,  and  a  sale  is  good,  and 

*  This  is  the  usual  mode  of  proceeding ;  the  title  valid,  if  no  affidavit  is  ever  made 

a  suit  and  decree   lieing  very  rare  when  or  recorded.    Learned  v.  Foster,  11 7  Mass. 

there  is  a  vnlid  |)0wer  of  sale.  SG.") ;    Burns   v.   Thayer,    115    Mass.  89; 

«  The  aflidavit  need  not  allege  the  rcn-  Field  v.  Gooding,  lofi  Mass.  310. 

dering  of  an  account,  nor  the  disposition  ^  Stat.  1S73,  c.  280. 

made  of  the  purchase  money.     Childs  v.  '  Acts,  1877,  c.  215. 
Dolan,  5  Allen,  319. 

VOL.  u.                     38  593 


§    17  1-.]  STATUTOKV    PKOVISIONS    HKLATING    TO 

out  of  possi'ssiim  by  any  person  without  right,  ho  may  recover 
possession  by  the  summary  process  prpvitled  for  the  recovery  of 
himls  unhiwfully  hekl  by  tenants.^ 

In  a  case  in  Massachusetts,  decitled  in  1858,  it  was  hekl  that  an 
agreement  to  give  a  mortgage  does  not  require  the  giving  of  a 
mortgage  with  a  power  of  sale,  because  such  power  was  declared 
not  to  be  an  onlinary  accompaniment  of  a  mortgage.'^  But  since 
the  time  of  this  decision  this  form  of  mortgage  has  come  to  be 
used  almost  to  the  complete  exclusion  of  any  other,  and  it  seems 
doubtful  at  least  whether  this  decision  would  hold  good  at  the 
present  time.  There  is  no  reason  now,  it  would  seem,  why  a 
power  of  sale  should  not  be  regarded  here,  as  in  England,  a  nec- 
essary incident  to  a  mortgage  ;  and  that  an  agreement  to  give 
a  mortgage,  or  a  power  by  will  or  otherwise  to  raise  money  by  a 
mortgage,  implies  the  giving  of  a  mortgage  with  a  power  of  sale. 

1742.  Michigan, 3  —  A  mortgage  containing  a  power  of  sale 
upon  default  may  be  foreclosed  by  advertisement.  To  entitle  the 
party  to  give  notice  and  to  make  such  foreclosure,  it  is  requisite  : 
1st.  That  some  default  shall  have  occurred ;  2d.  That  no  suit 
shall  have  been  instituted  at  law  to  recover  the  debt  or  any  part 
of  it ;  or  if  instituted,  that  it  has  been  discontinued,  or  that  exe- 
cution has  been  returned  unsatisfied  in  whole  or  in  part ;  and  3d. 
That  the  mortgage  has  been  duly  recorded,  as  well  as  any  assign- 
ment of  it ;  4th.  If  given  to  secure  the  payment  of  money  by  in- 
stalments, each  instalment  after  the  first  is  deemed  a  separate 
and  independent  mortgage,  and  may  be  foreclosed  for  each  instal- 
ment in  the  same  manneu,  and  with  like  effect,  as  if  given  for 
each  separate  instalment.^ 

1  Acts,  1879,  c.  237.  several  mortga<;es  given  at  the  same  time, 

2  Bray  ton  v.  N.  E.  Coal  Mining  Co.  11  and  it  makes  no  difference  wlicther  they 
Gray,  493.  And  see  Piatt  v.  McClure,  3  are  all  owned  together  or  by  different 
Wood.  &  M.  151.  parties.     If   the   sale   be   expressly   made 

8  Compiled  Laws,  1871,  pp.  1921-1925.  subject  to  the  other  instalments,  the  effect 

Trust  deeds  in  the  nature  of  mortgages  is  to  charge  the  land  in  the  hands  of  the 

seem  not  to  be  in  use.  purchaser  with  the  payment  of  these;  but 

*  Formerly,  a  foreclosure  under  a  power  if  not  so  made,  though  the  sale  may  bar 

of    sale  for   one   instalment  forever  dis-  the  equity  of  redemption  of  the  mortgagor 

charged  the  land  of  the  mortgage.     Kim-  and  subsequent  purchasers,  it  only  trans- 

meli  f.  Willard,  1  Doug.  217.    Now  under  fers  to  the   purchaser  one  instalment  of 

the  statute  one  instalment,  by  reason  of  the  mortgage  and  leaves  the  others  unaf- 

falling  due  sooner,  has  no  preference  over  fected.     There  is  no  redemption  by  one 

the  others.      All    the   instalments   stand  as  against  the  other.     McCurdy  v.  Clark, 

upon  the  same  basis,  in  like  manner  as  27  Mich.  445. 

594 


POWER    OF   SALE   MORTGAGES    AND   TRUST   DEEDS.       [§  1742. 

Notice  is  given  by  publishing  the  same  for  twelve  successive 
weeks,  at  least  once  in  each  week,  in  a  newspaper  printed  in  the 
county  where  the  premises,  or  some  part  of  them,  are  situated,  if 
there  be  one  ;  and  if  no  newspaper  be  printed  in  such  county, 
then  such  notice  shall  be  published  in  a  paper  published  nearest 
thereto.  The  notice  must  specify  :  1st.  The  names  of  the  mort- 
gagor and  of  the  mortgagee,  and  assignee,  if  any  ;  2d.  The  date 
of  the  mortgage,  and  when  recorded  ;  8d.  The  amount  claimed  to 
be  due  at  the  date  of  the  notice  ;  and  4th.  A  description  of  the 
mortgaged  premises,  conforming  substantially  with  that  contained 
in  the  mortgage. 

The  sale  must  be  at  public  vendue,  between  the  hour  of  nine 
o'clock  in  the  forenoon  and  the  setting  of  the  sun,  at  the  place 
of  holding  the  circuit  court  within  the  county  in  which  the  prem- 
ises to  be  sold,  or  some  part  of  them,  are  situated,  and  must  be 
made  by  the  person  appointed  for  that  purpose  in  the  mortgage, 
or  b}'^  the  sheriff,  under  sheriff,  or  a  deputy  sheriff'  of  the  county, 
to  the  highest  bidder.  The  sale  may  be  postponed  from  time  to 
time,  by  inserting  a  notice  of  such  postponement  as  soon  as  prac- 
ticable, in  the  newspaper  in  which  the  original  advertisement  was 
published,  and  continuing  such  publication  until  the  time  to  which 
the  sale  is  postponed,  at  the  expense  of  the  party  requesting  such 
postponement.  If  the  premises  consist  of  different  farms,  tracts, 
or  lots,  not  occupied  as  one  parcel,  they  must  be  sold  separately, 
and  no  more  can  be  sold  than  may  be  necessary  to  satisfy  the 
amount  due  on  the  mortgage,  at  the  date  of  the  notice  of  sale, 
with  interest,  and  the  costs  and  expenses  allowed  by  law.^  But 
if  distinct  lots  be  occupied  as  one  parcel,  they  may  in  such  case 
be  sold  together.^  The  mortgagee,  his  assigns,  or  his  or  their  le- 
gal representatives,  may,  fairly  and  in  good  faith,  purchase  the 
premises  so  advertised,  or  any  part  thereof,  at  such  sale.  The 
officer  or  person  making  the  sale  must  forthwith  execute  and  de- 
liver to  the  purchas(;r  a  deed  of  the  premises,  specifying  tiie  pre- 
cise amount  for  which  sucii  parcel  was  sold,  and  must  indorse 
thereon  the  time  when  such  deed  will  become  operative,  in  case 
the  premises  are  not  redeemed  according  to  law,  and  must  deposit 
the  same  with  the  register  of  deeds  of  the  county  in   wliich  the 

'  The  decil  in  such  case  must  sliow  the         '■'  Laws,  1875,  No.  29,  p.  20.    See  Grover 
price  of  each  parcel,  and  not  one  sum  for     v.  Fox,  36  Mich,  461. 
all.     Lee  v.  Mason.  10  Mich.  403. 

595 


§  1742.]  STATUTORY    PROVISIONS    RELATING   TO 

luiul  is  siluati'd,  us  soon  as  practicable  aiul  williiu  twenty  days 
after  such  sale.^ 

Unless  the  premises  are  redeemed  within  the  time  limited  for 
such  redemption,  as  hereinafter  pix)vided,  such  deed  thereupon 
becomes  operative  and  may  be  recorded,  together  with  any  mem- 
orandum of  eancelment  of  a  portion  of  the  same  which  nuiy  have 
been  entered  thereon  by  the  register,  and  vests  in  the  grantee 
all  the  right,  title,  and  interest,  which  the  mortgagor  had  at  the 
time  of  the  execution  of  the  mortgage,  or  any  time  thereafter, 
except  as  to  any  parcels  redeemed ;  but  prior  liens  are  not  in 
any  way  prejudiced  or  affected.  The  premises  may  be  redeemed 
within  one  year  from  the  time  of  the  sale,  by  paying  to  the  pur- 
chaser, or  his  assigns,  or  to  the  register  of  deeds,  for  the  benefit 
of  such  purchaser,  the  sum  which  was  bid,  with  interest  from  the 
time  of  the  sale,  at  the  rate  per  cent,  borne  by  the  mortgage,  not 
exceeding  ten  per  cent,  per  annum,  whereupon  the  deed  becomes 
void  ;  but  in  case  any  distinct  lot  or  parcel  separately  sold  is  re- 
deemed, leaving  a  portion  of  the  premises  unredeemed,  then  the 
deed  is  inoperative  merely  as  to  the  parcel  or  parcels  so  redeemed, 
and  as  to  those  not  redeemed  is  valid.  Upon  the  payment  of  the 
entire  sum  bid  at  the  sale  and  interest  to  the  register  of  deeds,  or 
upon  delivering  to  such  register  a  certificate,  signed  and  acknowl- 
edged by  the  person  entitled  to  receive  the  same,  setting  forth 
that  such  sum  and  interest  have  been  paid,  the  register  thereupon 
destroys  the  deed,  and  enters  in  the  margin  of  the  record  of  such 
mortgage  a  memorandum  that  the  mortgage  is  satisfied  ;  or  in 
case  one  or  more  parcels  are  redeemed,  it  is  the  duty  of  the  re- 
gister to  enter  upon  the  face  of  the  deed  a  memorandum  that  the 
same  is  inoperative  as  to  the  parcels  redeemed,  and  to  enter  in 
the  margin  of  the  record  of  the  mortgage  a  memorandum  that  the 
same  is  satisfied  as  to  the  parcels  redeemed.^  Any  surplus  must 
be  paid  to  the  mortgagor,  his  personal  representatives  or  assigns, 
unless  a  claim  for  it  shall  have  been  filed  with  the  officer,  where- 
upon the  officer  is  required  to  pay  the  surplus  to  the  i-egister 
of  the  circuit  court  in  chancery  for  the  county,  and  the  claim  is 
thereupon  heard  and  adjudged  in  that  court. ^ 

Any  party  desiring  to  perpetuate  the  evidence  of  any  sale  may 
procure:  1st.   An  affidavit  of  the  publication  of  the  notice,  to  be 

1  See  Grover  i;.  Fox,  36  Mich.  461.  »  Acts,  1877,  No.  115,  p.  101. 

2  Acts,  1677,  No.  129,  p.  118. 

596 


POWER    OF   SALE    MORTGAGES   AND   TRUST   DEEDS.       [§  1743. 

made  by  the  printer  of  the  newspaper  in  which  it  was  inserted,  or 
by  some  one  in  his  employ  ;  2d.  An  affidavit  of  the  fact  of  sale 
by  the  auctioneer,  stating  the  time  and  place  of  it,  the  sum  bid, 
and  the  name  of  the  purchaser.  Such  affidavits  must  be  recorded  ; 
and  the  original  affidavits  or  the  record  of  them,  and  certified 
copies,  are  presumptive  evidence  of  the  facts  therein  contained.^ 

When  any  person  continues  in  possession  of  any  premises  after 
the  expiration  of  the  time  limited  by  law  for  redemption,  sum- 
mary proceedings  may  be  had  to  recover  possession. 

1743.  Minnesota.  Every  mortgage  of  real  estate,  containing 
a  power  of  sale,  upon  default  being  made,  may  be  foreclosed  by 
advertisement  within  ten  years  after  the  maturity  of  such  mort- 
gage or  the  debt  secured.  To  entitle  any  party  to  make  such  fore- 
closure, it  is  requisite :  that  some  default  in  a  condition  of  such 
mortgage  has  occurred,  by  which  the  power  to  sell  has  become 
operative;  that  no  action  or  proceeding  has  been  instituted  at 
law  to  recover  the  debt  then  remaining  secured  by  such  mortgage 
or  any  part  thereof ;  or  if  the  action  or  proceeding  has  been  in- 
stituted, that  the  same  has  been  discontinued,  or  that  an  execution 
upon  the  judgment  rendered  therein  has  been  returned  unsatis- 
fied in  whole  or  in  part ;  that  the  mortgage  containing  such  power 
of  sale  has  been  duly  recorded,  and  if  it  has  been  assigned,  that 
all  the  assignments  have  been  recorded.  When  a  mortgage  is 
given  to  secure  the  payment  of  money  by  instalments,  each  of 
the  instalments,  either  of  principal  or  interest,  mentioned  in  such 
mortgage,  may  be  taken  and  deemed  to  be  a  separate  and  inde- 
pendent mortgage,  may  be  foreclosed  in  the  same  manner,  and 
with  like  effect,  as  if  such  separate  mortgage  was  given  for  each  of 
such  subsequent  instalments,  and  a  redemption  of  any  such  sale 
by  the  mortgagee  has  the  like  effect  as  if  the  sale  for  such  instal- 
ment liad  been  made  upon  an  independent  mortgage.  In  such 
case,  if  the  mortgaged  premises  consist  of  separate  and  distinct 
farms  or  tracts,  only  such  tract  or  tracts  are  sold  as  are  suHicient 
to  satisfy  tlie  instalment  then  due,  with  interest  and  costs  of  sale  ; 
but  if  said  premises  do  not  consist  of  such  separate  and  distinct 
farms  or  tracts,  ti»o  whole  is  sold,  and  in  either  case  tlie  proceeds 
of  such  s;ile,  after  satisfying  tlui  interest  or  instalincMit  of  the 
principal  due,  with    interest  and  costs  of    sale,   must  In;  applied 

1  An  nffidavit  made  seven  or  pipht  years  after  the  sale  is  not  such  i)rcsiimi)livc  evi- 
dence.    Mundy  v.  Monroe,  1  Mich.  68. 

597 


§  174o.]  STATUTORY    TROVISIONS    RKLATING    TO 

towards  tho  payment  of  tlio  vcsidiio  of  the  sum  secured  Uy  said 
mort^ai^e,  and  not  due  untl  ])ayal)U^  at  the  time  of  such  sale  ;  and 
if  suih  resiihie  does  not  bear  interest,  such  application  is  made 
with  a  rebate  of  the  legal  interest  for  the  time  during  which  the 
residue  shall  not  be  due  and  payable  ;  and  the  surplus,  if  any,  is 
paid  to  the  mortgagor,  his  legal  representatives  or  assigns. 

Notice  that  such  mortgage  will  be  foreclosed  by  sale  of  tho 
mortgaged  premises,  or  some  part  of  them,  is  given  by  publishing 
the  same  for  six  successive  weeks,  at  least  once  in  a  week,  in  a 
newspaper  printed  and  published  in  the  county  where  the  prem- 
ises intended  to  be  sold,  or  some  part  thereof,  are  situated,  if  there 
is  one  ;  if  not,  then  in  a  newspaper  printed  and  published  in  an  ad- 
joining county,  if  there  is  such  a  newspaper;  if  there  is  not,  then 
in  a  newspaper  printed  and  published  in  the  county  to  which  the 
county  in  which  the  premises  are  located  is  attached  for  judicial 
purposes,  if  there  be  such  a  newspaper ;  if  there  is  not,  then  in  a 
newspaper  printed  and  published  at  the  capital  of  the  state.  In 
all  cases,  a  copy  of  such  notice  must  be  served  in  like  manner  as  a 
summons  in  civil  actions  in  the  district  court,  at  least  four  weeks 
before  the  time  of  sale,  on  the  person  in  possession  of  the  mort- 
gaged premises,  if  the  same  are  actually  occupied.  Proof  of  such 
service  may  be  made,  certified,  and  recorded  in  the  same  manner 
as  proof  of  publication  of  a  notice  of  sale  under  a  mortgage. 
Every  notice  must  specify :  the  names  of  the  mortgagor  and  of 
the  mortgagee,  and  the  assignee,  if  any ;  the  date  of  the  mortgage 
when  recorded  ;  the  amount  claimed  to  be  due  thereon,  and  taxes, 
if  any,  paid  by  the  mortgagee  at  the  date  of  the  notice  ;  a  descrip- 
tion of  the  mortgaged  premises,  conforming  substantially  to  that 
contained  in  the  mortgage ;  the  time  and  place  of  sale.  The  sale 
is  at  public  vendue,  between  the  hour  of  nine  o'clock  in  the  fore- 
noon and  the  setting  of  the  sun,  in  the  county  in  which  the  prem- 
ises are  to  be  sold,  or  some  part  thereof  are  situated,  and  is  made 
Vjy  the  sheriff  of  said  county,  dr  his  deputy,  to  the  highest  bidder. 
Such  sale  may  be  postponed  from  time  to  time,  by  inserting  a 
notice  of  such  postponement,  as  soon  as  practicable,  in  the  news- 
pa{)er  in  which  the  original  advertisement  was  published,  and  con- 
tinuing such  publication  until  the  time  to  which  the  sale  is  post- 
poned, at  the  expense  of  the  party  requesting  such  postponement. 
If  the  mortgaged  premises  consist  of  separate  and  distinct  farms 
or  tracts,  they  must  be  sold  separately,  and  no  more  farms  or 
598 


POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.       [§  1743. 

tracts  shall  be  sold  than  are  necessaiy  to  satisfy  the  amount  due 
on  such  mortgage  at  the  date  of  notice  of  such  sale,  with  interest, 
taxes  paid,  and  costs  of  sale.  The  mortgagee,  his  assignee,  or  his 
or  their  legal  representatives,  may  fairly  and  in  good  faith  pur- 
chase the  premises  so  advertised,  or  any  part  thereof,  at  such  sale. 
The  officer  is  required  to  make  and  deliver  to  the  purchaser  a 
certificate,  under  his  hand  and  seal,  containing  a  description  of  the 
mortgage  under  which  such  sale  is  made  ;  a  description  of  the 
real  property  sold  ;  the  price  paid  for  each  parcel  sold  separately  ; 
the  date  of  the  sale  and  the  name  of  the  purchaser,  and  the  time 
allowed  by  law  for  redemption.  Said  certificate  must  be  executed, 
proved,  or  acknowledged,  and  recorded  as  required  by  law  for  a 
conveyance  of  real  estate,  within  twenty  days  after  such  sale. 
Such  certificate,  so  proved,  acknowledged,  and  recorded,  upon  the 
expiration  of  the  time  for  redemption,  operates  as  a  conveyance  to 
the  purchaser  or  his  assignee  of  all  the  right,  title,  and  interest  of 
the  mortgagor  in  and  to  the  premises  named  therein,  at  the  date 
of  such  mortgage,  without  any  other  conveyance  whatever. 

The  mortgagor,  his  heirs,  executors,  administrators,  or  assigns, 
whose  real  property  is  sold,  may,  within  twelve  months  after  such 
sale,  redeem  such  property,  as  hereinafter  provided,  by  paying  the 
sum  of  money  for  which  the  same  was  sold,  together  with  interest 
on  the  same  from  the  time  of  such  sale.  No  redemption  can  be 
made  for  real  property  sold  when  the  mortgage  foreclosed  contains 
a  distinct  rate  of  interest,  more  than  seven  per  cent,  per  annum, 
unless  the  party  entitled  to  redeem  shall  pay,  within  the  time  pro- 
vided, the  sum  for  which  said  property  was  sold,  together  with 
interest  thereon  from  date  of  sale  to  the  time  of  redemption,  at 
the  rate  specified  in  the  mortgage,  not  to  exceed  ten  per  cent,  per 
annum.  Wiien  no  rate  of  interest  is  specified  in  the  mortgage, 
the  rate  of  interest  after  sale  is  seven  per  cent,  per  annum  on  the 
amount  for  which  the  property  was  sold.  Redemption  is  made  as 
follows :  The  person  desiring  to  redeem  is  required  to  pay  to  the 
person  holding  the  right  acquired  under  such  sale,  or  for  him  to 
the  sheriff  who  made  tiie  sale,  or  his  successor  in  ofiice,  the  amount 
required  by  law  for  such  redemption,  and  to  produce  to  such  per- 
son or  officer  a  certified  copy  of  the  docket  of  the  judgment,  or 
the  d(;ed  of  conveyance  or  iHortgage,  or  of  the  record  or  files,  evi- 
dencing any  other  lien  uii(l<i-  which  he  claims  a  right  to  redeem, 
certified  by  the  officer  in  wIkjsc  custody  such  docket,  record,  or 


§  1743.]  STATUTORY    PROVISIONS    KKLATING    TO 

files  shall  W  ;  any  assigimicnt  necessary  to  establish  his  (daim, 
veritied  hy  tlu'  allidavit  of  liiniself  or  the  subscribing  witness 
thereto,  or  of  some  person  acquainted  with  the  signature  of  the 
assignor  ;  and  an  atlidavit  of  himself  or  his  agent,  showing  the 
amount  then  actually  due  on  his  lien,  The  person  or  officer  from 
whom  such  redemption  is  made  is  required  to  make  and  deliver 
to  the  person  redeeming  a  certificate  under  his  hand  and  seal,  con- 
taining: the  name  of  the  person  redeeming,  and  the  amount  })aid 
by  him  on  such  redemption  ;  a  description  of  the  sale  for  which 
such  redem})tion  is  made,  and  of  the  property  redeemed  ;  and 
stating  upon  what  claim  such  redemption  is  made  ;  and  if  ujjon  a 
lien,  the  amount  claimed  to  be;  due  thereon  at  the  date  of  redemp- 
tion. Such  certificates  must  be  executed  and  proved,  or  acknowl- 
edged and  recorded,  as  provided  by  law  for  conveyances  of  real 
estate,  and  if  not  so  recorded  within  ten  days  after  such  redemp- 
tion, such  redemption  and  certificate  are  void  as  against  any  per- 
son in  good  faith  making  redemption  from  the  same  person  or 
lien.  If  such  redemption  is  made  by  the  owner  of  the  property 
sold,  his  heirs  or  assigns,  such  redemption  annuls  the  sale  ;  if  by  a 
creditor  holding  a  lien  upon  the  property  or  any  part  thereof,  said 
certificate,  so  executed  and  proved  or  acknowledged  and  recorded, 
operates  as  an  assignment  to  him  of  the  right  acquired  under  such 
sale,  subject  to  such  right  of  any  other  person  to  redeem  as  is  or 
may  be  provided  by  law.  If  no  such  redemption  is  made,  the 
senior  creditor  having  a  lien,  legal  or  equitable,  on  the  real  estate, 
or  some  part  thereof,  subsequent  to  the  mortgage,  may  redeem 
within  five  days  after  the  expiration  of  the  said  twelve  months,  and 
each  subsequent  creditor,  having  such  lien,  within  five  days  after 
the  time  allowed  all  prior  lien  holders  as  aforesaid,  may  redeem 
by  paying  the  amount  aforesaid,  and  all  liens  prior  to  his  own, 
held  by  the  party  from  whom  redemption  is  made.  But  no  cred- 
itor is  entitled  to  redeem,  unless,  within  the  year  allowed  for  re- 
demption, he  files  notice  of  his  intention  to  redeem  in  the  office  of 
the  register  of  deeds  where  the  mortgage  is  recorded. 

The  interest  acquired  upon  any  such  sale  is  subject  to  the  lien 
of  any  attachment,  or  judgment  duly  made  and  docketed,  against 
all  persons  holding  the  same,  as  in  case  of  real  property,  and  may 
be  attached  or  sold  on  execution  in  the  same  manner.  If,  after 
sale  of  any  real  estate  made  as  prescribed,  there  remains  in  the 
hands  of  the  officer  making  the  sale  any  surplus  money  after  satis- 
600 


POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.       [§  1743. 

fying  the  mortgage  on  which  such  real  estate  was  sold,  and  pay- 
ment of  the  tax  and  cost  of  sale,  the  surplus  is  paid  over  by  said 
officer,  on  demand,  to  the  mortgagor,  his  legal  representatives  or 
assigns.  Any  party  desiring  to  perpetuate  the  evidence  of  any 
sale  made  in  pursuance  of  the  provisions  of  this  chapter  may  pro- 
cure an  affidavit  of  the  publication  of  the  notice  of  sale,  and  of  any 
notice  of  postponement,  to  be  made  by  the  printer  of  the  news- 
paper in  which  the  same  was  inserted,  or  by  some  person  in  his 
employ  knowing  the  facts ;  and  an  affidavit  of  the  facts  of  any 
sale  pursuant  to  such  notice  to  be  made  by  the  person  who  acted 
as  an  auctioneer  in  the  sale,  stating  the  time  and  place  at  which 
the  same  took  place,  the  sum  bid,  and  the  name  of  the  purchaser, 
which  affidavit  may  be  taken  and  certified  to  by  any  officer  author- 
ized by  law  to  administer  oaths.  Such  affidavit  is  recorded  at 
length  by  the  register  of  deeds  of  the  county  in  which  the  prem- 
ises are  situated,  in  a  book  kept  for  the  record  of  deeds,  and  such 
original  affidavits  ;  the  record  thereof,  and  certified  copies  of  such 
record,  are  presumptive  evidence  of  the  facts  therein  contained. 
A  record  of  the  affidavits  as  above  provided,  and  of  the  certificates 
executed  on  the  sale  of  the  premises,  is  sufficient  to  pass  the  title 
thereto,  and  the  conveyance  is  an  entire  bar  of  all  claims  or  equity 
of  redemption  of  the  mortgagor,  his  heirs  and  representatives,  and 
of  all  persons  claiming  muler  him  or  them,  by  virtue  of  any  title 
subsequent  to  such  mortgage.  Within  ten  days  after  foreclosure 
of  any  mortgage  under  the  provisions  of  this  act,  the  party  fore- 
closing, or  his  attorney,  must  make  and  file  with  the  register  of 
deeds  in  the  county  where  the  prf)perty  is  located  an  affidavit  of 
costs  and  disbursements,  including  attorney's  fees  embraced  in 
the  foreclosure  sale,  and  that  the  same  has  been  absolutely  and 
unconditionally  paid  or  incurred.  The  mortgagor,  his  heirs  or  as- 
signs, at  any  time  within  one  year  after  foreclosure,  may  recover 
from  the  owner  of  the  mortgage  at  the  time  of  foreclosure  thiee 
times  the  amount  of  any  costs  or  disbursements  not  absohitcly 
paid  for  said  foreclosure,  and  three  times  the  amount  of  any  bo- 
nuses or  interest  over  and  above  twelve  per  cent,  embraced  in 
such  foreclosure,  and  for  which  the  property  was  sold,  unless  said 
8urf)lus  has  been  paid  to  tiie  mortgagor  or  his  assigns.^ 

A  mortgage  containing  a  power  of  sale  may  be  foreclosed  con- 

'  Laws,  1878,  c.  53.     For  act  cmpow-     to  foreclose  by  ndvortiscmcnt,  sec  Laws, 
ering  foreign  executors  and  administratorH     1870,  c.  41. 

601 


§§   171  I,  IT  1;').]       STATUTOHY    PROVISIONS    RKLATING    TO 

foniKilily  to  tilt'  nviiiinMiu'iits  of  (he  st;itiitc,  without  rogard  to 
requiri'inonts  of  tlu'  power,  that  the  inortgiigee  should  enter  and 
tiike  possession  of  the  premises  before  selling ;  that  the  sale  should 
be  on  the  premises,  and  that  the  mortgagee  should  furnish  an  ac- 
count of  the  sale  to  the  mortgagor.^  Whether  the  statute  be 
Miperative,  so  that  a  foreclosure  conducted  in  accordance  with 
the  power  when  this  provides  a  different  mode  than  that  in  the 
statute,  tlu^  court  do  not  decide  in  the  case  referred  to.  In  New 
York  a  similar  statute  seems  to  have  been  held  imperative.^ 

1744.  Mississippi.  —  Power  of  sale  mortgages  and  trust  deeds 
are  in  use.  At  tirst  it  was  thought  that  the  power  could  not  be 
exercised  without  the  aid  of  a  court  of  chancery ;  ^  but  this  aid  was 
very  soon  dispensed  with,  and  sales  under  the  power  held  effectual 
to  bar  the  equity  of  redemption."^  All  lands  sold  under  and  by 
virtue  of  any  deed  of  trust  or  mortgage  must  be  divided  into  tracts 
not  to  exceed  one  hundred  and  sixty  acres,  and  sold  in  such  sub- 
divisions as  under  judicial  sales,  whenever  the  debtor  shall  demand 
this  of  the  trustee  or  mortgagee,  and  such  a  mode  of  sale  is  not  in 
conflict  with  the  terms  of  the  contract  expressed  in  the  deed  of  trust. ^ 

1745.  Missouri.  —  A  deed  of  trust  is  the  usual  form  of  giving 
security  upon  real  estate  ;  but  a  mortgage  with  a  power  of  sale 
in  the  mortgagee  or  his  a^ent  is  a  form  of  security  often  used, 
and  has  been  repeatedly  recognized  by  the  courts  as  valid.  Such 
a  power  may  be  conferred  upon  a  county  as  mortgagee,  and  may 
be  enforced  by  it.*^  Deeds  of  trust  in  the  nature  of  mortgages 
at  the  option  of  the  cestuis  que  trust,  their  executors  or  admin- 
istrators, or  assignees,  may  be  foreclosed  by  them,  and  the  prop- 
erty sold  in  the  same  manner,  in  all  respects,  as  in  the  case  of 
mortgages ;  ^  and  all  real  estate  which  may  be  sold  by  the 
trustees,  or  any  one  representing  them  in  any  deed  of  trust  here- 
after made,  according  to  the  terms  of  said  deed,  without  the  said 
deed  of  trust  having  been  first  foreclosed  according  to  this  section, 
and  which  shall  be  bought  in  at  said  sale  by  the  cestui  que  trust 
or  his  assignee,  or  by  any  other  person  for  them  or  either  of  them, 
shall  be  subject  to  redemption  by  the  grantor  in  said  deed,  or  his 
executors,  administrators,  or  assigns,  at  any  time  within  one  year 

1  Butterfield  v.  Farnliam,  19  Minn.  85.  *  Sims  v.  Ilundly,  3  Miss.  (2  How.)  896. 

2  Lawrence  v.  Farmers'  Loan  &  Trust         ''  Laws,  1876,  p.  37. 

Co.  13  N.  y.  200.  c  Mann  v.  Best,  62  Mo.  491,  495. 

»  Ford  V.  Russell,  1  Freem.  Ch.  (Miss.)         ^  Wagner'a  Stat.  954,  §  2. 
42. 

602 


POWER    OF    SALE   MORTGAGES   AND   TRUST   DEEDS.       [§  1746. 

from  the  date  of  said  sale,  on  payment  of  the  debt  and  interest 
secured  by  said  deed  of  trust,  and  all  legal  charges  and  costs  in- 
curred in  making  said  sale  up  to  the  time  of  redemption  ;  and  at 
such  sale  the  purchaser  shall  receive  a  certificate  of  purchase  set- 
ting forth  the  property  sold  and  amount  of  purchase  money  re- 
ceived, which  certificate  shall  be  delivered  to  the  trustee  upon 
the  application  for  a  deed  at  the  expiration  of  twelve  months. 
Security  must  be  given  to  the  satisfaction  of  the  circuit  court  for 
the  payment  of  the  interest  to  accrue  after  the  sale,  and  for  all 
damages  and  waste  that  may  be  occasioned  or  permitted  by  the 
party  whose  property  is  sold.^ 

It  is  provided  that  after  the  decease  of  a  person  who  has  given 
a  deed  of  trust  or  mortgage,  with  power  of  sale,  no  sale  shall 
take  place  within  nine  months  after  his  decease.^  Mortgages 
with  powers  of  sale  in  the  mortgagee,  and  sales  made  in  pursu- 
ance of  them,  are  valid  and  binding  upon  the  mortgagors,  and  all 
persons  claiming  under  them,  and  forever  foreclose  all  right  and 
equity  of  redemption  of  the  property  sold.^  Where  a  trustee  in 
any  deed  of  trust  to  secure  the  payment  of  a  debt  or  other  lia- 
bility dies,  resigns,  or  becomes  disabled,  the  court,  on  application 
of  any  person  interested  in  the  debt  stating  the  facts  by  his  affi- 
davit,* makes  an  order  appointing  the  sheritf  of  the  county  trus- 
tee to  execute  the  deed  of  trust  in  place  of  the  original  trustee, 
and  he  thereupon  has  all  the  rights  and  powers  of  such  trustee, 
and  may  sell  and  convey  the  property  according  to  the  terms  of 
the  deed  of  trust  and  with  the  same  effect.^ 

1746.  Montana  Territory.  —  It  is  provided  that  upon  the 
deatii  of  any  person,  who  has  given  a  deed  of  trust  or  mortgage 
witli  power  of  sale,  no  sale  shall  take  place  under  such  deed  or 
mortgage  within  five  months  afterwards.^ 

1  Meyer's  Sup.  1877,  p.  295.  An  appointment  so  made  would  be  void. 

'■«  Wagner's    Stat.    1872,   p.   94.     This  Major  y.  Jackson,  51  Mo.  19G. 

applies  only  to  deeds  made   by  the  dece-  ^  jh.;    Stat.  p.   1.347.     In  such  case,  as 

dent,  and    not    to   those   made   by   prior  the  sheriff  acts  in  his  official  capacity,  ho 

owners.     Lass  v.  Sternberg,   50  Mo.   124.  may  sell  by  deputy.     Tatiim  v.  llolliday, 

"  Deeds  of  trust  as  used  in  tliis  stale  are  of  59   Mo.  422.     See   McKnif^ht  v.   Wimer, 

comparatively  recent  origin."     McKnight  38  Mo.  1.32,  for  a  provision  in  the  deed  to 

V.  Wimer,  38  Mo.  1.32.  same  effect  as  the  statute.     No  notice  to 

8  Wagner's  Stat.  p.  956.  the  grantor  is  necessary.     Martin  v.  Pax- 

*  The  application   and  affidavit   cannot  son,  66  Mo.  260. 

be  made   by   the  maker  of    the  deed.     A  •>  Laws,  1872,  p.  343. 
debtor  cannot  foreclose  his  own  mortgage. 

608 


§^  1747-17;')!.]     statutory  rnovisiONs  relating  to 

1747.  Nebraska.  —  It  wotild  soom  tli;it  powor  of  salo  mort- 
gagt's  ami  ti-iist  dccils  can  bo  forooloscd  only  by  action,  as  in  tlie 
case  of  coninion  mortgages.  But  this  question  (lo(>s  not  appear 
to  liave  been  decided.      Such  niortc:a<res  and  deeds  are  not  usual. ^ 

1748.  Nevada.  —  Power  of  sale  mortgages  and  trust  deeds 
are  not  in  use,  as  foreclosure  must  in  all  cases  be  by  action  and 
judicial  sale.- 

1749.  New  Hampshire.  —  Power  of  sale  mortgages  and  trust 
deeds  are  seldom  used. 

1750.  New  Jersey.  —  Power  of  sale  mortgages  and  trust  deeds 
are  unusual,  but  sales  made  by  virtue  of  the  powers  in  these  in- 
struments are  fully  sustained. ^ 

1751.  New  York.^  —  Mortgages  containing  a  power  to  the 
mortgagee  or  any  other  person  to  sell  the  mortgaged  premises, 
upon  default,  may  be  foreclosed  by  advertisement ;  provided  no 
suit  has  been  instituted  at  law  to  recover  the  debt,  or  if  any  has 
been  instituted  that  it  lias  been  discontinued,  or  the  execution 
upon  the  judgment  rendered  in  such  suit  has  been  returned  un- 
satisfied in  whole  or  in  part ;  and  provided  the  power  of  sale  or 
the  mortgage  containing  it  has  been  duly  recorded.^ 

Notice  is  given  :  1st.  By  publishing  the  same  for  twelve  weeks 
successively,  at  least  once  in  each  week,^  in  a  newspaper  printed 

1  Webb  V.  Hoselton,  4  Neb.  308.  regulations  must  be  followed.     Lawrence 

2  §  1348.  V.  Farmers'  Loan   &  Trust  Co.  13  N.  Y. 

3  Clark  y.  Condit,  18  N.  J.  Eq.  358.  200.     The  proceedings  must  be  liad  in  the 
*  3  R.  S.  187.5,  pp.  847-850.  Fay's  Dig.  name  of  the  actual  holder  of  the  mortgage. 

of  Laws,  1876,  vol.  2,  pp.  65-67.  Cohoes  Co.  v.  Goss,  su])ra. 

These  provisions  do  not  apply  to  mort-  ^  Where  judgment  was  recovered  on  a 

gages  made  upon  real  estate  not  situated  debt  payable  by  instalments,  and  execution 

in  this  state.     So  far  as  concerns  the  ju-  was  issued   on   the   first   instalment   but 

risdiction  of   this  state,  the   parties  may  afterwards  satisfied,  it  was  held  that  there 

agree  in  such  mortgages  upon  such  terms  could  be  no  statute  foreclosure  on   a  sec- 

of  sale  under  the  power  as  they  please,  ond    instalment  for  which   no  execution 

Elliott  V.   Wood,  45  N.  Y.  71  ;    S.  C.  53  had    been     issued.      Grosvenor    v.    Day, 

Barb.  285.  Clarke,  109.     If  the  premises  are  situate 

To  make  a  sale  valid  under  the  statute  in  more  than   one  county,  the  mortgage 

it  must  be  strictly  followed,  as  the  effect  of  must  be  recorded  in  each.    Wells  v.  Wells, 

it  is  to  deprive  the  holder  of  the  equity  of  47  Barb.  416.     The  record  is  for  the  ben- 

his  title.     Sherwood  v.  lieade,  7  Hill,  431  ;  efit  of  the  purchaser  and  a  sale  without  it 

reversing  S.  C.  8  Paige,  633  ;  Ilubhcll  t-.  is  valid.     Wilson  v.  Troup,   2  Cow.  195; 

Sibley,  5  I.,ans.  51  ;  Cohoes  Co.   v.  Goss,  Jackson  v.  Golden,  4  Cow.  266. 

13  Barb.  137.     If  the  power  contain  pro-  ^  A   publication  once  in  each  week  is 

visions   inconsistent  with   statute,   as  by  sufficient,  though  the  first  publication  is 

providing  for  a  private  sale,  the  statute  85  days,  and  the  last  8  days,  before  the 

604 


POWER  OF  SALE  MORTGAGES  AND  TRUST  DEEDS.   [§  1751. 

in  the  county  where  the  premises  are  situated ;  or  if  situated  in 
two  or  more  counties,  in  a  newspaper  printed  in  either  of  them.^ 
2d.  By  affixing  a  copy  of  such  notice,  at  least  twelve  weeks  prior 
to  the  time  therein  specified  for  the  sale,  on  the  outward  door  of 
the  buikhng  where  the  county  courts  are  directed  to  be  held  in 
the  county  where  the  premises  are  situated  ;  ^  or  if  there  be  two 
or  more  of  such  buildings,  then  on  the  outward  door  of  that 
which  shall  be  nearest  to  the  premises.  3d.  By  serving  a  copy 
of  such  notice,  at  least  fourteen  days  prior  to  the  time  therein 
specified  for  the  sale,  upon  the  mortgagor  or  his  personal  repre- 
sentatives,^ and  upon  the  subsequent  grantees  and  mortgagees 
of  the  premises  whose  conveyance  and  mortgage  shall  be  upon 
record  at  the  time  of  the  first  publication  of  the  notice,*  and  upon 
all  persons  having  a  lien,^  by  or  under  a  judgment  or  decree 
upon  the  mortgage  premises,  subsequent  to  said  mortgage,  person- 
ally or  by  leaving  the  same  at  their  dwelling-houses  in  charge  of 
some  person  of  suitable  age,  or  by  serving  a  copy  of   such  notice 

sale.      Howard   t'.    Hatch,  29  Barb.  297.  34   Barb.   319;    Low  v.  Purdy,    2  Lans. 

If  the  first  pul)licatiou  be  defective,  there  422. 

may  be  a  republication  for  the  required  *  An  assignee  of  a  junior  niortji:a{je  is 

time.     Cole  M.  MotHtt,  20  Barb.  18.     The  entitled  to  notice.    Winslow  i-.  McCall,32 

publication  is  a  good  service  upon  an  un-  Barb.  241  ;  Wetmore  v.  Roberts,  10  How. 

known  party  though  an  infant.      Wheeler  Pr.  51. 

V.  Scully,  50  N.  y.  667.  A  jiarty  in  interest  who  is  not  served 

1  In  New  York  city,  under  authority  of  with  notice  is  not  affected  or   barred  by 

an  act  passed  in  1874,  c.  656,  the  Daily  the  sale.     Wetmore  v.  Roberts,  10  How. 

Register  has  been  designated  by  the  judges  Pr.  51;    Root  v.  Wheeler,  12  Abb.  Pr. 

of    the  courts  of    record  as  the  paper  in  294  ;  Northrup  v.  Wheeler,  43  How.  Pr. 

which  legal  notices  are  to  be  published.  122. 

"^  K  the  land  lies  in  several  counties,  the  If  the  owner  of  the   equity  of  redcmp- 

notice    must   be    posted    in    each   county,  tion    bo    not    .served    witii    notice,   (/uare, 

Wells  V.  Weils,  47  Barb.  410.  wlietlier  the  foreclosure  is  not  a  nullity  as 

'  Notice  should  be  given  to  theexccutor  to  all  parlies.    Micklcs  v.  Dillaye,  15  Hun 

or  administrator,  not  to  the  heirs  or  de-  (N.  V.),  296. 

visees.      Anderson    v.    Austen,    34    Barb.  ''  'J'lio  lien  of  a  judgment  perfected  after 

319  ;  Low  V.  Purdy,  2  Lans.  422.  the  first  j)ul)iication  of  notice,  and    before 

In  case  the  mortgage  was  executed  by  sale,  is  not  cut  off  unless  notice  is  served 

husband  and  wife,  the  notice  of  sale  after  upon  the  judgment  creditor  ius  here  pro- 

thc  death  of  the  husban<l  must  be  served  vided.     GrofF  v.  Morehouse,  51  N.  Y.  503. 

on    the   wife    as    surviving    mortgagor;  See,  also,  Klock  v.  Cronkhitc,  1  Hill,  107; 

though  not  necessary  to  bar  her  dower  in  Winslow  r.  McC-all,  32  Bar!).  241.  Though 

a   purchase   money  mortgage.      King   o.  one  judgment  creditor  has  no  iioiice,  the 

Duntz,  11  Barb.  191  ;  and  sec  Brackett  v.  sale  is  not  therefore  invalidated  as  to  oth- 

Baum,  50  N.   Y.  8.     "Personal  reprcsen-  ers  who  were  served  with  notice.    Hubbell 

tatives"  means  executors  or  administra-  v.  Sibley,  5  I^ans.  51. 
tors,  and  not  heirs.     Anderson  v.  Austin, 

605 


§  1751.] 


STATUTORY   PROVISIONS   KKLATING    TO 


upon  said  pers(Mis,  at  least  t\venly-cij;lit  days  prior  to  the  time 
therein  specified  lor  tiie  sale,  by  depositing  the  same  in  the  post- 
office,^  proj)t'rly  folded  anil  directed  to  the  said  persons  at  their 
respective  places  of  residence."-^  The  notice  must  specify  '^  the 
names  of  the  mortgagor  and  mortgagee,  and  the  assignee  of  the 
mortgage,  if  any  ;  the  date  of  the  mortgage  and  where  recorded,'' 
or  where  the  power  of  sale  is  registei-ed  ;  the  amount  claimed 
to  be  due  thereon,  at  the  date  of  the  first  publication;^  and  a 
description  of  the  mortgaged  premises,  conforming  substantially 
with  that  contained  in  the  mortgage.^ 

The  sale  may  be  postponed  from  time  to  time,  by  inserting  a 
notice  of  such  postponement,  as  soon  as  practicable,  in  the  news- 
paper in  which  the  original  advertisement  was  published,  and  con- 


1  Tlie  notice  may  be  mailed  at  any 
place  ill  the  state.  Stanton  v.  Kline,  11 
N.  Y.  196;  Bunce  v.  Reed,  16  Barb.  347. 
The  twenty-eight  days  are  to  be  counted 
from  the  time  of  deposit  in  the  post-office, 
without  reference  to  the  mailing.  Hornby 
V.  Cramer,  12  How.  Pr.  490.  A  mistake 
in  addressing  a  party  at  a  place  other  than 
his  residence  renders  the  sale  void  as  to 
him.     Robinson  v.  Ryan,  25  N.  Y.  329. 

2  A  notice  addressed  to  A.  B.,  adminis- 
trator, is  sufficient,  without  naming  the 
estate  of  the  deceased.  George  v.  Arthur, 
2  Hun,  406  ;  S.  C.  4  T.  &  C.  635.  If  it 
does  not  appear,  except  on  information  and 
belief,  that  the  mortgagors  resided  at  the 
place  to  which  the  notices  were  addressed 
and  mailed,  the  proceedings  are  defective. 
Mowry  v.  Sanborn,  7  Hun  (N.  Y.),  380. 

The  three  modes  of  giving  notice  must 
be  used  together.  If  one  of  them  be  omit- 
ted the  foreclosure  is  void.  Cole  v.  Mof- 
fitt,  20  Barb.  18;  Stanton  ;;.  Kline,  16 
Barb.  9;  King  v.  Duntz,  11  Barb.  191  ; 
Van  Slyke  v.  Shelden,  9  Barb.  278 ;  Low 
V.  Pur<ly,  2  Lans.  422  ;  Mowry  v.  San- 
born, 62  Barb.  223. 

'^  It  need  not  state  that  the  mortgage 
will  be  foreclo.sed.  Leet  v.  McMaster,  51 
Barb.  236 ;  or  that  the  sale  is  for  the  pur- 
pose of  foreclosure.  Judd  v.  O'Brien,  21 
N.  Y.  186. 

606 


*  The  place  of  record  is  sufficiently 
specified  by  stating  the  clerk's  office  and 
the  date  of  record,  though  the  number  of 
the  book  in  which  it  is  recorded  is  erro- 
neously stated.  5  Wait's  Practice,  253  ; 
Judd  V.  O'Brien,  21  N.  Y.  186,  188. 

^  A  mistake  as  to  the  amount  due  does 
not  invalidate  the  sale.  Klock  v.  Cronk- 
hite,  1  Hill,  107  ;  Jencks  v.  Alexander,  11 
Paige,  619  ;  Bunce  v.  Reed,  16  Barb.  347  ; 
Mowry  v.  Sanborn,  62  Barb.  223. 

If  only  a  part  of  the  debt  is  due,  it  is 
well  to  state  both  the  amount  due  and  the 
whole  amount  also.  Jencks  v.  Alexander, 
11  Paige,  619,  626. 

•^  The  statute  does  not  require  any  ref- 
erence in  the  notice  of  sale  to  incum- 
brances. If  matters  not  called  for  by  the 
statute  are  stated,  which  are  calculated 
to  mislead  the  public  and  prevent  persons 
from  bidding,  the  sale  will  be  void ;  but 
if  inserted  by  mistake  merely,  and  a  cor- 
rection is  published  with  the  notice  before 
it  could  be  ))resumed  that  persons  wishing 
to  bid  would  be  misled,  the  error  would 
not  vitiate  the  sale.  Such  an  error  was 
the  statement  of  a  prior  incumbrance  at 
twice  its  actual  amount.  Hubbell  v.  Sib- 
ley, 5  Lans.  (N.  Y.)  51  ;  and  see  Klock 
V.  Cronkhite,  1  Hill,  107  ;  Burnet  v.  Den- 
niston,  5  Johns.  Ch.  35,  42.  For  form  of 
notice,  see  5  Wait's  Prac.  254., 


POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.       [§  1751. 

tinuing  such  publication  until  the  time  to  which  the  same  is  post- 
poned.^ 

The  sale  must  be  at  public  auction,^  in  the  daytime,  in  the 
county  where  the  mortgaged  premises  or  some  part  of  them  are 
situated.  If  the  premises  consist  of  distinct  farms,  tracts,  or  lots, 
they  must  be  sold  separately,  and  no  more  sold  than  is  necessary 
to  satisfy  the  amount  due  on  the  mortgage  with  interest  and 
costs.3 

The  mortgagee,  his  assignor,  his  or  their  legal  representatives, 
may  fairly  and  in  good  faith  purchase  the  premises  or  any  part 
thereof  at  such  sale. 

The  sale  pursuant  to  the  power,  and  properly  conducted,  is 
equivalent  to  a  foreclosure  and  sale  under  decree  of  a  court  of 
equity,  so  far  as  to  be  a  bar  of  the  equity  of  redemption  of  the 
mortgagor,  and  of  all  persons  claiming  under  him  ;  *  and  also  of 
any  person  having  a  lien  by  judgment  subsequent  to  the  mort- 
gage, who  has  been  served  with  notice  of  the  sale. 

Affidavit  of  the  fact  of  the  sale  pursuant  to  the  notice  may  be 
made  b}'  the  auctioneer,  stating  the  time  and  place  of  sale,  the 
sum  bid,  and  the  name  of  the  purchaser,  and  annexed  to  a  pi'inted 
copy  of  the  notice  of  sale.  An  affidavit  of  the  publication  of  the 
notice  may  be  made  by  the  printer  of  the  newspaper,"  or  by  his 
foreman  or  principal  clerk  ;  and  an  affidavit  of  the  affixing  of  a 
copy  of  the  notice  on  the  door  of  the  court-house  may  be  made  by 
the  pei-son  who  affixed  the  notice,  or  by  any  person  who  saw  such 
notice  so  posted,  during  the  time  required  ;^  and  an  affidavit  by 
the  clerk  of  the  county  court  of  the  affixing  of  a  copy  of  tlie  notice 
in  a  book  provided  for  the  purpose,  or  by  any  person  who  saw  the 

'  It  is  not  necessary  to  serve  notice  of  sale  under  the  power  is  a  bar  to  the  right, 

postponement ;  tlie  publication  is  sufficient.  It  may  be  regarded  as  claiming  under  him. 

Westgate  v.  Handlin,  7  How.  I'r.  372.  Brackett  v.  Baum,  .50  N.  Y.  8.     Notice 

2  A  private  sale,  though  expressly  au-  must  be  served  upon  her.     Service  upon 

thorized  by  the  mortgage,  would  not  bar  her  husband  alone  is  not  enough.     North- 

the  equity  of   redemption.     Lawrence  v.  rup  v.  Wheeler,  43  How.  Pr.  122. 

Farmers'  Loan  &  Trust  Co.  13  N.  Y.  200,  ^  Or  publisher.   Buncei'.  Reed,  IG  Barb. 

642.  347. 

'  See  Cox  V.  Wheeler,  7  Paige,  248.  "^  A  notice  once  affixed  is  presumed  to 

*  Demarest  v.  Wynkoop,  3  Johns.  Ch.  remain,  and  the  affidavit  may  be  made  by 

129;  Mowry  v.   Sanborn,  fi2  Barb.  223;  one  who  saw  it  posted   twelve  weeks  ])rior 

Klock  V.  Cronkhite,  1  Hill,  107.     A  mort-  to  the  sale.     It  is  not  necessary  that  he 

gage  for  the   jturchase   money  not   being  should  have  scon  it  each  week.     Hornby 

subject  to  the   dower  right  of  the  mort-  v.  Cramer,  12  How.  Pr.  490. 
gagor's  wife,  though  not  a  j)Mny  to  it,  a 

607 


§  1TA2.] 


STATUTOKY    PROVISIONS    KF.LATING    TO 


notice  so  ailixrd  iluriiig  the  lime  required,  :ind  iin  airuliivit  of  the 
service  of  the  notice  on  the  persons  entitled  to  service,  may  be 
made  by  the  persons  who  served  the  same.^  The  afilidavits  prop- 
erly taken  and  recorded  are  pi'esiiinptive  evidence  of  the  facts 
therein  contained.'-^ 

When  the  premises  or  any  part  of  tiiem  are  purchased  by  the 
mortgagee,  his  legal  representatives,  or  his  or  their  assigns,  or  by 
any  other  person  or  persons  whatsoever,  the  allidavits  are  evidence 
of  the  sale,  and  of  the  foreclosure  of  the  equity  of  redemption, 
without  any  conveyance  being  executed,  in  the  same  manner  and 
with  the  like  eil'ect  as  a  conveyance  executed  by  a  mortgagee 
upon  such  sale  to  a  third  person.^ 

Any  surplus  arising  from  the  sale  is  subject  to  the  jurisdiction 
and  order  of  the  Supreme  Court,  which  may  dispose  of  it  accord- 
ing to  the  rights  of  those  interested.* 

1752.  North  Carolina.  —  Power  of  sale  mortgages  "  have 
long  been  in  general  use  unquestioned."  ^  Deeds  of  trust  are  also 
in  use. 


1  An  affidavit  on  information  and  belief 
as  to  the  place  of  residence  of  the  mort- 
gagors, to  whom  notice  was  mailed,  is 
suflScicnt,  in  the  absence  of  proof  that  they 
did  not  receive  the  notices,  or  that  they 
resided  elsewhere.  Mowry  v.  Sanborn, 
62  Barb.  223.  The  holder  of  the  mort- 
gage may  give  the  notice,  though  he  be 
the  purchaser.  Hubbell  v.  Sibley,  5  Lans. 
51. 

2  The  affidavits  are  not  concIu>ive ; 
they  may  be  disproved.  Bunce  v.  Reed, 
16  Barb.  347  ;  Sherman  v.  Willett,  42  N. 
Y.  146  ;  Mowry  v.  Sanborn,  62  Barb.  223 ; 
S.  C.  72  N.  Y.  534. 

For  form  of  affidavits  see  5  Wait's  Prac. 
258,  261.  The  recording  of  the  affidavits 
is  not  essential  to  the  passing  of  title. 
Howard  v.  Hatch,  29  Barb.  297  ;  Frink  v. 
Thompson,  4  Lans.  489  ;  overruling  the 
dictum  in  Cohoes  Co.  v.  Goss,  13  Barb. 
137  ;  also  dictum  in  Tutbill  v.  Tracy,  31 
N.  Y.  157.  See,  also,  Bryan  v.  Butts,  27 
Barb.  503.  But  the  affidavits  must  show 
a  full  compliance  with  the  statute,  and  the 
omission  of  a  fact  which  the  statute  re- 
quires to  be  shown  by  affidavit  cannot  be 
supplied  by  amendment  of  it,  though  per- 

608 


haps  new  aflBdavits  might  be  filed.  Dwight 
V.  Phillips,  48  Barb.  116. 

8  Walsh  V.  Colden,  4  Cow.  266 ;  Slee  v. 
Manhattan  Co.  1  Paige,  48. 

The  affidavits  in  such  case  stand  in  place 
of  a  deed,  and  are  conclusive  as  again.st  the 
mortgagor  and  those  claimitig  under  him. 
Arnot  V.  McClure,  4  Denio,  41  ;  Cohoes 
Co.  V.  Goss,  13  Barb.  144;  Layman  v. 
Whiting,  20  Barb.  559 ;  Mowry  u.  San- 
born, 68  N.  Y.  153. 

*  The  mortgagee  himself  is  not  respon- 
sible to  subsequent  lien  creditors  for  a  sur- 
plus left  in  the  hands  of  a  purchaser.  Rus- 
sell V.  Duflon,  4  Lans.  399.  For  proceed- 
ings in  relation  to  surplus,  see  5  Wait's 
Prac.  264. 

But  if  the  mortgagee  receive  the  surplus 
he  is  liable  to  subsequent  lien  holders ; 
though  not  for  interest  on  it  until  demand. 
Russell  V.  Duflon,  supra;  Bevier  v.  Schoon- 
maker,  29  How.  Pr.  411. 

5  Ilyman  v.  Devereux,  63  N.  C.  624, 
628;  Blount  v.  Carroway,  67  N.  C.  396; 
Paschal  v.  Harris,  74  N.  C  335  ;  Olcott 
V.  Bynum,  17  Wall.  44.  A  "  stay  law," 
providing  that  no  property  should  be  sold 
under  a  deed  of  trust  or  mortgage  until  the 


POWER   OF   SALE   MORTGAGES   AND   TRUST   DEEDS.       [§§  1753-1758. 

1753.  Ohio.  —  Power  of  sale  mortgages  and  trust  deeds  are 
seldom  used. 

1754.  Oregon.  —  Power  of  sale  mortgages  and  trust  deeds  are 
seldom  used. 

1755.  Pennsylvania.  —  Power  of  sale  mortgages  and  trust 
deeds  were  seldom  used  until  quite  recently,  but  have  now  become 
a  common  mode  of  creating  marketable  securities  on  which  to 
raise  loans  for  corporations.* 

1756.  Rhode  Island.  —  Mortgages  generally  contain  a  power 
of  sale.  Trust  deeds  being  less  effectual  are  not  in  common  use 
as  security  for  loans. 

At  any  sale  by  public  auction  made  according  to  the  provisions 
of  any  mortgage,  or  other  conveyance  by  way  of-  mortgage,  or  of 
any  power  of  sale  contained  in  it  or  annexed  to  it,  the  mortgagee, 
his  heirs,  or  assigns,  or  any  person  for  him,  may  fairly  and  in  good 
faith  bid  for  and  purchase  the  property  or  any  part  of  it,  in  the 
same  manner  as  other  persons  may  bid  for  and  purchase  it;  pro- 
vided, that  notice  in  writing  of  his  intention  to  bid  shall  be  given 
to  the  mortgagor,  or  left  at  his  last  and  usual  place  of  abode, 
twenty  days  prior  to  the  time  of  sale  at  which  he  proposes  to  bid 
as  mortgagee,  and  that  the  proper  evidence  that  such  notice  has 
been  given  shall  be  in  the  possession  of  the  auctioneer  at  the  time 
the  sale  takes  place.^ 

1757.  South  Carolina.  —  Trust  deeds  seem  to  be  in  use.  Power 
of  sale  mortgages  tiiough  valid  are  not  in  common  use.^ 

1758.  Tennessee.  —  Power  of  sale  mortgages  and  trust  deeds 
are  in  use.  Real  estate  sold  under  them  by  virtue  of  the  power 
is  subject  to  redemption  at  any  time  within  two  years  in  the  same 
manner  as  when  sales  are  made  under  judicial  decree,*  unless  the 
right  of  redemption  is  expressly  waived  or  surrendered  in  the 
deed  or  mortgage.''  But  if  the  mortgagee  does  not  exercise  a 
power  of  sale  free  from  the  equity  of  redemption  contained  in  a 

debts  secured  in  the  deeds  are  reduced  to  tow,  Sup.  Ct.  of  Pa.  (1877)  5  N.  Y.  Week- 

judKiiieuts,  was  licld  uncoRsiiiutional,  as  ly  li.  204. 

not  only  impairiui,'  the  obligation  of  a  con-  '^  (ien.  Stat,  of  K.  1.  c.  IGf.,  §  15. 

tract,  but  alteriu),'  it  by  addinjj  a  condi-  •'  Mitchell  v.  ]}o;,'an,   11    Rich.  086,  per 

tion.    Latham  v.  Whitehurst,  6'J  N.  C.  33.  Witlierw,  J.:  "  Notfuniiliar  in  ourobserva- 

'  Bra<lley  v.  Chester  Valley  li.  U.  Co.  tion." 

36  Pa.  St.  141,  l.'jl  ;  Corpman  v.  Baccas-  «  See  §  1368. 

^  Code,  1858,  §S  2124,  212.5. 

vou  11.                                  3'J  (JOli 


§§  1759-1  Tr» -2.]       STATUTORY    PROVISIONS   RKLATINU   TO 

mortgage,  ami  tlie  sale  he  made  under  a  decree  of  court,  the 
right  of  redemption  will  still  exist.  The  statute  cutting  oil'  the 
equity  of  redemption  must  be  strictly  j)ursued.i 

1759.  Texas,  —  Trust  deeds  are  in  common  use,  and  power  of 
sale  mortgiiges  are  also  sometimes  used.^ 

1760.  Vermont.  —  A  power  of  sale  in  a  mortgage  is  unusual 
if  not  unknown,  and  there  is  no  statute  regulating  its  exercise.^ 
Neither  are  trust  deeds  in  use  as  a  mode  of  securing  debts. 

1761.  Virginia.  —  Trust  deeds  are  used  to  the  exclusion,  al- 
most, of  all  other  forms  of  security  ujion  real  estate.  It  is  pro- 
vided that  the  trustee  in  such  deed,"^  except  so  far  as  may  be 
therein  otherwise  provided,  shall,  whenever  required  by  any  cred- 
itor secured,  or  any  surety  indemnified  by  the  deed,  or  the  per- 
sonal representative  of  any  such  creditor  or  surety,  after  the  debt 
due  to  such  creditor,  or  for  which  such  surety  may  be  liable,  shall 
have  become  payable  and  default  shall  have  been  made  in  the 
payment  thereof,  or  any  part  thereof,  by  the  grantor,  sell  the 
property  conveyed  by  the  deed,  or  so  much  thereof  as  may  be 
necessary,  at  public  auction,  for  cash,  having  first  given  reason- 
able notice  of  the  time  and  place  of  sale,  and  shall  apply  the  pro- 
ceeds of  sale,  first  to  the  payment  of  expenses  attending  the  exe- 
cution of  the  trust,  including  a  commission  to  the  trustee  of  five 
per  cent,  on  the  first  three  hundred  dollars,  and  two  per  cent,  on 
the  residue  of  the  proceeds,  and  then  pro  rata  (or  in  the  order  of 
priority,  if  any,  prescribed  by  the  deed)  to  the  payment  of  the 
debts  secured  and  the  indemnity  of  the  sureties  indemnified  by 
the  deed,  and  shall  pay  the  surplus,  if  any,  to  the  grantor,  his 
heirs,  personal  representatives,  or  assigns.^ 

1762.  West  Virginia.  —  The  form  of  trust  deed  and  the  duties 

1  Frierson  v.  Blanton,  57  Tenn.  272.  the  otlier  part,  witnesseth :  that  the  said 

2  Robertson  v.  Paul,  16  Tex.  472;  Mor-  (the  grantor)  doth  (or  do)  grant 
risen  y.  Bean,  1 5  Tex.  267  ;  Buchanan  v.  unto  the  said  (the  trustee)  the  fol- 
Monroe,  22  Tex.  537  ;  McLane  w.  Paschal,  lowing  property  (here  describe  it).  In 
47  Tex.  365.    See  §  1792.  trust  to  secure  (here  describe  the  debts  to 

8  Wing  I'.  Cooper,  37  Vt.  169.  be  secured  or  the  sureties  to  be  indemni- 
*  "A  deed  of  trust  to  secure  debts  or  tied,  and  insert  covenants  or  other  provi- 
indemnify  sureties  may  be  in  the  follow-  sions  the  parties  may  agree  upon).  Wil- 
ing form,  or  to  the  same  effect :  —  ness  the  following  signatures  and  seals, 
"' This  deed,  made  the  day  of  ,  (or  signature  and  seal).'"  Code,  1873,  c. 
in  the  year  ,  between  (the  grantor)  113,  §  5. 
of  the  one  part,  and             (the  trustee)  of        ^  Code,  1873,  c.  113,  §  6. 

610 


POWER   OF   SALE  MORTGAGES  AND   TRUST  DEEDS.      [§  1763. 

and  compensation  of  the  trustee  under  it  are  the  same  as  above 
prescribed  by  the  Code  of  Virginia.^ 

1763.  Wisconsin.^  —  A  mortgage  containing  a  power  of  sale 
may  upon  default  be  foreclosed  b}'  advertisement ;  provided  no 
action  has  been  instituted  at  law  to  recover  the  debt,  or  if  insti- 
tuted that  it  has  been  discontinued,  or  that  an  execution  upon  the 
judgment  has  been  returned  unsatisfied  in  whole  or  in  part  ;  and 
provided  the  mortgage  containing  such  power  has  been  duly  re- 
corded, and  that  all  assignments  of  it  have  been  recorded.  If  the 
mortgage  be  payable  by  instalments,  each  instalment  after  the 
first  is  deemed  a  separate  mortgage  ;  and  may  be  foreclosed  for 
each  instalment  as  if  a  separate  mortgage  were  given  for  each. 

Notice  is  given  by  publishing  the  same  for  six  successive  weeks, 
at  least  once  a  week,  in  a  newspaper  printed  in  the  county  where 
the  premises  or  some  part  of  them  are  situated,  if  there  be  one  ; 
otherwise  in  a  newspaper  published  in  an  adjoining  county,  if 
there  be  one  ;  but  if  not,  then  in  a  paper  published  at  the  seat  of 
government.  The  notice  must  specify  the  names  of  the  mort- 
gagor and  of  the  mortgagee,  and  of  the  assignee  if  any  ;  the 
date  of  the  mortgage  and  when  recorded  ;  the  amount  claimed 
to  be  due  at  the  date  of  the  notice  ;  a  description  of  the  prem- 
ises substantially  as  in  the  mortgage  ;  and  the  time  and  place  of 
sale. 

The  sale  must  be  at  public  auction,  between  the  hour  of  nine 
o'clock  in  the  forenoon  and  the  setting  of  the  sun,  in  the  county 
in  which  the  premises  or  some  part  of  them  are  situated,  and  must 
be  made  by  the  person  appointed  for  that  purpose  in  the  mort- 
gage, or  by  the  sheriff  or  his  deputy,  to  the  highest  bidder.  The 
sale  may  be  postponed  from  time  to  time,  by  inserting  a  notice  of 
such  postponement,  as  soon  as  practicable,  in  the  newspaper  in 
which  the  original  advertisement  was  published,  and  continuing 
such  publication  to  the  time  of  sale.  If  the  premises  consist  of 
distinct  farms  or  lots,  they  must  be  sold  separately ;  and  no  more 
shall  be  sold  than  may  be  necessary  to  satisfy  the  amount  due, 
with  interest  and  costs. 

The  mortgagee,  his  assigns,  or  his  or  their  representatives,  may 
fairly,  and  in  good  faith,  purchase  the  premises,  or  any  part 
thereof,  at  the  sale. 

»  Code,    1870,    c.     72,    §§    5-10,     and         ^  k.  g.  1878,  c.  152,  §§  3523-3543. 
amendments,  1870,  c.  51. 

611 


§  1763.]  STATUTORY   PROVISIONS    KKLATING    TO 

The  ollicor  or  dUum-  j)ins()n  maUiu}^  the  siilo,  gives  the  purchaser 
a  certificate  in  writing  under  seal,  setting  forth  a  description  of 
each  tract  sold,  the  sum  paid  therefor,  and  the  time  when  the 
purchaser  will  be  entitled  to  a  deed,  unless  redeemed  ;  and  within 
ten  days  files  in  the  ollice  where  the  deed  is  recorded  a  duplicate 
of  such  certificate.  The  premises  may  be  redeemed  within  one 
year  after  such  sale,  on  payment  of  the  sum  bid,  with  interest  at 
the  rate  of  ten  per  centum  per  annum  from  the  time  of  sale  ;  but 
the  mortgagor  may  retain  full  possession,  until  the  title  vests  ab- 
solutely in  the  purchaser.  If  not  redeemed,  the  officer  or  some 
person  appointed  by  the  court  for  the  purpose  executes  a  deed  of 
the  premises  to  the  purchaser,  or  to  the  assignee  of  the  certificate. 

Any  surplus  remaining  after  satisfying  the  mortgage  is  paid  to 
the  mortgagor  or  his  assigns. 

The  evidence  of  sale  may  be  perpetuated  by  an  affidavit  of  the 
publication  of  the  notice  to  be  made  by  the  printer,  or  by  some 
person  in  his  employ  knowing  the  facts,  and  an  affidavit  of  the 
fact  of  the  sale  to  be  made  by  the  auctioneer,  stating  the  time 
and  place  of  sale,  the  sum  bid,  and  the  name  of  the  purchaser  ; 
and  such  affidavits,  when  recorded,  are  presumptive  evidence  of 
the  facts.  The  record  of  the  affidavits,  and  of  the  deeds  executed, 
pass  the  title,  and  the  conveyance  is  a  bar  of  all  equity  of  redemp- 
tion ;  but  no  title  accruing  prior  to  the  execution  of  the  mortgage 
is  affected. 

A  subsequent  mortgagee  is  entitled  to  the  same  privilege  of  re- 
demption that  the  mortgagor  might  have  had,  or  may  satisfy  the 
prior  mortgage,  and  thereby  acquire  all  the  rights  of  the  prior 
mortgagee. 

When  the  premises,  or  any  part  of  them,  are  purchased  by  the 
mortgagee,  his  representatives,  or  his  or  their  assigns,  the  affida- 
vits of  publication,  and  of  the  circumstances  of  sale,  are  evidence 
of  the  sale,  and  of  the  foreclosure  of  the  equity  of  redemption, 
without  any  conveyance  being  executed,  in  the  same  manner,  and 
with  like  effect,  as  a  conveyance  executed  by  a  mortgagee  upon  a 
sale  to  a  third  person. 

When  notice  of  the  sale  is  published  in  other  than  the  county 
in  which  the  premises  are  situated,  a  copy  of  such  notice  must  be 
served  at  least  four  weeks  before  the  time  of  sale  on  the  person 
in  possession  of  the  premises,  in  all  cases  where  the  same  are  occu- 
pied ;  and  where  they  are  not  occupied,  then  upon  the  mortgagor, 
612 


POWER    OF   SALE   MORTGAGES   AND   TRUST   DEEDS.       [§  1763. 

his  heirs,  or  personal  representatives,  if  he  or  they  reside  in  the 
county  where  such  premises  lie.  Proof  of  the  service  of  such 
notice  may  be  made,  certified,  and  recorded  in  the  same  manner, 
and  with  the  like  effect,  as  proof  of  the  publication  of  a  notice 
of  sale  under  a  mortgage. 

613 


CHAPTER  XL. 


POWER  OF  SALE  MORTGAGES  AND  TRUST  DEEDS. 


The  niiturc  nnd  use  of   powers  of 

sale,  17G4-1772. 
The  power  of  sale  is  a  cumulative 

remedy,  1773-1776. 
Construction  of  power,  1777-1791. 
Revocation   or    suspension   of    the 

power,  1792-1800. 
When  the  exercise   of    the   power 

may  be  enjoined,  1801-1820. 
Personal  notice  of  sale,  1821-1826. 
VII,  Publication  of  notice,  1827-1838. 
VIII.    What  the  notice  should   contain, 

1839-1856. 


II. 

III. 
IV. 


VI. 


IX.    Sale  in  parcels,  1857-1860. 
X.    Conduct  of    sale,    terms,  and  ad- 
journment, 1861-1875. 
XI.    Who  may  purchase  at  sale  under 

power,  1876-1888. 
XII.    The  deed  and  title,  1889-1903. 

XIII.  The  affidavit,  1904,  1905. 

XIV.  Setting    aside    and   waiving   sale, 

1906-1922. 
XV.   Costs  and  expenses,  1923-1926. 
XVI.   The  surplus,  1927-1940. 


1.   The  Nature  and   Use  of  Poivers  of  Sale. 

1764.  In  general.  —  The  delay  and  expense  incident  to  a  fore- 
clo-suve  and  sale  in  equity  liave  brought  power  of  sale  mortgages 
and  trust  deeds  into  general  favor  both  in  England  and  America ; 
and  although  their  general  use  is  now  confined  to  a  part  only  of 
our  States,  the  same  influences  which  have  already  led  to  their 
partial  adoption  and  use  are  likely  to  lead  to  their  general  use 
everywhere  at  an  early  day.  It  is  true  that  recent  codes  and  stat- 
utes have  done  something  to  simplify  the  remedy  by  bill  in 
equity  ;  but  at  best  the  process  of  foreclosure  by  suit  is  cumber- 
some and  expensive  as  compared  with  the  remedy  afforded  by  a 
power  of  sale.  PreUminary  to  a  bill  in  equity,  or  to  a  petition  or 
suit  authorized  by  codes  which  adopt  a  bill  in  equity  as  the  basis 
of  the  proceeding,  is  an  investigation  to  ascertain  who  have  be- 
come interested  in  the  property  since  the  taking  of  the  mortgage. 
All  such  parties,  sometimes  quite  numerous,  must  be  made  parties 
to  the  suit  and  must  be  served  with  process,  else  the  foreclosure 
will  not  be  complete.  The  decree  of  sale  may  be  rendered  only 
after  a  long  delay.  The  sale  is  made  through  a  sherilf  or  officer 
of  the  court,  who  must  report  his  proceedings  to  the  court.  Orders 
614 


THE   NATURE   AND    USE   OF   POWERS   OF   SALE.         [§  1765. 

must  be  obtained  for  the  confirmation  of  the  sale,  and  perhaps  for 
the  distribution  of  the  proceeds  of  it.  There  may  also  be  attend- 
ant references  to  ascertain  the  amount  of  the  mortgage  debt,  or  to 
determine  whether  the  whole  property  shall  be  sold  together  or 
in  separate  parcels ;  or  to  determine  in  what  order  different  par- 
cels shall  be  sold  in  consequence  of  the  equities  of  subsequent  pur- 
chasers ;  or  after  the  sale  is  made  to  determine  whether  the  title 
is  such  that  the  sale  can  be  enforced  against  the  purchaser.  It  is 
true  that  all  these  proceedings  are  designed  for  the  protection  of 
the  mortgagor  and  others  who  may  be  interested  in  the  property ; 
but  while  such  protection  is  occasionally  not  without  its  use,  in 
almost  all  cases  the  parties  interested  in  the  property  are  equally 
well  protected  by  the  remedy  out  of  court  afforded  by  a  power  of 
sale,  and,  as  will  be  presently  noticed,  when  protection  is  needed 
in  exceptional  cases  the  courts  can  be  effectually  appealed  to. 

A  power  of  sale,  whether  vested  in  the  creditor  himself  or  in 
a  trustee,  affords  a  prompt  and  effectual  security.  Although  it 
may  press  harder  upon  the  debtor  in  point  of  time,  it  is  not  with- 
out its  advantages  to  him.  The  delay  and  expense  incident  to  a 
foreclosure  suit  he  is  obliged  to  pay  for  in  some  way  ;  and  it  is 
generally  in  the  way  of  paying  a  higher  rate  of  interest  for  the 
loan.  It  is  probably  safe  to  say  that  in  its  practical  operation  the 
power  of  sale  is  not  used  to  oppress  or  injure  the  debtor  more 
frequently  than  is  the  process  of  foreclosure  by  suit.  There  is 
undoubtedly  some  prejudice  against  this  form  of  security  still 
remaining.  This  is  more  especially  the  case  where  it  is  little 
used,  and  in  those  parts  of  the  country  where  capital  is  scarce  and 
the  difficulty  of  obtaining  large  sums  of  money  without  delay  is  a 
serious  one.  But  both  the  fancied  and  real  objections  to  powers 
of  sale  in  mortgages  and  trust  deeds  are  likely  soon  to  give  way 
under  the  real  advantages  they  afford  to  both  the  debtor  and  cred- 
itor ;  and  their  general  adoption,  to  the  exclusion  of  other  forms 
of  security  upon  real  property,  may  be  looked  for  at  an  early  day. 

1765.  In  some  of  the  early  cases  both  in  England  and 
America,  the  validity  of  powers  of  sale  in  mortgages  was  much 
questioned.  The  case  of  Croft  v.  Powell  ^  was  for  a  considerable 
time  considered  as  an  authority  against  mortgages  of  this  descrip- 
tion, although  their  validity  was  not  involved  in  the  decision. 
This  was  a  mortgage  made  by  a  deed  and  separate  defeasance, 
1  2Comyn,  603  (1738). 

615 


§  17G5.]     in)\vKK  ov  sale  mortgagks  and  tuust  ni;Kns. 

which  pntvidi'il  that  it"  tho  loan  Mas  not  p;ii(l  witliin  (he  time 
agreed,  thfii  the  mortgagee  should  mortgage  or  absolutely  .sell  the 
same  lands  free  from  redemption,  and  out  of  the  money  raised  by 
such  mortgage  or  sale  pay  the  loan  and  interest,  and  be  account- 
able for  the  overplus  to  the  mortgagor  or  his  heirs.  The  money 
not  being  paid  at  the  time,  the  mortgagee  agreed  to  convey  the 
estate  to  a  third  jierson,  and  in  the  agreement  and  conveyance  an 
exception  was  made,  and  the  defeasance  was  mentioned.  For  this 
reason  it  was  considered  that  it  was  not  the  intention  of  the  mort- 
crairee  to  rrive  the  purchaser  an  absolute  and  indefeasible  estate, 
for  it  was  not  conveyed  to  him  absolutely  and  free  from  the  equity 
of  redemption,  but  subject  to  the  defeasance. 

When  Mr.  Powell  wrote  his  Treatise  on  Mortgages  ^  he  con- 
sidered the  validity  of  powers  of  sale  "  of  too  doubtful  a  complex- 
ion to  be  relied  upon  as  the  source  of  an  irredeemable  title." 
Even  so  late  as  1825,  although  such  powers  had  been  sustained 
in  the  few  cases  in  which  they  had  been  the  subject  of  adjudica- 
tions during  the  early  part  of  the  jjresent  century,  Lord  Eldon, 
then  Chancellor  of  England,  while  not  denying  the  validity  of  a 
mortgage  in  this  form,  strongly  objected  to  it,  saying  :  "  Here  the 
mortgagee  is  himself  made  the  trustee.  It  would  have  been  more 
prudent  for  him  not  to  have  taken  upon  himself  that  character. 
But  it  is  too  much  to  say  that  if  the  one  party  has  so  much  con- 
fidence in  the  other  as  to  accede  to  such  an  arrangement,  this 
court  is  for  that  reason  to  impeach  the  transaction.  It  is  next 
provided  that  if  the  mortgagor  shall  make  default  in  paying  the 
sum  stated  at  the  appointed  time,  the  mortgagee  may  make  sale 
and  absolutely  dispose  of  the  premises  conveyed  to  him.  This  is 
an  extremely  strong  clause  ;  but   perhaps   it  may  be  one  of  the 

1  Powell  on  Mortg.  I'J.  nion  mode  of  inort>;a>,nng The  evil 

"Their  validity,"    says  Mr.  Coventry,  of  the  former  mode  of  mortf^afjing  is,  that 

"  was  at  first  much  questioned,  and  when  the  mortgagee,  in  proceeding  for  the  re- 

the  doubts  surrounding  their  introduction  covery  of  his  money,  is  liable  to  be  delayed 

were  removed,  they  were  for  a  considera-  for  an   indefinite  time  in  chancery.     The 

ble  time,  and  are  even  now,  in  some  de-  new  mode  is  framed  with  a  view  to  a  set- 

gree  viewed  as  a  harsh  measure,  and  only  tlement  out  of  court,  so  that  a  large  por- 

to   be   used   where   the   money   lent    ap-  tion  of  chancery  practice  will  be  abstracted 

proaches   very   nearly   the   value   of    the  from  court  if  this  mode  of   mortgaging 

estate  mortgaged,  or  where  the  interest  becomes,  as  it  bids  fair  to  do,  the  only 

is  likely  to  run  in  arrcar.     A  mortgage  acknowledged    mode    of    mortgaging    in 

of  this  description  is  certainly  a  promjit,  general  use."     Mortg.  Prac.  \>.  150. 
powerful  security  compared  with  the  coni- 

616 


THE   NATURE   AND   USE   OF   POWERS   OF   SALE.         [§  1766. 

many  new  improvements  in  conveyancing  whicli  make  conveyanc- 
ing so  different  from  what  it  was  when  I  was  in  practice  in  that 
part  of  law."  Here  he  inquired  of  Mr.  Sugden  how  the  pi-ac- 
tice  was  in  that  respect ;  Mr.  Sugden  admitted  that  the  clause  was 
usually  inserted  in  deeds  like  the  present.  Lord  Eldon  :  "  How 
can  it  be  right  that  such  a  clause  should  be  introduced  into  a 
deed  under  which  the  party  is  a  trustee  for  himself?  Then  thei'e 
is  a  clause  that  it  shall  not  be  necessar}^  for  the  purchaser  to  in- 
quire whether  a  sale  was  proper,  &c.  Here,  too,  it  must  be  rec- 
ollected that  this  is  a  clause  to  be  acted  upon,  not  by  a  middle 
person,  who  is  to  do  his  duty  between  the  cesticls  que  trust ;  but 
the  mortgagee  is  himself  made  trustee  to  do  all  these  acts.  Upon 
the  whole,  I  must  say  that  this  deed  seems  to  me  of  a  very  ex- 
traordinary kind,  and  that  there  are  clauses  in  it  upon  which  it 
would  be  difficult  to  induce  a  court  of  equity  to  act."  ^  It  seems, 
however,  that  his  observations  were  made  without  deliberation, 
and  were  not  called  for  in  the  case  before  him.  By  general  ac- 
cord power  of  sale  mortgages  were  about  this  time  adopted  into 
general  use  in  England,  and  they  have  always  been  fully  sus- 
tained and  approved.  At  the  present  time  every  mortgage  has  a 
power  of  sale  ;  for  when  not  inserted  in  the  deed,  as  is  usually 
the  case,  a  power  of  sale  is  sujiplied  by  statute.^ 

1766.  The  powers  generally  inserted  in  mortgages  used  in 
England  are  much  more  complete,  and  give  a  more  speedy  rem- 
edy after  a  default  than  the  statute  power,  so  that  it  is  now  the 
general  understanding  that  there  must  be  a  power  of  sale,  else  the 
money  is  hardly  obtainable  upon  the  mortgage.  For  these  rea- 
sons it  is  now  held,  contrary  to  the  opinion  formerly  entertained,^ 
that  trustees,  under  a  direction  in  a  will  to  raise  money  by  mort- 

^  Roberts  v.  Bozon,  Chan.  (Feb.  182.5)  of  sale  as  a  neccssari/  incident   to  ii  niort- 

MS.,  cited  in  Coventry's  Prac.   Mort.  p.  fjage  ;  to  introduce  it  iinivcrsnlly I 

150;    1    I'oweil'B  Mortg.   (Am.  ed.)  9  a,  admit  that  it  is  niucli  more  frctiiuMit  than 

note.  it  used   to  be  thirty  or  forty  years  ago. 

2  Sec  §  1722.  But  it  is  by  no  means  an  universal  prac- 

8  In  Sanders  v.  Ricliards,  2  Coll.  568,  it  tice  ;  and  many  mortgages  may  be  seen  at 

was  hehl  that  an  executor  had  no  right  to  this  day,  in  which  no  jtower  of  sale  is  in- 

give  a  mortgage  with  a  power  of  sale.   This  troduccd."    But  waiving  tliis,  he  held  that 

is  overruled  in  the  cases  cited  in  the  follow-  a  special   power  to  a  trustee  to  mortgage 

ing  note.     In   Clarke  v.  The  Iloyal    Pa-  does  not  give  him  authority  to  sell,  and  a 

nopticon,4  Drew.  26,  Vice-Chanccllor  Kin-  /nrtiori,  does  not  give  him  a  right  to  give 

dcrslcy   remarkcfl  :  "  It   is   said,  tiuit  the  another  person  power  to  sell, 
practice  of  conveyancers  is  to  treat  a  power 

017 


§  17157.]       roWKK    OF    SALK    MORTGAGKS    and    TIU'ST    DHKDS. 

gage,  are  aulliori/.i'cl  to  give  the  mortgagee  a  power  of  sale  in  case 
of  default  in  ri'|)ayim'iit  of  the  money  or  the  iiitcu-est  of  it.  In  a 
recent  case,^  Sir  R.  Malins,  V.  C,  said:  "  I  am  of  opinion  that  a 
power  of  sale  is  a  necessary  incident  to  a  mortgage,  and  that  when 
a  testator  says  that  a  snm  of  money  is  to  be  raised  by  mortgage, 
he  means  it  to  be  raised  in  the  way  in  which  money  is  ordinarily 
raised  by  mortgage,  and,  therefore,  that  the  mortgage  may  con- 
tain what  mortgages  in  general  do  contain,  namely,  a  power  of 
sale."  This  is  further  illustrated  by  another  case  where  a  mort- 
gage was  made  by  a  deposit  of  title  deeds,  with  a  written  agree- 
ment by  the  mortgagor  "  to  execute  a  mortgage "  when  called 
upon  to  do  so.2  He  then  sold  and  conveyed  the  estate  subject  to 
the  mortgage  ;  and  afterwards  executed  a  power  of  sale  mortgage 
to  his  mortgagee,  who  subsequently  sold  the  estate  under  the 
power.  It  was  held  that  the  purchaser  was  bound  by  the  power 
of  sale ;  the  Master  of  the  Rolls  saying  the  "  mortgage  very 
properly  contains  a  power  of  sale." 

1767.  It  is  not  possible  to  say  "when  powers  of  sale  in 
mortgages  "were  first  used  in  this  country  ;  but  it  appears  from 
a  statute  enactedin  New  York  in  the  year  1774^  that  they  were 
already  in  use  at  that  time.  The  provisions  of  that  statute  were 
reenacted  in  the  first  revision  of  the  statutes  of  that  state,  and 
under  various  modifications  they  have  been  continued  to  the  pres- 
ent day.  In  Massachusetts,  in  1826,  Chief  Justice  Parker*  said 
that  a  power  to  sell  executed  to  one  who  relies  upon  such  power, 
and  expects  and  intends  to  purchase  an  absolute  estate,  would 
without  doubt  pass  an  unconditional  estate  to  the  purchaser  ;  yet 
he  says  "  this  form  of  conveyance  is  rare  in  this  country  ;  "  and 

1  In  re  Chawncr's  Will,  L.  K.  8  Eq.  power  was  granted,  would  extinK'iisli  the 
569  (1869).  In  Bridges  v.  Longman,  24  equity  of  redemption.  After  reeiting  the 
Beav.  27,  the  Master  of  Rolls  held  that  a  inconvenience  of  allowing  them  to  be  im- 
power  of  sale  is  incident  to  a  power  to  paired,  it  declares  that  the  rights  of  bona 
raise  money  by  mortgage.  See,  also,  to  Jide  purchasers  shall  not  be  defeated.  See, 
same  effect,  Selby  v.  Cooling,  2.3  Beav.  also,  as  to  the  early  use  of  powers  of  sale 
418;  Russell  v.  Plaice,  18  Beav.  21  ;  Cook  in  New  York,  Bergen  v.  Bennett,  1  Caines 
V.  Dawson,  29  Beav.  12.3,  128 ;  Earl  Vane  Cas.  1,3;  Doolittle  v.  Lewis,  7  Johns.  (N. 
V.  Regden,  L.  R.  5  Ch.  663  ;  Cruikshank  Y.)  Ch.  45 ;  Slee  v.  Manhattan  Co.  1 
V.  Duffin,  L.  R.  13  Eq.  555,  560.  Paige  (N.  Y.),  48,  69  ;  Lawrence  v.  Farm- 

2  Leigh  V.  Lloyd,  35  Beav.  455.  ers'  Loan  &  Trust  Co.  3   Kern.  (N.  Y.) 
'  Act  of  19  March,  1774.   From  thisstat-     200. 

ute  it  appears  that  doubts  were  then  en-         *  In  Eaton  v.  Whiting,  3  Pick.  (Mass.) 
tertained  whether  sales  under  powers,  by     484. 
the  mere  act  of  the  person  to  whom  the 

618 


THE   NATURE   AND   USE   OF   POWERS   OF   SALE.         [§  1768. 

he  cites  the  case  of  Croft  v.  Potcell,  decided  almost  a  hundred 
years  before,  to  the  effect  that  if  the  purchaser  knows  the  original 
nature  of  the  transaction,  and  appears  not  to  have  purchased 
wholly  without  reference  to  the  conditional  character  of  the  title, 
he  will  be  compelled  in  equity  to  surrender  it  on  receiving  the 
money  he  has  advanced. 

In  some  early  cases  it  had  been  contended  that  the  power  of 
sale  so  altered  the  character  of  .the  conveyance  as  to  deprive  it  of 
the  qualities  of  a  mortgage  ;  but  in  Uato7i  v.  Wiiting  it  was  said 
that  without  doubt  the  power  while  unexecuted  left  the  estate  as 
it  would  have  been  if  no  power  had  been  given.^ 

Fifty  years  ago  power  of  sale  mortgages  were  not  in  general 
use  anywhere  in  this  country  ;  and  although  considerable  use  was 
made  of  them  at  an  earlier  time  than  any  corresponding  use  was 
made  of  them  in  England,^  they  have  been  adopted  in  the  latter 
country,  to  the  exclusion  of  other  forms  of  security,  while  they 
have  not  been  so  adopted  here.  Within  the  past  half  century, 
however,  the  use  of  them  has  rapidly  extended,  so  that  in  several 
states  any  other  form  of  mortgage  is  exceptional.  The  validity 
of  these  powers  of  sale  is  everywhere  recognized,  and  the  use  of 
them,  either  in  mortgages  or  in  trust  deeds,  is  becoming  general.^ 

1768.  The  use  of  power  of  sale  mortgages,  however,  has 
not  yet  become  so  universal  here  as  to  lead  to  their  being  re- 
garded generally  as  a  necessary  incident  of  a  mortgage.  In  New 
York  it  is  true  that  as  early  as  1823  Chancellor  Kent  decided  that 
a  power  of  attorney  to  execute  a  mortgage  authorized  the  mak- 
ing of  it  with  a  power  of  sale,  because  such  a  power  was  then  one 
of  the  customary  and  lawful  remedies  given  to  a  mortgngee  ;  that 
it  had  become  an  incident  to  the  power  to  mortgage,  and  was  of 
course  included  under  the  authority  to  mortgage,  unless  specially 
excluded.'^  But  if  elsewhere  the  usage  has  become  so  established 
as  to  warrant  a  similar  declaration,  the  question  has  not  since  been 

1  Taylor  v.  Chowning,  3  Leigh  (Va.).  '  Turner  y.  Johnson,  10  Ohio,  204  ;  Bris- 
654;  Turner  v.  Bomhell,  3  Ilur.  &  .1.  bane  v.  Stoughton,  17  Ohio,  4S2  ;  Ilyman 
(Md.)  99.  V.  Devercux,  63   N.  C.  624.  028  ;  Milchell 

2  In  Jackson  v.  Henry,  10  Johns.  (N.  v.  Boj;an,  11  Rich.  (S.  C.)  686;  Long- 
Y.)  185,  196  (1813),  a  caHC  upon  a  power  with  v.  Butler,  8  111.32  ;  Kinsley  v.  Ames, 
of  sale  mortf,'age.  Chief  Justice  Kent  re-  2  Met.  (Muss.)  2'J  ;  Lydston  v.  Powell, 
marked  :  "  There  is  no  case  precisely  like  101  Mass.  77. 

this  in  the  English  books,  because  these         ♦  Wilson   v.    Troup,  7   Johns.  (N.  Y.) 
powers  arc  not  in  use  in  Great  Britain."         Ch.  25. 

619 


§  1760.]     rowi'U  OK  salk  moktcacks  and  trust  dkkds. 

presontod  to  the  courU  for  jiulicial  dctorininalion.  In  Massachu- 
setts, where  the  use  of  tliis  form  is  now  more  nearly  universal, 
probably,  than  in  any  other  part  of  the  country,  it  was  lield,  in 
1858,  that  a  stipulation  "  to  give  a  mortgage  "  was  complied  with 
by  giving  one  without  a  power  of  sale ;  and  that  a  power  of  sale 
was  not  then  a  usual  accompaniment  of  a  mortgage.^  Since  that 
time,  however,  there  can  be  no  doubt  that  a  power  of  sale  has  be- 
come, not  merely  a  usual  accompaniment  of  a  mortgage,  but  al- 
most an  invariable  one  ;  and  it  may  be  anticipated  that,  when  the 
occasion  arises,  the  court  will  hold,  as  have  the  courts  in  England, 
that  a  power  of  sale  is  a  necessary  incident  to  a  mortgage. 

Although  in  several  states  a  mortgage  is  by  statute  or  judicial 
interpretation  declared  to  be  a  mere  security  for  the  payment  of  a 
debt,  and  not  a  conveyance  of  the  legal  title,  yet  this  view  of  the 
nature  of  the  security  does  not  in  any  way  interfere  with,  or  im- 
pair, the  doctrine  of  powers  to  sell.^ 

1769.  Deeds  of  trust,  as  has  already  been  noticed,  are  in  legal 
effect  mortgages.'^  Where  a  mortgage  is  regarded,  in  accordance 
with  the  common  law  doctrine,  as  a  conveyance  of  the  legal  es- 
tate, a  deed  of  trust  is  of  course  none  the  less  a  conveyance  of  the 
legal  estate  ;  the  only  difference  of  opinion  on  this  point  is  whether 
in  those  states  in  which  a  mortgage  is  regarded  as  a  mere  lien,  and 
not  a  conveyance  of  the  legal  estate,  a  deed  of  trust  shall  be  held 
to  vest  the  legal  estate  in  the  trustees.  Generally,  a  deed  of 
trust  is  in  this  respect  held  to  have  onl}'  the  same  effect  as  a  mort- 
gage ;  such  being  the  decision  in  Iowa,*  Nebraska,^  Kansas,^  and 
Texas.'  But  on  the  other  hand,  in  Florida,  and  perhaps  in  other 
states,  it  is  held  that  although  a  mortgage  does  not  vest  the  legal 
estate  in  the  mortgagee,  a  deed  of  trust  is  a  conveyance  which 
does  vest  the  legal  title  in  the  trustee.^ 

As  a  general  rule,  upon  the  payment  of  a  deed  of  trust  satis- 
faction is  entered  on  the  margin  in  the  same  way  that  it  is  in 
the  case  of  a  mortgage,  and  a  reconveyance  is  not  necessary. 
The  statutes  upon    this  subject,   althougli    relating  in  terras  to 

1  Ciipron  V.  Attleborouf,'h  Bank,  11  *  Newman  y.  Samuels,  17  Iowa,  528, 535. 
Gray  (Mass.),  492;  Piatt  v.  McClure,  3  ^  Webb  v.  Iloselton,  4  Neb.  308;  Ky- 
"Woodb.  &  M.  151.  ger  v.  Kyley,  2  lb.  20,  28. 

2  Calloway  V.  People's  Bank  of  Bellefon-         «  Lenox  v.  Reed,  12  Kans.  223. 
taine,  54  Ga.  441,  449.  '  MeLane  v.  Pascbal,  47  Tex.  365. 

3  §  62;  Shillaber  v.  Robinson,  97  U.  S.  8  Soutter  v.  Miller,  15  Fla.  625;  and 
68.  see  authorities  eited  by  Judge  Dillon,  in 

620  Am.  L.  Keg.  (N.  S.)  655. 


THE   NATURE   AKD   USE   OF   POWERS   OF   SALE.         [§  1770. 

mortgages,  embrace  deeds  of  trust.^  In  like  manner  statutes  re- 
lating to  the  recording  of  mortgages  embrace  deeds  of  trust  with- 
out special  mention  of  tliem.^ 

So  substantially  alike  are  a  mortgage  and  a  deed  of  trust  given 
as  security,  that  a  railroad  authorized  to  mortgage  its  property 
may  do  this  by  means  of  a  deed  of  trust ;  ^  and  a  bank  authorized 
to  take  a  mortgage  of  lands  may  take  a  deed  of  trust  for  its  use 
to  trustees.^  "  The  attributes  of  a  deed  of  trust  for  such  pur- 
poses," says  Mr.  Justice  Walker,  of  Arkansas,  in  a  recent  case,° 
"  and  a  mortgage  with  power  of  sale,  are  the  same  ;  both  are  in- 
tended as  securities,  and  in  a  legal  sense  are  mortgages  ;  in  both, 
the  legal  title  passes  from  the  grantor ;  but  in  equity  he  is,  before 
foreclosure,  considered  the  actual  owner  in  both,  and  as  broadly 
in  one  as  the  other  ;  the  grantor  has  the  right  to  redeem,  in  other 
words  the  equity  of  redemption,  which  can  only  be  barred  by  a 
valid  execution  of  the  power." 

1770.  A  deed  of  trust  is  often  preferred  to  a  mortgage  on 
account  of  the  intervention  of  a  disinterested  person  as  trustee. 
It  has  already  been  noticed  that  Lord  Eldon  thought  it  quite  ob- 
jectionable that  a  mortgagee  should  himself  be  made  the  trustee 
to  sell  under  the  power.  But  Mr.  Coventry,  after  quoting  his 
remarks,  expressed  his  own  preference  for  a  mortgage  with  a 
power  of  sale  in  the  mortgagee.  He  thought  the  intervention  of 
a  trustee  is  in  all  cases  a  serious  inconvenience ;  and  that  even  if 
he  does  not  become  hostile  to  the  creditor,  he  may,  by  his  inex- 
perience or  squeamishness,  subject  him  to  much  trouble  ;  and  he 
recommended  that  the  mortgagee  retain  in  his  own  hands  absolute 
power  over  his  own  property.  The  objections  to  the  intervention 
of  a  trustee  are  apt  to  come  from  the  mortgagee,  and  he  is  gen- 
erally in  position  to  have  his  own  choice  in  the  matter.  The 
mortgagor  is  apt  to  suppose  that,  in  placing  the  exercise  of  the 
power  in  the  hands  of  a  disinterested  third  party,  whose  position 

1  Ingle  V.  Culbertson,  43  Town,  205;  '2  Am.  L.  K.  (N.  S.)  041;  Wilkins  v. 
WwxJniflF  w.  Robb,  19  Ohio,  212;  Smith  Wright,  6  McLean,  340;  Bunk  of  Com- 
«.  Doe,  20  Miss.  291  ;  Cro.sby  v.  HuHton,  mcrce  v.  Lannhtin,  45  Mil.  390;  Wood- 
1  Tex.  239 ;  McGregor  v.  Hall,  3  St.  &  P.  ruff  v.  Robb,  19  Ohio,  212. 

(Ala.)  397.     Contra,  Wilkins  v.  Wright,  fi         »  Wright  v.  Bundy,  1 1    Ind.  398,  404. 
McLean,  340.  *  Bennett  v.    Union    Bank,  5  Humph. 

2  Fogarty  i;.  Sawyer,  23  Cal.  570;  Ma-      (Tenn.)  012. 

gee  V.  Carpenter,  4  Ala.  469.     See  further         '■  Turner  v.  Watkin.i,  31  Ark.  429,  437. 
on  this  subject  an  article  by  Judge  Dillon, 

621 


§  1771.]       roWKK    OF   SALK    MORTGAGKS    AND   TRUST    DEIODS. 

in  relation  to  it  is  meroly  that  of  a  trustee,  he  soeures  for  himself 
the  proteetion  of  fair  dealing.  It  generally  haj)pens,  however, 
that  the  debtor  has  to  pay  for  the  services  of  a  trustee,  whose  dis- 
interestedness is  no  more  than  that  of  the  creditor  himself.  The 
trustee  is  obliged  to  act,  when  the  creditor  secured  by  the  deed 
has  a  legal  right  to  call  for  the  exercise  of  the  power,  and  if  he 
neglects  or  refuses  to  act,  he  may  be  compelled  to  do  so  or  to  give 
up  the  trust.  The  trustee  may,  -when  in  doubt  about  his  duty, 
apply  to  the  court  in  equity  to  direct  him. 

This  form  of  security  has  come  into  very  general  use  in  several 
states,  and  in  Virginia  and  West  Virginia,  in  particular,  has  come 
into  universal  use  in  securing  debts  upon  real  estate.  In  a  recent 
case  in  the  former  state,  Mr.  Justice  Rives,  in  the  course  of  an 
able  opinion  holding  unconstitutional,  as  applied  to  trust  deeds, 
a  law  staying  the  collection  of  debts  for  a  limited  period,  spoke 
of  the  nature  and  use  of  this  security.^  "  What  is  a  deed  of 
trust  ?  It  is  a  form  of  security  which  has,  in  our  practice,  super- 
seded the  mortgage,  and  doubtless  for  the  very  reason  that  it 
does  not  require  the  intervention  of  the  courts.  The  introduc- 
tion of  trustees,  as  impartial  agents  of  the  creditor  and  debtor, 
admits  of  a  convenient,  cheap,  and  speedy  execution  of  the  trust, 
and  involves  none  of  the  expenses  and  delays  attendant  upon 
mortgages. 

"  At  an  early  period  it  met  with  some  resistance  from  the  court 
and  the  bar,  though  feeble  and  ineffectual.  It  was  deprecated  as 
an  engine  of  oppression  in  the  hands  of  the  creditor.  It  was  de- 
nounced as  a  pocket  judgment It  is  now  a  favorite  secu- 
rity for  the  payment  of  money,  closely  interwoven  with  the  trans- 
actions of  business,  and  firmly  established  by  the  practice  of  the 
country  and  the  sanction  of  the  courts.  It  has,  doubtless,  aided 
credit,  facilitated  the  collection  of  debts,  and  saved  to  the  debtor 
the  costs  of  legal  proceedings." 

1771.  The  trustee  in  a  deed  of  trust  is  the  agent  of  both 
parties,  and  he  should  perform  his  duties  with  the  strictest  impar- 
tiality.^ A  failure  to  use  reasonable  diligence,  or  an  abuse  of  his 
discretionary  powers,  renders  him  personally  liable  to  the  party 
injured  for  the  damage  done.  Thus,  if  without  authority  he  re- 
leases any  part  of  the  security,  or  after  a  sale  of  the  property 

1  Taylor  v.  Stearns,  18  Gratt.  244,  278  2  Sherwood  v.  Saxton,  63  Mo.  78,  and 
(1868).  cases  cited. 

622 


THE  POV/EK  OF  SALE  IS  A  CUMULATIVE  REMEDY.   [§§  1772,  1773. 

under  the  power  irapi-operly  releases  the  purchaser  from  his  bid, 
and  subsequently  sells  for  a  less  sum,  he  is  liable  to  the  benefi- 
ciary in  an  action  at  law  for  the  damages  sustained.^  A  sheriff  or 
other  officer  acting  in  lieu  of  a  trustee  under  authority  of  a  statute 
acts  in  his  official  capacity,  and  for  a  breach  of  trust  or  failure  of 
duty  is  liable  upon  his  bond.^ 

1772.  The  debt  secured  by  a  deed  of  trust  belongs  prinid 
facie  to  the  beneficiary  named  in  the  deed.  When  this  is  claimed 
by  the  trustee  himself,  the  presumption  against  him  derived  from 
the  deed  must  be  overcome  by  the  clearest  proof  ;  and  the  fact 
that  the  note  and  deed  have  been  left  in  his  possession  is  of  little 
importance,  especially  when  the  beneficiary  is  a  woman  and  a  near 
relative.^ 

2.   The  Power  of  Sale  is  a  Cumulative  Remedy. 

1773.  Generally  a  power  of  sale  does  not  affect  the  right  to 
foreclose  in  equity,  either  by  a  strict  foreclosure,'*  or  by  a  judicial 
sale,^  or  to  foreclosure  in  any  way  provided  by  statute  for  the  or- 
dinary foreclosure  of  mortgages,  as  by  entry  and  possession,  or 
by  suit  at  law.  The  power  is  merely  a  cumulative  remedy.  It 
is  one  species  of  foreclosure  ;  but  it  does  not  exclude  jurisdiction 
in  equity.  The  option,  however,  to  proceed  in  equity  lies  wholly 
with  the  mortgagee.  A  resort  to  a  court  of  equity  is  not  neces- 
sary, except  where  made  so  by  statute  ;  it  can  be  effectually  exer- 
cised without  the  aid  of  the  courts.^  Even  after  the  filing  of  a 
bill  in  equity  to  foreclose  such  a  mortgage,  and  while  the  bill  is 
pending,  a  sale  may  be  made  under  the  power.^ 

A  resort  to  proceedings  in  equity  is  more  frequent  under  deeds 
of  trust  than  with  mortgages.  The  creditor  may  sometimes  be 
compelled  to  do  this  in  order  to  control  the  adverse  action  of  the 
trustee;  and  a  trustee  may  sometimes  do  so  in  order  to  obtain  the 

1  Sherwood  v.  Saxton,  f.3  Mo.  78,  and  Ala.  823  ;  Marriott  v.  Givcns,  8  Ala.  694  , 

cases  cited.  Carradiiie  v.  O'Connor,  21  Ala.  57.1 ;  Wof- 

■^  State    V.    Griffith,    63    Mo.    .54.').     §§  ford  v.   Board  Police   of   Holmes   Co.   44 

1745,1785.  Miss.  579;  McAllister  v.  I'lant,  .04  Miss. 

*  fiiiiihel  y.  Pitriicro,  C2  Mo.  240.  106;    Fogarty    v.    Sawyer,    17   Cal.  589; 

*  Wayne  v.  Hanham,  9  Hare,  62;  20  Cormerais  v.  Genilla,   22  Cal.    116;  At- 
L.  J.    .530;    Slade   v.   Ui^t',   3  Hare,   35;  water  y.  Kiuman,  Ilarr.  (Mich.)  255. 
Cormerais  v.  Genclla,  22  Cal.  116.  o  Hyde  v.  Warren,  4f>  Miss.  13. 

^  Hutton  I'.   Scaly,  4  Jur.  N.  S.  450;         ^  Brisbane  y.  Stou},'hton,  17  Ohio,  482. 
McGowan  v.  Branch  Bank  of  Mobile,  7 

623 


^  177-1. J       ruWKU    OF    SAI.K    MOKTfiAGKS    AND    TKUSr    DKKDS. 

iliroetion  of  tlio  court  as  to  liis  iluties.  Wlion  a  trustoe  under  a 
trust  deed  outers  iuto  a  collusivt;  arrangement  with  the  grantor 
in  th»'  (Iced  and  dec  lines  to  I'xecute  th(>  trust,  and  after  instituting 
an  action  of  eject nuMit  to  recover  jxjssession  of  the  preuiis(\s  dis- 
ndssi's  it  against  the  wish  of  the  beneliciary,  a  forcsclosure  may 
be  had  in  chancery  and  a  receiver  may  be  appointed,  upon  show- 
ing the  inadequacy  of  the  security  for  the  payment  of  tlie  debt.^ 
A  court  of  equity,  whenever  a  contingency  arises  which  gives 
it  jurisdiction  and  occasion  to  interfere,  will  at  the  instance  of  a 
cestui  que  trust  control,  restrain,  and  direct  the  exercise  of  the 
power.- 

1774.  The  court  'will  appoint  a  new  trustee  upon  the  death, 
inability,  or  declination  of  the  trustee  named  in  the  deed  of  trust, 
upon  the  application  of  the  persons  interested  in  the  execution  of 
the  trust,  and  of  the  author  of  the  trust  as  well ;  ^  but  they  are  all 
necessary  parties  to  a  bill  to  obtain  such  appointment.  Although 
the  person  who  made  the  trust  deed  has  conveyed  to  another  his 
interest  in  the  premises,  so  long  as  he  remains  liable  for  the  pay- 
ment of  the  note  secured  by  the  deed,  he  is  interested  in  the  ap- 
pointment of  a  proper  person  to  sell  the  property  in  such  manner 
as  not  unnecessarily  to  cause  a  deficiency.  The  purchaser  from 
liim  is  directly  interested  in  the  sale  of  the  property,  and  is  also  a 
necessary  party.* 

So,  also,  when  a  trustee  removes  to  a  foreign  country  and  there 
becomes  a  permanent  resident,  he  incapacitates  himself  from  dis- 
charging the  duties  of  his  trust  and  vacates  his  office.  A  new 
trustee  may  thereupon  be  appointed.  Where  a  railroad  mort- 
gage provides  that  upon  the  death,  removal,  or  incapacity  of  a 
trustee  the  majority  of  the  bondholders  may  designate  in  writing 
a  person  to  fill  the  vacancy,  and  the  bondholders  select  a  new 
trustee  in  place  of  one  who  has  permanently  removed  from  the 
state,  the  courts  will  recognize  the  new  trustee,  and  restrain  the 
other  from  acting.^ 

A  trustee  who  has  once  accepted  the  trust  is  not  allowed  to  lay 
it  down  without  the  assent  of  the  beneficiary,  or  the  decree  of  a 

1  Myers  v.  Estell,  48  Miss.  37:i.  *  Huldcu  v.  Stickncy,  2  MacAr.  (D.  C.) 

2  Youngman  v.  Elmira,  &c.  11.  R.  Co.     141. 

65  Pa.  St.  2'S.  ^  Farmers'  Loan  &  Trust  Co.  v.  Hughes, 

3  Clark  V.  Wilson,  53  Miss.  ll'J.  11  Huu  (N.  Y.),  130. 

G24 


THE   POWER    OF   SALE   IS   A   CUMULATIVE    REMEDY.       [§§  1775,  1776. 

court  of  equity  ;  ^  but  if  within  the  jurisdiction  of  the  court  may 
be  compelled  to  discharge  the  trust.^ 

The  trust  deed  often  makes  provision  for  the  filling  of  any 
vacancy  that  may  occur  in  the  office  of  trustee  ;  and  if  the  person 
who  is  to  execute  the  trust  and  the  event  upon  which  he  may  ex- 
ecute it  are  distinctly  described,  he  may  act,  and  his  acts  will  be 
valid.  But  if  a  power  to  appoint  a  new  trustee  be  conferred  by 
the  deed  upon  the  cestui  que  trust,  his  assignee  cannot  make  a 
valid  appointment ;  for  this  power  of  appointment  is  personal  or 
in  gross  ;  is  a  confidence  reposed  in  him  which  he  cannot  delegate 
to  another,  unless  expressly  authorized  by  the  donor.^ 

1775.  The  sale  is  by  virtue  of  the  power  and  not  of  the 
decree  when  the  court  enforces  the  power.  Upon  the  death  of 
the  trustee  named  in  a  deed  of  trust,  a  court  of  equity  has  power 
to  appoint  a  new  trustee  to  execute  the  power  of  sale,  and  to  de- 
termine the  amount  of  the  debt  secured  by  the  trust ;  but  a  sale 
by  such  trustee  professedly  by  virtue  of  the  trust  deed,  made  in 
pursuance  of  such  decree,  is  not  a  sale  made  under  a  decree  of 
foreclosure,  but  one  made  by  virtue  of  the  power  in  the  trust 
deed.*  It  has  been  held  in  Viro^inia  that  such  trustee  cannot  sell 
until  the  amount  of  the  debt  secured  is  ascertained;  and  that 
either  party  in  interest  may  resort  to  a  court  of  equity  for  this 
purpose.^ 

After  ascertaining  the  amount  the  court  may,  in  its  discretion, 
dismiss  the  bill  and  leave  the  trustee  to  sell  under  the  power,  or 
may  retain  the  case  and  have  the  trust  executed  under  its  own 
supervision.  The  court  may  also  appoint  a  commissioner  to  make 
the  sale  instead  of  the  trustee ;  but  he  must  pursue  the  provisions 
of  the  deed  as  to  the  terms  and  mode  of  sale.  The  court  cannot 
set  aside  the  deed  of  trust  in  any  respect.^ 

1776.  When  debt  is  unliquidated.  —  If  the  amount  secured 
by  the  mortgage  can  be  ascertained  by  calculation,  there  is  no  ob- 
jection to  a  foreclosure  under  the  power  ;  "^  neither  is  there  if  it  is 

1  Draiic  V.  Giintcr,  10  Ala.  731.  ^  Wilkins  v.  Gordon,  11   Leigh  ( Vii), 

2  Sarcftit  V.  Howe,  21   111.  148.  547. 

»  Clark  I'.  Wilson,  ."j.T  Miss.  119.  o  Crenshaw  v.  Seigfricd,  24  Graft.  ( Va.) 

♦  Uice   V.  Brown,  77   111.  540  ;    Holdcn     272. 
V.  Siickney,  2  MacArthur  (1).  C),  141;         '  Mowry  i>.  Sanborn,  f>2  Hnrh.  (N.  Y.) 
Staats   V.  Bigelow,  Ih.   .367;   Dooliulc  v.     223;  68  N.  Y.  153.     See  §  1812. 
I>cwis,  7  Johns.  (N.  Y.)   Ch.  45;  Beatie 
V.  Butler,  21  Mo.  313. 

VOL.  11.  40  625 


§§  1777,  1777  <7.]     rowKK  of  salk  mortgages  and  tkust  dekds. 

coiulitioiu'il  for  the  dc'livory  ul'  eertiiin  spccilicd  articles,  when  a 
specified  sum  is  authorizeil  to  be  I'etained  from  the  proceeds  upon 
a  broach  of  the  comlition.^  It  is  then  equivalent  to  a  mortgage 
to  secure  the  payment  of  a  dclhiite  sum.  But  a  mortgage  given 
to  secure  and  cover  unliquidated  damages  cannot  be  foreclosed  in 
this  manner,^  until  the  amount  due  under  the  mortgage  has  been 
ascertained.  It  has  been  held  also  that  under  a  deed  of  trust  if 
the  amount  of  the  debt  secured  be  unliquidated  and  uncertain,  a 
sale  cannot  be  made  under  the  power  until  the  amount  of  the 
debt  has  first  been  determined  in  a  court  of  equity.^ 

The  objection  that  the  sum  secured  is  uncertain  or  unliquidated 
has  particular  force  in  those  states  in  which  there  are  statutory 
provisions  that  only  so  much  of  the  estate  as  may  be  necessary  to 
satisfy  the  mortgage  debt  shall  be  sold. 

3.   Construction  of  Power. 

Ylll .  The  power  to  sell  may  not  only  be  made  by  an  in- 
strument separate  from  the  mortgage,  but  it  may  be  to  a  third 
person,  instead  of  the  mortgage  creditor ;  for  instance,  it  may  be 
in  the  form  of  a  power  of  attorney  to  a  third  person  ;  and  such 
power  when  executed  according  to  its  terms  effectually  cuts  off 
the  equity  of  redemption.*  Moreover  a  power  in  the  mortgage  or 
deed  may  be  changed  by  a  writing  subsequently  executed  by  the 
parties  under  seal.^  A  power  of  sale,  though  it  should  be  ex- 
pressly and  fully  conferred,  may  sometimes  arise  by  necessary  im- 
plication from  the  terms  of  the  instrument.^      * 

1777  a.  A  power  of  sale  may  in  general  be  conferred  by  any 
owner  of  lands  who  has  the  legal  capacity  to  convey  them.  A 
statute  which  provides  that  any  married  woman,  above  the  age  of 
eighteen  years,  joining  with  her  husbiind,  may  make  a  valid  mort- 
gage or  other  conveyance  of  her  real  estate  or  of  any  interest 
therein,  authorizes  such  married  woman  executing  a  mortgage  or 
deed  of  trust  in  the  manner  provided  to  confer  a  power  of  sale,  the 
exercise  of  which  will  effectually  bar  her  equity  of  redemption.^ 

1  Lockwood  I'.  Turner,  7  Wend.  (N.  Y.)  ^  Brisbane  v.  Stoughton,  17  Ohio,  482. 
458.  ^  Baldrldge  v.  Walton,  1  Mo.  520. 

2  Fergnson  v.  Kimball,  3  Barb.  (N.  Y.)  ''  Purdie  v.  Whitney,  20  Pick.  (Mass.) 
Ch.  616;  Mowry  v.  Sanborn,  08  N.  Y.  25;  Muudy  o.  Vawter,  3  Gratt.  (Va.) 
153  ;  Mosby  v.  Hodge,  76  N.  C.  387.  518. 

8  Wilkins  v.  Gordon,  11  Leigh  (Va.),         "  Barnes  v.  Ehrman,  74  111.402. 
547. 

626 


CONSTRUCTION   OF  POWER.  [§§  1778-1780. 

Such  a  power  is  an  irrevocable  authority  to  aid  in  the  aliena- 
tion of  the  estate,  and  bears  no  analogy  to  covenants  declared 
by  the  common  law  to  be  inoperative  in  the  deed  of  a  married 
woman. ^ 

1778.  The  parties  may  also  make  such  provisions  and  reg- 
ulations about  the  sale  of  the  property  under  the  trust  as  the}' 
may  choose ;  and  the  sale  must  be  in  accordance  with  the  provi- 
sions of  the  power  given.  No  particular  form  of  words  is  nec- 
essary to  constitute  the  power.  The  essential  provisions  of  it 
should  be  clearly  and  fully  expressed,  for  the  title  of  the  pur- 
chaser under  the  power  rests  upon  the  authority  thei'e  given. ^ 
When  in  a  trust  deed  the  powers  of  the  trustee  are  not  strictly 
defined  they  rest  largely  in  his  discretion,  and  it  is  pi-esumed  that 
he  will  exercise  them  for  the  best  interests  of  the  cestui  que  trust? 
Thus  the  deed  usually  designates  the  place  of  sale  and  the  char- 
acter of  the  notice  of  it  to  be  given  ;  but  if  the  deed  leaves  these 
matters  to  the  discretion  of  the  trustee,  a  sale  by  him  in  the 
honest  exercise  of  his  judgment  wall  be  sustained.* 

1779..  What  is  a  suflficient  power.  —  A  provision  in  a  mort- 
gage that  if  the  mortgagor  "  shall  fail  to  make  the  payment,  the 
said  mortgagee  shall  advertise  twenty  days,  and  sell  enough  of 
the  estate  herein  conveyed  to  him  to  pay  said  amount  then  due, 
and  the  said  mortgagor  shall  have  the  right  to  direct  what  shall 
be  sold,"  is  a  sufficient  power  of  sale,  and  may  be  executed  with- 
out the  aid  of  a  court  of  equity.^  The  power  of  sale  may  even  be 
contained  in  a  deed  of  the  land  to  the  debtor.  A  stipulation  in 
Bucii  deed  that  if  the  grantee  fail  to  pay  the  notes  given  for  the 
purchase  money  when  due,  the  siieriff  of  the  county  acting  at  the 
time  of  default  shall  sell  the  land,  give  title  to  the  purchaser,  and 
pay  the  money  to  the  grantor,  or  to  the  assignee  or  holder  of  any 
of  the  notes,  confers  a  valid  power  of  sale  upon  the  sheriff,  al- 
though tlie  title  to  the  land  is  in  the  grantee.^ 

1780.  Acceptance  of  trust.  —  It  is  not  requisite  to  the  valid- 
ity of  a  power  in  a  trust  dofid  that  the  person  who  is  to  execute 
the  power  shall  signify  his  willingness  to  do  so  by  joining  in  the 
deed,  or  by  any  formal  writing.^     Although  the  deed  be  delivered 

'  Barnes  j;.  Ehrman,  »M/wa,  {xjr  Scott,  J.  *  Inj^Ic  v.  CulbcrtBon,  supra. 

*  Grwrnc  V.  Cullcn,  23  fJiatt.  (  Vh.)  2f.fj.  '  Ilyman  v.  Devcreux,  fi.'l  N.  C.  624. 

For   form    used    in    Nlw     Knplnnil,    sec  "  Moore  v.  Luckey,  5.'l  Miss.  S5. 

Crocker's  Notes  on  Common  Korm.s,  92.  ''  LefHcr   v.   Armstronjr,   4    Iowa,  482  ; 

'  Ingic  V.  CulbcrUon,  43  Iowa,  265.  627 


§§  1781-1784.]     I'owKU  OF  salk  moktgagks  anh  trust  dkkds. 

to  tlie  ir>ttui  (jiw  trust  and  tho  trustee  novcr  lias  possession  of  it, 
yet  his  aotiiij^  undiT  tlu'  trust  by  adviMtising  the  property  for  sale 
is  an  acceptance  of  the  trust  by  him.^  Neither  is  it  necessary  that 
the  ccxtui  qui'  tru»t  should  signify  his  assent  by  any  formal  writ- 
ing.     The  deed  being  for  his  biMiefit,  his  assent  is  itresunied.^ 

1781.  An  obvious  error  on  the  face  of  the  power,  such  as  a 
recital  that  "  the  party  of  the  first  part,"  who,  according  to  the 
phraseology  of  the  deed  was  the  mortgagor,  should  proceed  to  sell, 
does  not  invalidate  the  power,  when  it  appears  from  the  whole  in- 
strument that  the  intention  was  to  confer  a  power  of  sale  on  the 
mortgagee.'^ 

1782.  Prior  entry  when  necessary.  —  Under  a  power  in  de- 
fault of  payment  to  "  enter  and  take  possession  of  said  premises 
immediately,  and  sell  and  dispose  of  the  same,"  a  sale  cannot  be 
made  without  a  previous  entry  and  taking  possession,  or  at  least 
a  demand  for  possession  and  a  refusal  ;  *  but  it  is  not  necessary 
that  the  mortgagee  should  enter  upon  the  premises  at  any  other 
time,  or  in  any  other  manner,  than  at  the  time  of  the  sale  and  for 
the  purposes  of  the  sale.  Such  entry  is  authorized  to  enable  the 
sale  to  be  made  upon  the  premises.^ 

1783.  The  fact  that  a  mortgagee  has  made  an  entry  for 
foreclosure,  and  taken  rents  and  profits  which  are  insufficient  to 
discharge  the  debt,  does  not  prevent  his  making  a  valid  sale  under 
a  power  of  sale  in  the  mortgage.  The  rents  and  profits  received 
go  to  reduce  the  amount  of  the  mortgage  debt.^ 

1784.  As  against  the  mortgagor  a  sale  under  a  power  is 
good,  although  the  mortgage  or  the  power  has  not  been  re- 
corded ; "  though  now  in  several  states  in  which  the  exercise  of 
the  power  of  sale  is  regulated  by  statute,  it  is  provided  that  the 
mortgage  or  power  shall  be  recorded.  Under  such  provisions,  if 
the  premises  consist  of  distinct  lots  situated  in  two  or  more  coun- 
ties, the  mortgage  must  be  recorded  in  each  county,  or  the  sale 
will  be  invalid  as  to  the  part  in  the  county  in  which  there  was  no 
record.^     A  valid  sale  may  be  made  by  the  assignee  of  a  mort- 

Hipp  V.    Huchett,   4   Tex.   20;    Flint  v.  ^  Cranston  r.  Crane,  97  Mass.  459. 

Clinton  Co.  12  N.  H.  432.  6  Montague  v.  Dawes,  12  Allen  (Mass.), 

1  Crocker  v.  Lowenthal,  8.3  111.  579.  397.     And  see  §  1268. 

2  Shearer  v.  Loftin,  20  Ala.  703.  "  Wilson  v.  Troup,  2  Cow.  (N.  Y.) 
8  Gaines  i;.  Allen,  58  Mo.  537.  195;  Jackson  v.  Colden,  4  Cow.  (N.  Y.) 
*  Roarty  v.  Mitchell,   7   Gray  (Mass.),  266. 

243.  «  Wells  V.  Wells,  47  Barb.  (N.  Y.)  416. 

628 


I 


CONSTRUCTION    OF   POWER.  [§§  1785-1787. 

gage  containing  a  power  of  sale,  although  the  assignment  is  not 
recorded  till  after  the  sale,  if  nobody  is  thereby  misled.^ 

1785.  "Who  may  exercise  the  power.  —  In  general  any  per- 
son in  whom  the  legal  estate  or  title  under  the  mortgage  is  vested 
may  sell  under  the  power.  So  long  as  the  mortgagee  retains  the 
mortgage  the  power  must  be  exercised  by  him  ;  and  when  it  has 
been  wholly  assigned  the  assignee  must  exercise  it.^  If  upon  the 
face  of  the  assignment  it  appears  that  it  has  been  assigned  only  in 
part,  the  mortgagee  and  assignee  should  join  in  the  sale.^  But  to 
create  a  valid  power,  or  to  make  a  valid  execution  of  it,  one  must 
have  a  legal  capacity  to  act  and  contract,  and  one  under  any  legal 
disability,  such  as  minority,  can  do  neither.*  A  married  woman 
may  make  a  good  power,  or  a  valid  execution  of  one.^ 

A  deed  of  trust  with  a  power  of  sale  made  to  a  sheriff  and  his 
successors  in  office  is  construed  as  conferring  a  power  not  upon  the 
sheriff  in  his  individual  capacity  ;  but  in  his  official  capacity,  and 
his  successors  in  office  may  execute  it.^ 

1786.  A  power  of  sale  may  be  executed  by  the  administra- 
tor of  the  mortgagee,  altliough  in  terms  the  power  is  given  only 
to  him,  "  his  heirs  or  assigns."  ^  The  power  being  coupled  with 
an  interest  passes  to  any  one  in  whom  the  mortgagee's  estate 
becomes  vested,  whether  by  assignment  in  fact  or  in  law.  It  does 
not  matter  that  the  appointment  of  the  executor  or  administrator 
is  made  in  another  state,  as  the  power  is  a  matter  of  contract  and 
not  of  jurisdiction,  although  for  the  purpose  of  making  the  record 
title  complete  an  appointment  in  the  state  where  the  land  is  situ- 
ated is  essential.^  A  surviving  executor  or  administrator,  if  he 
retains  authority  under  the  will  or  by  law  to  go  on  with  the  ad- 
ministration of  the  estate,  may  sell  under  the  power. 

1787.  A  legal  assignment  of  the  mortgage  passes  the  power 

»  Montague  r.  Dawes,  12  Allen  (Mass.),  «  Beal  v.  Blair,  33  Iowa,  318  ;  §  1771. 

397.  '  Lewie   v.    Wells,  50  Ala.    I'J«;   Ilar- 

2  Cohoea  v.  Gobs,  13  Barb.  (N.  Y.)  137;  nickell  i^  Orndorff,  35  Md.  341  ;  Berry  v. 

McGwire  »;.  Van  Pelt,  55  Ala.  344.  Skinner,  30  Md.  573  ;  Collins  r.  Hopkins, 

8  Wilson  V.  Troup,  2  Cow.  (N,  Y.)  195,  7    Iowa,   463;  Demarest  v.  Wynkoop,   3 

231.  Johns.  (N.  Y.)  Ch.  125,   145;  Jr.hnson   v. 

*  Burnet   v.   Denniston,   5  Johns.    (N.  Turner,  7  Ohio,  568. 

Y.)Ch.  35.  '  Doolittle  u.  Lewis,  7   Johns.  (N.  Y.) 

»  Demarest  i'.  Wynkoop,  3  Johns.   (N.  Ch.  45;  Averill  v.  Taylor,  5  How.  (N.  Y.) 

Y.)  Ch.  120  ;  Doolittle  v.  Lewis,  7  Johns.  I'r.  470. 
(N.  Y.)  Ch.   45;  Young  v.   Graff,  28  111. 
20. 

629 


§  1787.]     rowKR  or  sale  mortgages  and  trust  deeds. 

of  sale  unless  there  ;ire  worils  of  restriction. ^  It  does  not  matter 
that  the  assi«^nnient,  though  iibsohite  in  form,  is  in  fact  a  secu" 
rity  for  a  debt  (hie  from  the  mortgagee  ;  but  although  such  as- 
signee may  foreeU)se  in  the  same  way  as  any  assignee,  yet  if  he 
purchases  at  the  saU^  the  mortgagee  may  redeem.^  If  by  concur- 
rence of  the  mortgagor-  the  time  of  payment  is  extended,  or  the 
terms  are  otherwise  changed,^  the  power  remains  unimpaired. 
The  assignment  of  the  note  does  not  prevent  a  foreclosure  in  the 
name  of  the  mortgagee  for  the  use  of  the  assignee.*  But  if  the 
mortgagee  commences  the  advertisement  under  the  power,  and 
before  the  sale  assigns  the  mortgage  to  a  third  person,  who  con- 
tinues the  advertisement  in  the  mortgagee's  name  instead  of  ad- 
vertising anew,  the  sale  is  irregular  and  void.^  An  assignment 
which  is  not  effectual  either  at  common  law  or  by  statute,  as,  for 
instance,  one  made  by  an  informal  indorsement  without  any  trans- 
fer of  the  note,  does  not  operate  to  pass  the  power  of  sale  to  the 
assignee,  but  leaves  it  still  in  the  mortgagee.*' 

The  power  of  sale  is  usually  vested  in  the  mortgagee,  "  his  ex- 
ecutors, administrators,  or  assigns."  If  it  is  not  given  to  his 
"  assigns,"  then  one  who  has  taken  a  transfer  of  the  mortgage 
cannot  exercise  it,  although  the  deed  empowers  the  "  assigns," 
amongst  others,  to  give  a  receipt  for  the  purchase  moneys  obtained 
by  such  sale.^  Where  the  power  is  to  "  assigns,"  a  devisee  of  the 
mortgagee  can  exercise  it ;  though  he  cannot  if  these  words  are 
omitted.^  The  word  "assigns"  is  not  regarded  as  meaning  merely 
the  persons  whom  the  mortgagee  may  during  his  lifetime  make 
such,  but  as  meaning  as  well  those  whom  he  or  his  transferee  may 
make  such  by  will.^ 

An  assignee  of  part  of  the  mortgage  notes  with  an  assignment 
of  the  mortgage  or  so  much  thereof  as  secures  the  payment  of  the 

1  Bush   V.   Shermau,  80   111.   160;  Co-         6  Niks  v.  Ransford,  1  Mich.  338. 
hoes  Co.  V.  Goss  13  Barb.  (N.  Y.)   137  ;         6  Hamilton  v.  Lubukee,  51  111.  415. 
Slee  v.  Manhattan  Co.  1  Pai^'e  (N.Y.),  48;         ^  Bradford    v.   Belficld,    2    Sim.    264; 

Bergen  v.  Bennett,  1  Caines  (N.  Y.)  Cas.  Townsend   v.   Wilson,    1  B.  &  Aid.  608. 

1  ;  Wilson  v.  Troup,  2  Cow.  (N.  Y.)  236;  In  England  it  is  now  a  common  precau- 

Pease  v.  Pilot  Knob  Iron  Co.  49  Mo.  124;  tion  to  vest  the  power  of  sale  also  in  all 

Pickett  V.  Jones,  63  Mo.  195  ;  Ilarnickell  persons  entitled  to  give  a  receipt  for  the 

V.  Orndorff,  35  Md.  341  ;  McGuire  v.  Van  mortgage  debt.     Fisher's  Mortg.  p.  504. 
Pelt,  55  Ala.  344.  »  Cooke .t;.  Crawford,  13  Sim.  91  ;  Mac- 

'^  Slee  V.  Manhattan  Co.  snpra.  donald   v.  Walker,  14  Beav.  556  ;  Wilson 

8  Young  V.  Roberts,  15  Beav.  558.  v.  Bennett,  5  De  G.  &  S.  475. 

<  BourlanJ  v.  Kipp,  55  111.  376.  «  Titley  v.  Wolstenholme,  7  Beav.  425. 

6ao 


CONSTRUCTION    OF   POWER.  [§§  1788,  1789. 

notes  assigned,  has  an  implied  right  to  avail  himself  of  the  power 
of  sale  to  collect  the  notes  assigned.^ 

1788.  In  respect  to  the  assignment  of  deeds  of  trust  a  dif- 
ferent rule  prevails,  however.  The  trustee  is  a  mere  instrument 
to  execute  the  purpose  of  the  grantor,  and  he  is  clothed  with  the 
legal  estate  merely  for  this  purpose.  The  trust  is  a  confidence 
which  cannot  be  delegated  except  as  provided  bj-  the  persons  who 
created  the  trust;  and  a  provision  for  this  purpose  must  be  ex- 
press and  beyond  question.  Therefore,  it  has  been  held  that  a 
trust  deed  to  two  persons,  or  the  survivor  of  them,  and  the  heirs 
and  assigns  of  the  survivor,  could  not  be  executed  by  another  to 
whom  the  survivor  conveyed  the  property,  as  the  word  "  assigns  " 
does  not  with  certainty  mean  a  person  whom  the  trustee  might 
make  such  by  his  own  act  during  his  life.^ 

1789.  An  equitable  assignee  cannot  execute  the  power. 
The  power  must  be  strictly  pursued,  and  it  is  presumed  that  the 
delegation  of  the  power  is  induced  by  trust  and  confidence  in  the 
trustee.  If  the  mortgage  does  not  provide  that  an  assignee  may 
execute  the  power,  the  law  does  not  confer  it  upon  the  assignee, 
and  it  can  only  be  exercised  by  the  mortgagee.^  It  may  be  exer- 
cised by  an  assignee  if  the  power  so  provides,  and  the  assignee  is 
the  legal  assignee  of  the  debt  and  mortgage.*  But  if  the  debt  be 
not  evidenced  by  an  instrument  assignable  by  law,  nor  in  any 
way  except  by  the  mortgage  itself,  which  is  not  assignable  except 
in  equity,  then  the  mere  assignment  of  the  mortgage,  as  the  courts 
of  Illinois  hold,  passes  only  an  equitiible  title  to  the  debt,  and  the 
power  does  not  pass  to  the  assignee,  and  can  be  executed  only  by 
the  mortgagee  himself.^  An  assignee  of  the  note  alone  cannot 
execute  the  power.^  If  the  debt  is  of  such  a  character  that  it  may 
be  legally  assigned,  so  as  to  vest  the  legal  title  in  the  assignee, 
then  the  assignee  himself  must  execute  the  power.'^  The  legal 
assignee  may  make  the  sale  in  his  own  name,  but  the  equitable 

1  Brown  v.  Dflaney,  22  Minn.  349.  i^  Mason    v.    Ainswortli,    .^s    111.    103; 

2  Whiticlscy   v.    IhifihcH,   39    Mo.    13;     Hamilton  w.  Lubukcc,    f)!   111.   41.').      Sec 
McKniKht  V.  Wimer,  38  Mo.  132  ;  nnd  see     §  826. 

Picket t  V.  Jonc.i,  63  Mo.  19.5,  199.  «  Cushman  v.  Stone,  f>9  111.  ."ilfi. 

8  Flower  »;.  Elwoofl,    f.O  111.  438;  Wil-         '  rnrdec  v.  Lindlcy,  31  III.  174;  Rtro- 

Bon  i;.  Spring,  fi4  111.  14.  ther  v.  Lnw,54  III.  413  ;  Hnrficnt  v.  Howo, 

*   Ilcnth  V.    Hall,    fiO    111.    .344;  Dill    v.  21  111.  148;  Wilson  ».  Trouj),  2  Cow.  (N. 

Sattcrfielil,  34  Md.  52.  Y.)  197  ;  Vnnsant  v.  Allmon,  23  III.  30. 

631 


§  1700.]       rOWKR   OF   SALF.    MORTGAUKS   AND   TRUST    DKFDS. 

assinriitH^  caiitiot.^  Such  assii:;noo  can  avail  liinisolf  of  his  assign- 
nuMit  only  in  iiro(*eetrm<j;H  in  (M^uity.- 

1790.  A  power  in  a  mortgage  or  a  trust  deed  to  two  or 
more  jointly  nnust  bo  exocntcd  by  all  tlie  donees.  But  if  it  j)ro- 
viile  that  the  grantees  "or  either  of  tluMn  "  may  sell,  then  the 
power  may  be  exercised  by  one  alone.  It  is  the  better  practice, 
lu)\vever,  for  the  jiersons  having  a  joint  interest  in  a  mortgage  to 
join  in  the  execution  of  the  power  of  sale.^  If  there  be  two  or 
more  joint  mortgagees  or  trustees,  the  power  should  be  extended 
to  the  survivors  and  survivor  of  them,  and  the  executors  or  ad- 
ministi'ators  of  such  survivor,  or  their  or  his  assigns.  When  the 
deed  is  without  this  provision  for  survivorsliip,  on  the  death  of  one 
of  the  grantees,  his  executor  or  administrator  must  join  in  the 
execution  of  the  power ;  *  unless  it  appear  otherwise  from  the  deed 
that  the  interest  was  a  joint  one,  and  that  the  intention  was  that 
the  security  with  all  the  advantage  of  the  power  should  vest  in 
the  surviving  mortgagee.^ 

The  execution  of  the  trust  may  be  confided  to  one  person  alone, 
or  to  two  or  more  jointly,  or  to  two  or  more  jointly  and  severally. 
If  it  be  to  several  jointly,  all  must  act  in  the  execution  of  it ;  but 
if  it  be  to  them  severally,  or  to  either  of  them,  then  one  alone 
may  execute  the  trust.  The  deed  itself  is  the  authority  for  the 
execution  of  the  trust,  and  it  may  contain  such  provisions  about 
the  execution  of  the  trust  as  the  parties  see  fit  to  make.^  If  the 
trust  or  power  be  given  to  two  or  more,  it  is  joint  unless  there 
be  words  added  which  make  it  several  also,  or  which  show  the 
grantor's  intention  to  confide  the  execution  of  it  to  any  number 
less  than  the  whole.  But  upon  the  death  of  one  or  more  of  several 
trustees,  under  a  deed  of  trust,  the  survivors  take  the  entire  legal 
estate,  and  may  execute  the  trust,  although  there  be  no  express 
provision  to  this  effect  in  the  deed.''  Upon  the  death  of  the  last 
trustee  the  title  vests  in  his  heir,  until  the  appointment  of  a  new 

1  Cushman  v.  Stone,  69  111.  516.  ^  Hind  v.  Poole,  1  K.  &.  J.  383  ;  1  Jur. 

2  Olds  V.  Cummings,  31  III.  188;  Mason     (N.  S.)  371. 

V.  York  &  Cumberland  R.  R.  Co.  52  Me.  «  Graeme  v.   Cullen,   23    Gratt.    (Va.) 

82.  266 ;  Taylor  t;.  Dickinson,  15  Iowa,  483. 

8  Wilson  V.  Troup,  2  Cow.  (N.  Y.)  195,  ^  Hannah  v.  Carrington,   18   Ark.  85  ; 

331;   White   v.    Watkins,    23    Mo.    423;  Franklin  v.   Osgood,  14    Johns.   (N.   Y.) 

Powell  V.   Tuttle,  3   Comst.   (N.  Y.)   396.  527. 

*  Townshend  v.  Wilson,  3  Mad.  261. 
632 


REVOCATION   OR   SUSPENSION    OF   THE   POWER.       [§§  1791,  1792. 

trustee  b}'  the  court.^    The  estate  is  generally  regarded  as  vesting 
in  the  new  trustee  by  the  appointment  without  a  conveyance.^ 

1791.  A  first  and  second  mortgagee  may  concur  in  a  sale. 
In  a  case  where  this  course  was  pursued  objection  was  taken  that 
the  title  under  such  sale  was  not  marketable,  because  it  was  not 
clear  under  which  power  the  property  had  been  sold ;  but  the 
Master  of  the  Rolls  said  that  as  either  mortgagee  alone  might 
have  sold  under  his  power,  tliere  was  no  reason  why  they  could 
not  combine  together  and  sell.^ 

A  trustee  holding  two  deeds  of  trust  executed  by  the  same  per- 
son for  the  benefit  of  the  same  creditor,  each  deed  being  for  an 
undivided  half  of  the  land,  should  sell  the  whole  together  under 
both  deeds,  and  not  an  undivided  half  under  each  deed  at  different 
times,  as  the  presumption  is  that  the  property  would  command  a 
better  price  if  sold  entire.'* 

4.   Revocation  or  Suspension  of  the  Poiver. 

1792.  The  death  of  the  mortgagor  does  not  revoke  a  power 
of  sale,*^  This  being  coupled  with  an  interest  in  the  estate  cannot 
be  revoked  or  suspended  by  the  mortgagor.  Of  course,  after  his 
death  tlie  power  cannot  be  exercised  in  his  name,  but  the  author- 
ity to  execute  it  in  the  name  of  the  grantee  continues.  The  exe- 
cution of  the  power  is  the  grantee's  act  by  virtue  of  the  power. 
It  is  not  a  mere  power  of  attorney .^  In  Texas,  although  the  gen- 
eral principle  is  recognized  that  such  a  power  cannot  be  revoked, 
yet  the  exercise  of  it  is  regarded  as  inconsistent  with  the  statutes 
respecting  the  settlement  of  the  estates  of  deceased  persons,  which 
require  liens  upon  tiieir  property  to  be  enforced  in  the  probate 

1  Groenlcaf  v.  Queen,  1  Peters,  138;  (Mass.),  389  ;  Bergen  r.  Bennett,  1  Caines 
Mauldin  v.  Armistead,  14  Ala.  708.  (N.  Y.)  Cas.  1. 

2  Duffy  t;.  Calvert,  fi  Gill  (Md.),  487;  «  Strother  v.  Law,  54  111.  413  ;  Collins 
Go88  V.  Sintjlcton,  2  Head  (Teiin.),  G7  ;  v.  Hopkins,  7  Iowa,  4C3;  Berry  i'.  Skin- 
Gil)b8  V.  Marsh,  2  Met.  (Mass.)  243,  253.  ncr,  30   Md.    567  ;  Hyde  v.    Warren,   46 

8  McCarogher   v.   Whieldon,  34    Beav.  Miss.   13,  29  ;  Boattie  v.  ButKr,   21   Mo. 

107.  313;  Dc  Jarnette  v.  l)e  Givervillc,  56  Mo. 

*  CofTman  v.  Scoville,  86  111.  .300.  440,  448 ;    Bradley  v.  Chester  Valley  It. 

(•  Wright  V.  Hose,  2  S.  &  St.  323  ;  Cor-  II.  Co.  36  Pa.  St.   141,  151  ;  Bell  v.  Twi- 

dor  V.    Morgan,    18    Vcs.   344;    Hunt   v.  light,  2   Fost.  (N.    H.)    500.     See   ManB- 

Rousmanier,   8    Wheat.    174;     2    Mason,  field  i;.  Mansfield.  6  Conn.  5i>9,  for  a  case 

244;    Connors  v.  Holland,  113  Mass.  50;  of  a  naked   power  from  a  debtor  to   cred- 

Varnum    v.   Me.servc,   8    Allen    (Mass.),  itor. 
158 ;    Brewer    v.    Wincheatcr,    2    Alloa 

638 


§§  1703,  1794.]     ro\Yi:u  of  sai.k  moimxjagks  and  trust  dekds. 

court.  TluM-t'foiv,  upon  the  death  of  the  mortgagor  or  grantor  in 
a  trust  ili'i'il,  or  of  a  purchaser  from  either,  while  holiling  the 
equity  of  redemption,  the  power  cannot  be  exercised.^  It  then 
secures  tlic  creditor  priority  over  such  claims  against  the  debtor's 
estate,  as  by  the  statute  he  is  entitled  to  in  tlie  due  course  of  ad- 
ministration. Expenses  of  last  sickness,  of  administration  and 
management  of  the  estate,  allowances  in  lieu  of  homestead  and 
other  property  exempt  from  forced  sale,  and  the  homestead  right 
itself,  though  released  by  the  wife  in  the  )nortgage,  take  prece- 
dence of  the  mortgage  debt.^  A  mortgage  or  trust  deed  may  thus 
become  of  no  value,  and  is  a  security  that  does  not  secure. 

1793.  The  insanity  of  the  mortgagor  cannot,  of  course  have 
any  greater  effect  in  revoking  or  suspending  the  power  of  sale 
than  his  death  would  have.^  Neither  does  an  application  by  a 
guai'dian  or  committee  of  the  lunatic,  for  an  order  to  sell  the  mort- 
gaged premises  for  the  benefit  of  his  creditors,  have  any  effect  to 
deprive  the  mortgagee  of  this  summary  means  of  realizing  his 
claim.*  Of  course,  if  tlie  mortgagee  or  any  one  else  takes  an  un- 
just and  improper  advantage  of  such  condition  of  the  mortgagor, 
this  will  be  ground  for  setting  aside  the  sale.^ 

Neither  does  the  bankruptcy  of  the  mortgagor  affect  the  mort- 
gagee's authority  to  execute  the  power  either  in  the  mortgagor's 
name  and  as  his  attorney,  or  in  the  mortgagee's  own  name ;  for 
the  assignee  takes  subject  to  the  rights  of  the  mortgagee.^ 

1794.  Rule  is  the  same  in  those  states  where,  by  statute  or 
adjudication,  a  mortgage  is  regarded  as  a  mere  security  for  debt, 
passing  no  title  or  estate  to  the  mortgagee  ;  the  power  of  sale  is 
coupled  with  an  interest  and  is  irrevocable,  just  the  same  as  it  is 
where  the  common  law  doctrine,  that  the  mortgage  conveys  the 
legal  estate,  still  prevails.'^ 

1  Robertson  v.  Paul,  16  Tex.  472;  *  Berry  t;.  Skinner,  30  Md.  567;  Davis 
Buchanan  v.  Monroe,  22  Tex.  537.  v.  Lane,  10  N.  II.  156. 

2  McLane    v.   Paschal,   47    Tex.   365 ;         ^  Encking  v.  Simmons,  supra. 

Batts  V.  Scott,  37  Tex.  59.     The  allow-  ^  n^w  ,;.  Bliss,   118  Mass.  554;    Dixon 

ance  for  homestead  is  not  to  exceed  $5,000.  v.  Ewart,  3  Meriv.  322 ;  Story  on  Agency, 

Thompson  on  Homesteads,  §  611.     See,  §482. 

also,  §§  324-328  of  same.  No  reliance  "^  Calloway  v.  People's  Bank  of  Belle- 
should  be  placed  upon  a  mortgage  or  deed  fontaine,  54  Ga.  441  (1875).  In  this  case 
of  trust  upon  property  in  this  state  under  this  subject  is  ably  considered  by  Mr.  Jus- 
its  present  laws,  tice  McCay :  "A  blended  system  of  law 
8  Encking  v.  Simmons,  28  Wis.  272.  and  equity  makes  of  a  mortgage  what  it, 

in  fact,  is  in  practice,  notwithstanding  the 

634 


REVOCATION   OR   SUSPENSION   OF   THE   POWER.         [§  1795. 

1795.  A  power  may  be  modified  and  extended  vnthout  re- 
voking it.  A  mortgage  deed  contained  a  power  of  sale  providing 
that  if  default  should  be  made  in  payment  of  the  interest,  or  any 
part  of  it,  for  a  month  after  it  became  due,  or  in  the  payment  of 
the  principal  on  the  appointed  day,  then  the  mortgagee  might 
sell.  After  it  became  due  he  called  for  payment,  and  the  mort- 
gagor arranged  with  other  parties  for  a  loan  of  the  money  upon  an 
assignment  of  the  mortgage,  which  was  executed  with  a  recital 
that  in  the  mortgage  "  a  power  of  sale  is  contained  for  the  better 
securing  of  the  principal  sum  and  interest,  but  the  said  power  has 
not  been,  and  is  not  intended  to  be,  exercised,"  and  reciting  the 
calling  in  of  the  mortgage  moneys  and  the  mortgagor's  arrange- 
ment with  the  assignees  to  loan  the  amount.  The  assignment, 
■which  was  by  an  indenture  executed  by  all  the  parties,  confirmed 
the  moneys  "  and  all  powers  and  remedies  for  recovering  the  same 
sums  respectively,"  and  conveyed  the  estate  in  fee  subject  to  re- 
demption. The  time  of  payment  was  extended  seven  years,  and 
the  assignees  covenanted  that  no  sale  should  be  made  without 
three  months'  notice.  There  was  a  power  of  sale  to  arise  upon 
default.  On  account  of  intervening  incumbrances  it  was  desirable 
on  a  subsequent  default  to  sell  under  the  power  in  the  original 
mortgage  rather  than  that  in  the  assignment.  It  was  held  that 
the  recitals  were  not  intended  to  extinguish  the  original  power, 
but  only  to  modify  and  postpone  the  exercise  of  it;  and  that  a 
sale  could  be  made  under  it.^ 

formal  rules  of  law.  Neither  this  court  treat  a  mortgage  as  only  a  security,  and 
nor  the  Code  has  said  that  the  mortgagee  uniformly  recognize  the  jiroperty  to  belong 
has  no  interest.  The  language  is,  it  to  the  mortgagee,  that  the  whole  doctrine 
passes  no  title.  This  was  true  in  etiuity  of  powers  to  sell  attached  to  a  mortgage, 
in  England,  and  yet  a  mortgagee  was  con-  is  expounded  and  announceil."  In  a  pre- 
stantly  recognized  as  having  an  interest,  vious  case  in  the  District  Court  of  the 
and  an  interest,  too,  in  the  land.  So  far  as  United  States  for  Northern  Georgia,  Lock- 
that  interest  was  concerned,  he  was  treated  ett  V.  Hill,  1  Woods,  5.52  (187."}),  the 
as  a  purcliaser.  and  not  as  a  general  cred-  judge,  in  view  of  the  Code  and  decisions  of 

itor,  even  by  judgment We  see  noth-  the  state  that  a  mortgage  jiasses  no  title, 

ing  in  this  declaration  of  the  Code,  that  a  and  is  only  a  security  for  a  d.bt,  argued 

mortgage  is  only  a  security,  that  negatives  that  the  power  of  sale  is  not  coupled  with 

the  idea  that  a  power  of  sale  in  a  mortgage  an  interest,  but  is  a  colhiteral   power  only, 

is  a  power  coupled  with  an  interest.     The  and  expires  with  the  life  or  bankruptcy  of 

two  ideas  are  just  as  consistent  and  liar-  the    mortgagor.      The    argument    seems 

monious  as  the  idea  of  the  English  cliun-  forced. 

eery  court,  as  to  the  nature  of  a  mortgage,  '  Boyd  r.  Petrie,  L.  11.  7   Ch.  App.  385. 

was  with  a  power  of  sale.     Indeed,  it  is  Though  in  Enghmd  it  is  usual  in  the  irans- 

mainly  in  chancery  courts,   ail  of  which  for  of  a  mortgage  to  provide  expressly  for 

635 


§§  170C),  1T1»7.]     rowKH  of  sale  mortgagivS  and  trust  defds. 

1796.  A  conveyance  by  the  mortgagee  of  a  part  of  the 
premises  is  no  waiver  of  his  right  to  soil  under  the  pow(n'.  A 
niortffacree,  under  a  mishiken  belief  that  lie  was  the  absolute 
ownei',  having  conveyed  a  part  of  the  mortgaged  premises  by  deed 
with  covenants  of  warranty,  was  held  nevtu'theless  to  possess  the 
right  to  foreclose  the  mortgage  under  a  power  of  sale,  because  his 
convevanee  did  not  amount  to  an  assignment  of  the  mortgage, 
and  the  purchaser  took  the  title  subject  to  the  mortgage.^  If  he 
should  himself  become  the  pui'chaser  under  the  power  of  sale,  he 
would  be  estopped  to  claim,  as  against  his  grantee  under  his  deed 
of  warranty,  the  land  so  conveyed  by  him.  A  conveyance  in  the 
same  way  of  the  whole  estate  would  doubtless  be  held  to  be  an 
assignment  of  the  mortgage  which  would  carry  with  it  the  power. 
Neither  does  a  mortgagee  waive  his  right  to  sell  by  an  entry  to 
foreclose,  and  the  taking  of  rents  and  profits  insufficient  to  pay 
the  debt.2  The  power  to  sell  generally  continues  so  long  as  the 
debt  remains  unpaid. 

1797.  The  pendency  of  a  bill  to  redeem  by  a  subsequent  in- 
cumbrancer would  not,  it  would  seem,  suspend  the  power  to  sell ;  ^ 
for  in  this  way  the  very  object  of  the  power,  which  is  to  afford  a 
speedy  remedy  without  the  delay  of  a  suit,  would  be  defeated. 
The  incumbrancer  may  protect  himself  by  purchasing  at  the  sale ; 
or  by  enforcing  his  claim  upon  the  surplus  proceeds  of  the  sale 
when  his  title  can  be  fully  investigated,  without  keeping  the  mort- 
gage creditor  waiting  for  his  money.  But  when  the  first  mort- 
gagee has  refused  a  tender  of  the  amount  due  on  his  mortgage 
from  a  subsequent  mortgagee,  who  thereupon  brought  a  suit  to 
redeem,  and  the  first  mortgagee  proceeded  to  sell  under  his  power, 
upon  a  2)rimd  facie  ease  that  the  subsequent  mortgagee  was  en- 
titled to  redeem,  the  first  mortgagee  was  restrained  from  assigning 
his  mortgage,  and  from  selling  under  it,  until  the  hearing  of  the 
case  on  the  bill  to  redeem.* 

The  power  of  sale  is  not  suspended  for  the  reason  that  the 
mortgagee  has  resorted  to  a  process  of  garnishment  to  collect  the 
mortgage  debt.     The  several  remedies  upon  a  mortgage  being 

the  continuance  of  the  power,  this  is  not  ^  Montague  v.  Dawes,  12  Allen  (Mass.), 

essential,  as  a  general  assignment  of  ail  397. 

covenants    and    securities   will    carry  it.  *  Adams  v.  Scott,  7  W.  R.  213. 

Yoang  V.  Roberts,  15  Beav.  558.  *  Rhodes  v,  Buckland,  16  Beav.  212. 
1  Wilson  V.  Troup,  2  Cow.  (N.  Y.)  195. 
636 


REVOCATION    OR   SUSPENSION   OF   THE   POWER.       [§§  1798,  1799. 

collateral  and  independent,  the  remedy  under  the  power  of  sale  is 
not  affected  by  any  other  proceeding  to  enforce  the  debt,  unless 
this  has  resulted  in  a  partial  or  complete  satisfaction  of  it.^ 

1798.  A  tender  of  the  amount  due  and  payable  upon  a 
mortgage,  after  breach  of  the  condition  and  before  the  sale, 
does  not,  according  to  the  rule  adopted  in  Massachusetts,  defeat 
the  right  to  sell  under  the  power,  because  the  right  to  sell  attaches 
at  once,  and  as  it  is  a  power  coupled  with  an  interest,  it  cannot  be 
revoked.  The  tender  is  merely  the  foundation  for  a  suit  in  equity 
for  redemption.  A  sale  under  the  power  after  a  tender  made  and 
not  accepted  transfers  the  legal  title  and  possession  ;  but  the 
mortgagor  may  preserve  his  right  to  redeem  against  a  purchaser, 
by  giving  him  notice  before  or  at  the  sale  of  the  tender.  Until 
he  is  restored  to  the  legal  right  of  possession  by  a  decree  of  court 
in  equity,  he  can  neither  maintain  nor  defend  a  writ  of  entry 
against  one  claiming  under  the  mortgage.  The  foreclosure  is 
complete  by  the  sale  nothwithstanding  the  tender.  And  unless 
the  mortgagor  proceeds  in  equity  to  redeem,  the  purchaser  is  en- 
titled to  possession  and  may  recover  it  by  a  writ  of  entry,  al- 
though he  purchased  with  full  knowledge  that  after  breach  and 
before  the  sale  the  mortgagor  tendered  the  whole  amount  due 
under  the  mortgage.^  If,  however,  a  tender  be  made  at  the  time 
stipulated  in  the  condition  of  the  mortgage,  the  right  to  sell  is 
thereby  defeated,  and  a  sale  would  be  void.^ 

1799.  A  different  rule  is  adopted  in  the  English  courts, 
and  in  some  of  our  state  courts,  which  hold  that  upon  a  tender  at 
any  time  before  the  sale  is  actually  made,  even  after  the  property 
has  been  put  up  at  public  auction,  the  mortgagee  is  bound  to  stop 
the  sale.*  If  the  mortgagee  refuses  the  tender  and  goes  on  with 
the  sale,  the  purchaser  having  knowledge  of  these  circumstances, 
the  court,  instead  of  leaving  the  mortgagor  to  his  remedy  by  bill 
to  redeem,  will  set  aside  the  sale.  In  other  similar  cases  the  court 
will  restrain  a  sale  and  allow  the  mortgagor  or  other  person  inter- 
ested in  the  equity  to  proceed  with  a  bill  to  redeem.     But  a  mere 

1  Benjamin  v.  Loughborough,  31  Ark.  S.  391  ;  Burnet  v.  Denniston,  5  Johni. 
210.  (N.  Y.)  Ch.  35  ;  Ciinicroii  v.  Irwiu,  5  Hill 

2  Cranston  v.  Crane,  97  Mass.  459  ;  and  (N.  Y.),  272,  276.  In  New  York  and 
gee  Montague  u.  Dawes,  12  Allen  (Mass.),  Michigan  the  lion  is  considered  as  dis- 
397.  charged  hy  the  tender,  «o  that  no  valid  sale 

3  §  886-893.  can  afterwardH  he  made  even  to  a  bondjide 
*  Jenkins  v.  Jones,  2  (iif.  99  ;  6  Jur.  N.     purchaser.     §  893. 

637 


§  1800.]       POWER   OF   SAI.K    MORTGAGES    AND   TRUST   DEEDS. 


oiler  \vitlu)ut  :in  actual  toiuler  of  the  amount  duo  is  not  sufficient 
to  prevent  a  sale  ;  and  the  tender  must  include  costs  as  well  as  in- 
terest.' A  tender  or  even  a  payment  in  full  of  the  debt,  so  long 
as  the  mortgage  remains  undischarged  of  record,  does  not  prevent 
the  making  of  a  valid  sale  under  the  power  to  one  who  purchases 
in  good  faith  without  knowledge  of  the  payment  or  tender.^ 

Where  it  is  provided  in  a  deed  of  trust  that  upon  any  default 
the  whole  amount  of  principal  and  interest  shall  be  due  forthwith, 
and  the  trnstt'o  may  thereupon  sell,  the  debtor  is  in  equity  en- 
titled to  have  proceedings  for  a  sale  stopped  upon  a  tender  to  the 
trustee  befoi-e  sale  of  the  amount  due  together  with  costs  accrued  ; 
and  if  the  trustee  proceeds  nevertheless  to  sell,  the  sale  may  be 
set  aside.^ 

1800.  The  power  is  not  suspended  by  reason  that  the  mort- 
gagor is  within  the  lines  of  an  enemy  at  war  with  his  country, 
if  he  voluntarily  absented  himself  from  home  and  became  an  alien 
enemy .^  The  publication  of  notice  in  accordance  with  the  power 
is  binding  and  effectual.  Upon  the  same  principle,  an  alien  en- 
emy who  has  voluntarily  absented  himself  from  home  may  be 
sued  in  the  state  of  his  former  residence,  and  is  bound  by  con- 
structive notice  in  the  same   manner  as  any  other  non-resident. 

his  residence  for  the  purpose  of  engaging 
in  hostilities  against  the  former,  he  can- 
not be  permitted  to  complain  of  legal  pro- 
ceedings regularly  prosecuted  against  him 
as  an  absentee,  on  the  ground  of  his  in- 
ability to  return  or  to  hold  communica- 
tion with  the  ])lace  where  the  proceedings 
are  conducted." 

That  the  existence  of  civil  war  did  not 
exempt  i)roperty  of  persons  residing  in  the 
rebel  states,  located  in  the  loyal  states,  from 
judical  process,  and  foreclosure  or  sale  un- 
der power  of  sale,  for  debts  due  to  citizens 
of  the  latter  states,  see,  also,  Washington 
University  v.  Finch,  18  Wall.  1  Central 
Law  Journal,  66  (1874);  De  Jarnette  v. 
De  Givervillc,  56  Mo.  440 ;  Martin  v. 
Paxson,  66  Mo.  260;  Harper  v.  Ely,  56  111. 
179;  Thomas  r.  Mahone,  9  Bush  (Ky.), 
Ill;  Crutcher  v.  Hord,  4  11).  360;  Sey- 
mour V.  Bailey,  66  111.  288;  Willard  v. 
Boggs,  50  111.  163  ;  Mixer  v.  Sibley,  53  111. 
61  ;  Hall  v.  Conn.  Mut.  L.  Ins.  Co.  68  111. 
357  ;  Bush  v.  Sherman,  80  111.  160. 


1  Whitworth  v.  Rhodes,  20  L.  J.  N.  S. 
105.  See  Grugeon  v.  Gerrard,  4  Y.  &  C. 
119. 

2  Elliott  V.  Wood,  53  Barb.  (N.  Y.) 
285;  Warner  v.  Blakeman,  36  lb.  501; 
affirmed  4  Keyes,  487  ;  Brown  v.  Cherry, 
38  How.  (N.  Y.)  Pr.  352  ;  56  Barb.  635. 
See,  however,  Lycoming  Ins.  Co.  v.  Jack- 
son, 83  111.  302. 

3  Whelan  v.  Reilly,  61  Mo.  565  ;  Flower 
V.  Elwood,  66  111.  438. 

*  Ludlow  t'.  Ramsey,  11  Wall.  581.  Mr. 
Justice  Bradley  said  :  "This  case  differs 
from  that  of  Dean  v.  Nelson,  10  Wallace, 
158,  decided  at  the  present  term.  In  that 
case  Nelson  and  his  wife  were  driven  out 
of  Memphis  by  a  military  order  and  were 
not  permitted  to  return,  and  the  proceed- 
ings to  foreclose  their  property  took  place 
during  their  enforced  absence.  The  other 
defendant.  May,  was  only  nominally  in- 
terested, and  had  always  been  within  the 
Confederate  lines.  But  if,  as  in  this  case, 
a  party  voluntarily  leaves  his  country  or 

638 


REVOCATION    OR   SUSPENSION    OF   THE   POWER.         [§  1800. 

The  late  civil  war  in  this  country  was  attended  with  all  the  con- 
sequences in  this  respect  that  an  international  or  public  war 
would  have  produced.  The  fact  that  a  mortgagor  was  so  situated 
within  the  enemy's  lines  that  he  could  not  receive  the  notice  of 
sale,  or  appear  in  response  to  it,  did  not  suspend  the  right  of  the 
mortgagee  to  enforce  payment  of  his  mortgage  in  accordance  with 
its  provisions.^  In  numerous  cases  it  would  be  equally  impossi- 
ble, for  other  reasons,  for  the  mortgagor  to  receive  notice  by  pub- 
lication. 

Aside  from  the  principle  above  stated  as  to  the  right  to  fore- 
close the  property  of  alien  enemies,  the  power  of  sale  in  a  mort- 
gage or  trust  deed  being  coupled  with  an  interest  and  irrevoca- 
able  may,  at  any  time  after  the  happening  of  the  contingency  in 
which  it  is  to  be  exercised,  be  executed  without  regard  to  the 
circumstances  or  disabilities  of  maker  of  it  at  that  tiine.^  Imme- 
diately upon  the  happening  of  that  contingency,  it  is  the  legal 
and  moral  right  of  the  creditor  to  have  the  power  of  sale  made  for 
his  benefit  executed.  The  notice  of  sale  required  by  the  power  is 
not  for  the  benefit  of  the  grantor  in  the  sense  of  a  notice  to  him 
of  the  sale  of  the  land  ;  for  if  that  were  the  case,  he  could  alto- 
gether defeat  any  sale  by  going  to  a  place  where  the  notice  could 

1  Dorsey  v.  Dorsey,  30  Md.  522.  After  Justice  Miller  said  :  "  The  debt  was  due 
the  decisiou  of  this  case  the  case  of  John-  and  unpaid.  The  obligation  which  the 
son  I'.  Robertson,  34  Md.  165,  came  before  trustee  had  assumed  on  a  condition  had 
the  court,  when,  in  consequence  of  the  dc-  become  absolute  by  the  presence  of  that 
cision  of  the  Supreme  Court  of  tiie  United  condition.  If  the  complainants  had  been 
States  in  Dean  v.  Nelson,  10  Wall.  158,  dead,  the  sale  would  not  have  been  void 

the  court  overruled  its  former  decision  in  for  that  reason If  they  had   been 

Dorsey  v.  Dorsey,  and  held  that  a  notice  in  Japan,  it  would  have  been  no  legal  rea- 

by  publication  to  the  mortgagor,  while  ab-  sou  for  delay Tlie  enforced  absence 

sent  in  the  Confederate  lines,  was  ineffect-  of   the  complainants,    if  it    be  conceded 

ual  to  bind  him,  and  that  the  sale  under  it  that  it   was   enforced,   does   not,   in   our 

was  void.     If    the   decision   in   Ludlow  v.  judgment,   afford  a   sufficient  reason   for 

Ramsey,    11   Wall.    581,    had    then    been  arresting  his  agent  and  the  agent  of  the 

made,   the    Supreme  Court    of   Maryland  creditor  in   j)erforniing  a  duty  which  both 

would  doubtless  have  adhered  to  its  former  of  them   imposed  on    him   before   the  war 

decision.  began."      In    the    latter    case,    Wagner, 

2  Washington  University  v.  Finch,  18  Judge,  said  :  "  So  fiir  as  the  authority  of 
Wall.  1  Central  Law  Journal,  CO  (1874);  the  trustee  was  concerned  to  go  on  and 
De  Jarnette  v.  De  Givervillc,  56  Mo.  440.  make  a  sale  of  the  j>roperty  in  satisfaction 
Both  of  these  eases  relate  to  sales  made  by  of  the  debt,  it  made  no  difrerence  whether 
trustees  under  powers  given  in  trust  deeds  tlie  grantors  were  in  ihe  Confederate  lines 
while  the  grantors  were  alien  enemies  in  or  in  the  jungles  of  India,  or  even  if  they 
the  rebel  states.     In  the  former  case  Mr.  were  dead." 

639 


§§  1801,  ISO'2.]     rowKR  of  salk  MOinoAOKs  and  trust  dkkds. 

not  roacli  him  ;  but  it  is  intiMult'il  rather  to  notify  the  coinniunity 
tliat  the  saK'  will  take  phu'e.  The  grantor  nuist  be  presumed  to 
know  that  he  is  in  ilefaiilt,  and  that  his  property  is  liable  to  be 
sold. 

/>.     When  the.  Exercise  of  the  Power  may  he  enjoined. 

1801.  Generally,  the  purpose  for  which  the  power  of  sale 
is  given  being  to  afford  an  additional  and  more  speedy  remedy 
for  the  recovery  of  the  debt,  the  mortgagor  is  by  his  contract 
bound  to  exercise  the  necessary  promptness  in  fulfilling  it ;  and 
cannot  complain  of  a  legitimate  exercise  of  the  power.^  If  in  any 
case  it  is  attempted  to  pervert  the  power  from  its  legitimate  pur- 
pose, and  to  use  it  for  the  purpose  of  oppressing  the  debtor,  or  of 
enabling  the  creditor  to  acquire  the  property  himself,  a  court  of 
equity  will  enjoin  the  sale,  or  will  set  it  aside  after  it  is  made.^ 
Of  course,  so  long  as  the  creditor  exercises  only  his  legal  right, 
although  this  be  contrary  to  the  wishes  and  interest  of  the  mort- 
gagor, the  court  will  not  interfere  to  enjoin  a  sale  ;^  and  as  will  l)e 
noticed  presently  more  at  length,  a  stronger  case  must  be  made  to 
call  for  such  interference  than  to  set  aside  the  sale  afterwards. 

1802.  Legitimate  exercise  of  power.  —  It  frequently  happens 
that  the  holder  of  a  mortgage  with  a  power  of  sale  is  requested  by 
the  mortgagor,  or  some  other  party  in  interest,  to  exercise  it  for 
the  purpose  of  effecting  a  sale  of  the  property ;  as  when  the  title 
subsequent  to  the  mortgage  has  become  complicated  by  attach- 

1  "  Such  a  power  as  this  may  no  doubt  only  to  that  which  is  the  legitimate  pur- 
be  used  for  puqjoses  of  oppression,  but  pose  for  effecting  which  the  power  was 
when  conferred,  it  must  be  remembered  that  conferred.  The  legitimate  purpose  for 
it  is  so  by  a  bargain  between  one  party  and  which  the  power  to  sell  in  this  defendant's 
another,  and  it  is  for  the  party  who  bor-  mortgage  deed  was  given  was  to  secure  to 
rows  to  consider  whether  he  is  not  giving  hira  repayment  of  his  mortgage  money, 
too  large  a  power  to  iiim  with  whom  he  If  he  uses  the  power  to  sell  which  he  gets 
is  dealing."  Per  Cottenham,  Lord  Chan-  for  that  purpose  for  another  purpose,  from 
cellor,  in  Jones  i».  Matthie,  1 1  Jur.  504.  any  ill  motive,  to  effect  means  and  pur- 

2  Davey  v.  Durrant,  1  De  G.  &  J.  53.5  ;  poses  of  his  own,  or  to  serve  the  purposes 
Robertson  v.  Norris,  1  Gif.  421  ;  .Jenkins  of  other  individuals,  the  court  considers 
V.  Jones,  2  Gif.  99  ;  Whitworth  v.  Rhodes,  that  to  be  what  it  calls  a  fraud  in  the  ex- 
20  L.  .J.  N.  S.  105  ;  Close  v.  Phijjps,  7  M.  ercise  of  the  power,  because  it  is  using  the 
&  G.  586.  power  for  a  purpose  foreign  to  the  legiti- 

"  Wherever  a  power  is  given,"  said  Sir  mate  purposes  for  which  it  was  intended." 

J.  Stuart,  v.  C,  in   Robertson  v.  Norris,  See  S.  C.  affirmed,  lb.  443. 

4  Jur.  N.  S.  155,  "  the  court  requires  that  ^  Jones  v.  Matthie,  supra. 
the  power   shall  be  exercised  with  a  view 

640 


I 


WHEN   EXERCISE    OF   POWER   MAY   BE   ENJOINED.       [§  1803. 

raents,  judgments,  or  other  liens,  so  that  it  is  not  practicable  to 
obtain  releases  from  all  persons  having  claims  upon  it ;  or  where 
a  sale,  except  under  the  power,  has  become  impracticable  because 
the  subsequent  liens  upon  it  are  greater  than  the  value  of  the 
property.  Sometimes  under  these  or  like  circumstances  a  default 
is  designedly  permitted,  in  order  to  make  the  power  exercisable 
and  to  cut  off  subsequent  incumbrances.  Doubts  are  sometimes 
expressed  about  the  validity  of  sales  made  on  such  request,  or 
with  the  knowledge  on  the  part  of  the  mortgagee  that  the  purpose 
is  to  get  rid  of  a  subsequent  lien  ;  but  it  is  conceived,  that  if  the 
power  is  fairly  exercised  according  to  its  terms,  there  is  no  impro- 
priety in  the  arrangement.  Certainly  there  is  no  such  objection 
as  to  give  occasion  for  the  interference  of  the  court  to  restrain  the 
sale  or  to  set  it  aside.  "  A  man  taking  that  which  belongs  to 
him,  by  means  of  the  security  which  he  has  contracted  for,  does 
not  act  improperly  in  so  doing,  merely  because  one  principal  rea- 
son for  his  calling  in  the  money  is  a  wish  to  benefit  another  per- 
son. The  case,  however,  might  be  different  if  it  were  part  of  the 
arrangement  that  the  mortgage  debt  should  be  again  lent  to  the 
purchaser."  ^ 

So  long  as  the  mortgagee  is  clearly  within  the  authorit}'^  given 
by  the  power,  an  intended  sale  will  not  be  restrained  altliough 
the  exercise  of  it  be  harsh  and  improvident.  The  grounds  for  in- 
terference by  injunction  must  be  very  strong,  and  must  show  that 
the  injury  likely  to  be  sustained  by  the  parties  interested  will  be 
irreparable,  or  that  a  clear  breach  of  trust  will  be  committed  by 
the  intended  sale.^ 

1803.  A  use  of  the  power  to  obtain  an  advantage  under 
another  mortgage  is  not  allowable.  Where  a  mortgagee  held 
two  mortgages  with  powers  of  sale  upon  the  same  propert}^  the 
subsequent  mortgage,  however,  being  of  an  undivided  interest, 
and  he  threatened  to  foreclose  under  the  first  mortgage  unless 
both  mortgages  should  be  paid,  upon  the  filing  of  a  bill  to  redeem 
from  the  first  mortgage,  and  the  payment  of  the  money  due  upon 
it  into  court,  he  was  enjoined  from  selling  under  that  mortgage  ; 
because  the  power  in  that  mortgage  only  existed  for  the  purpose 
of  securing  that  money,  and  tlie  mortgagee  could  not  be  allowed 

1  Dart's  Vendors  &  Purchasers,  5th  Bedell  r.  McClcllan,  1 1  IIow.  (N.  Y.)  Pr. 
ed.  p.  75.  172. 

2  Kerahaw  v.  Kalow,  1  Jur.  N.  S.  974 ; 

VOL.  II.  41  641 


§§  1S04-1807.]     rowKit  of  salk  morigages  and  trust  dekds. 

to  proooed  iiiidor  that  power  in  order  to  luvve  an  advantage  in  ob- 
taining the  money  dne  on  the  second  mortgage.^ 

1804.  Grounds  of  interference  must  be  alleged.  —  Courts  of 
equity  will  interfere  by  injunction  to  prevent  a  sale  under  a  power 
in  a  mortgage  or  trust  deed,  when  by  reason  of  fraud,  want  of 
consideration,  or  otherwise,  the  collection  of  the  debt  would  be 
against  conscience,  and  tlie  sale  would  work  a  great  and  irrepara- 
ble in  jury  .2  To  warrant  this  interference  the  complainant  must 
allege  specifically  the  grounds  on  which  the  application  is  based  ; 
general  statements  and  inferences  from  facts  are  not  sufficient. 
An  allegation  that  the  mortgagor  does  not  owe  the  note  described 
in  the  mortgage,  without  stating  why  he  does  not  owe  it,  is  not 
sufficient  to  warrant  the  relief.^  A  statement  that  the  proposed 
sale  will  materially  embarrass  and  injure  the  petitioner  is  only  a 
conclusion  of  his  own,  and  of  no  consequence  unless  the  facts 
are  stated  from  which  the  court  can  determine  what  the  injury 
will  be.-* 

1805.  The  court  will  enjoin  a  sale  only  when  the  petition- 
er's rights  are  clear,  or  free  from  reasonable  doubt.  He  must 
show  also  a  good  reason  for  asking  the  interference  of  the  court. 
He  must  show  that  the  mortgagee  is  about  to  proceed  in  an  im- 
proper or  oppressive  manner,  and  not  merely  that  he  mi^ht 
adopt  a  different  remedy.^  In  general  a  stronger  case  must  be 
presented  to  the  court  to  obtain  an  injunction  against  a  proposed 
sale  under  the  power,  than  to  obtain  a  decree  setting  it  aside  after 
it  is  niiule.*^ 

1806.  Payment  of  the  amount  justly  due  under  the  mort- 
gage must  be  tendered,  to  entitle  the  person  seeking  the  injunc- 
tion to  the  consideration  of  the  court.' 

1807.  When  the  mortgage  was  void  in  its  inception  on 
account  of  fraud,  undoubtedly  a  sale  under  the  power  may  be  en- 
joined. The  bill  in  such  case  must  clearly  disclose  the  fraud  and 
the  proof  clearly  substantiate  it.  Where  a  mortgage  by  a  corpo- 
ration was  of  doubtful  validity,  on  account  of  being  made  to  the 

1  Whitworth  v.  Rhodes,  20  L.  J.  N.  S.  '''  Kershaw  v.  Kalow,  1  Jur.  N.  S.  974. 
105.  ■^  Sloan   v.    Coolbaugh,    10    Iowa,   31  ; 

2  Montgomery  u.  McEwen,  9  Minn.  103.  Powell  v.  Hopkins,  38  Md.  1  ;  Vechte  v. 
8  Foster  i;.  Reynolds,  38  Mo.  553.  Brownell,  8  Paige  (N.  Y.),  212;  Meysen- 
*  Montgomery  v.  McEwen,  9  Minn.  103.     burg  v.  Schlieper,  46  Mo.  209. 

6  Bedell  y.  McClellan,  11  How.  (N.  Y.) 
Pr.  172. 

642 


I 


WHEN   EXERCISE   OF   POWER   MAY    BE   ENJOINED.       [§  1808. 

directors  themselves  on  their  own  vote,  a  sale  was  restrained  until 
a  hearing  of  the  case.^ 

But  the  application  must  be  made  by  the  mortgagor  upon  whom 
the  fraud  was  practised  in  obtaining  the  mortgage,  and  cannot  be 
made  by  a  purchaser  from  the  mortgagor  without  paying  the  en- 
tire debt,  although  the  holder  of  the  mortgage  had  taken  it  as  se- 
curity for  a  less  amount,^  or  although  he  had  taken  it  with  notice 
of  the  fraud. ^ 

There  may  also  be  an  injunction  against  the  execution  of  the 
power  by  reason  of  circumstances  arising  after  the  making  of  the 
mortgage,  in  consequence  of  which  the  execution  of  it  would  be 
inequitable ;  but  the  court  will  not  interfere  in  such  cases  except 
upon  strong  reasons.'*  The  fact  that  part  of  the  principal  of  the 
debt  has  been  paid  does  not  warrant  an  injunction  against  the 
sale,  unless  it  be  in  restraint  of  selling  more  than  enough  to  pay 
the  amount  due.^ 

1808.  Usury.  —  It  is  no  ground  for  enjoining  a  sale  under  a 
trust  deed  that  the  notes  secured  reserve  usurious  interest  or  in- 
clude it,  except  in  those  states  where  usury  renders  the  contract 
void.  The  trustee's  duty  to  sell  and  to  apply  the  proceeds  in  dis- 
charge of  the  debt  legally  due  remains  the  same.  If  he  should 
attempt  to  misapply  the  proceeds,  and  pay  on  account  of  usury 
what  was  not  legally  due,  the  court  would  then  interfere.^  Where 
usury  does  not  invalidate  the  mortgage,  a  sale  under  the  power 
will  not  be  enjoined  by  reason  of  it  unless  the  debtor  brings  into 
court  the  principal  and  the  legal  interest  due.'^  In  New  York, 
however,  where  usury  renders  void  the  contract,  a  power  of  sale 
in  a  usurious  mortgage  is  considered  void,  and  a  sale  under  it 
may  be  restrained.^  If  a  sale  be  actually  nuide  to  one  having 
no  notice  of  the  usury,  it  will  be  upheld  ;'-*  but  one  having  such 

1  SoathamptoD  Boat  Co.  v.  Muntz,  12  aniouiit   due,    less   the  usurious   interest. 
W.  K.  330.  ("iisiKiy  V.  Hosier,  II  Iowa,  242  ;  niul  .so  in 

2  Foster  ('.  Wif;htmnn,  123  Mass.  100.  Maryland:  Walker  v.  Cockey,  38  Md.  7.5. 

3  Fairfiild  v.  McAnhur,  l.-i  (J  ray  (.Mass.),  '  I'owell  v.  Hopkins,  38  Md.  1  ;  Walker 
526;  and  s(  e  §  1303.  i'.  Cockey.  38  Md.  7.5;  Casady  v.  Bosler, 

*  I'er  Griciic,  C  J.,  in  Frieze  v.  Chapin,     11  Iowa,  242. 

2  R.  I.  429,  432.  »   Hyland  v.  Stafford,  10   Barb.  (N.  Y.) 

*  Powell  V.  Hopkins,  38  Md.  1.  558  ;  Burnet  v.  Denniston,  5. Johns.  (N.  Y.) 
«  Tookc   I'.    Newman,  75  III.   215.     In     Cli.  35,  41. 

Iowa  it  seems  that  an  injunction  would  he  *  Jackson  v.  Henry,  10  Johns.  (N.  Y.) 
allowed  in  such  case  upon  tender  of  the     185. 

643 


§§  1800,  1810.]     rowKR  of  salk  mortgagks  and  trust  dkeds. 

iiotico  would  not  by  such  sale  aoquiro  any  title. ^  Neither  is  it  a 
grouiul  for  enjoining  a  sale  untler  a  power  that  the  mortgagee  in  his 
notice  claims  a  greater  amount  than  was  actually  and  legally  due.^ 
In  North  Carolina  it  is  declared  that  a  mortgagee  will  be  en- 
joined from  selling  when  there  is  any  suggestion  of  oppression 
arising  from  usury  or  the  like.^ 

1809.  Unconscionable  penalty.  —  It  has  been  said,  however, 
that  where  a  mortgage  and  note  provide  a  penalty  of  a  high  rate 
of  interest  after  maturity,  such  in  amount  that  a  court  in  equity 
would  give  relief  against  it  as  unconscionable,  that  the  proper 
course  is  to  obtain  an  injunction  restraining  a  sale  under  the  power 
until  the  amount  actually  due  can  be  ascertained  ;  because  if  a 
sale  is  allowed  to  be  had  under  the  power,  the  mortgagee  may  re- 
tain the  full  amount  of  the  debt  and  penalty,  and  the  mortgagor 
cannot  recover  back  any  part  of  it  by  action  at  law.  The  contract 
is  not  in  itself  illegal,  and  the  only  relief  against  it  is  upon  equi- 
table considerations.* 

1810.  A  want  of  notice  of  the  sale  is  no  ground  for  enjoin- 
ing it.  The  power  of  sale  generally  stipulates  that  it  shall  be 
exercised  only  after  giving  notice  by  advertisement  for  a  certain 
time  in  some  newspaper,  or  after  giving  some  other  prescribed 
notice.  In  several  states  the  notice  to  be  given  is  prescribed  by 
statute,  and  in  such  case  the  statute  must  be  followed  whatever 
may  be  the  provisions  of  the  power  in  this  respect.  In  either 
case  a  sale  made  without  the  proper  prescribed  notice  is  invalid, 
but  ordinarily  the  courts  will  not  interfere  to  restrain  a  sale  about 
to  be  made  without  such  notice.  The  purchaser  is  bound  to  know 
what  the  requirements  of  the  deed  or  of  the  statute  are  in  this 
respect,  and  to  see  that  they  have  been  complied  with  ;  ^  and  the 
mortgagor  and  others  interested  in  the  equity  may  redeem  all  the 
same  if  the  power  is  illegally  exercised.     Even  under  the  English 

1  Jackson  i'.  Dominick,  14  Johns.  (N.  bertson  v.  Lennon,  4  Minn.  51 ;  Banker  v. 
Y.)  4.35.  Brent,  4  Minn.  521. 

2  Armstrong  u.  Sanford,  7  Minn.  49.  *  Anon.  Mad.  &  Gel.  10.  A  provision 
The  rule  is  diflFerent  in  Iowa,  where  ap-  in  the  power,  that  the  purchaser  shall  not 
parentiy  an  injunction  would  i^e  granted  be  bound  to  inquire  into  the  existence  of 
upon  a  tender  of  the  amount  justly  due.  notice,  docs  not  protect  liim  against  his 
Stringham  v.  Brown,  7  Iowa,  33  ;  Sloan  actual  knowledge  that  there  was  no  notice. 
V.  Coolbaugh,  10  Iowa,  31.  Parkinson  v.  Hanbury,  1  Dr.  &  Sm.  143  ; 

3  Kornegay  v.  Spicer,  76  N.  C.  95.  2  De  G.,  J.  &  S.  450.     See,  also.  Ford  v. 
*  BidwelJ  V.  Whitney,  4  Minn.  76  ;  Cul-     Heely,  3  Jur.  N.  S.  1 1 16  ;  Forstcr  v.  Hog- 


644 


gart,  15  Q.  B.  155. 


WHEN   EXERCISE   IN   POWER    MAY    BE    ENJOINED.       [§§  1811-1813. 

statute,  which  provides  that  the  purchaser  shall  not  be  affected 
by  the  absence  of  such  notice,  and  that  the  mortgagor  may  have 
remedy  by  an  action  for  damages,  or  under  a  power  with  Hke  pro- 
visions, the  Court  of  Chancery  has  no  jurisdiction  to  restrain  a 
sale  of  which  no  notice  has  been  given. ^ 

1811.  Not  enjoined  to  allow  set-off.  —  Neither  will  a  sale 
under  a  power  be  enjoined,  in  order  that  the  mortgagor  may  be 
enabled  to  set  off  a  balance  which  may  be  found  in  his  favor 
upon  unliquidated  claims  in  controversy  between  him  and  the 
mortgagee ;  ^  nor  to  enable  the  mortgagor  to  prosecute  a  bill  to 
correct  an  alleged  error  in  the  amount  of  the  mortgage.^ 

1812.  Time  for  contribution  to  redeem.  —  It  is  no  ground 
for  suspending  a  sale  that  the  several  owners  of  the  equity  of  re- 
demption are  at  variance  as  to  the  proportions  which  they  shall 
contribute  for  the  redemption  of  the  mortgage  ;  though  the  court 
may,  upon  payment  into  court  of  a  sum  sufficient  to  indemnify 
the  mortgagee  against  loss,  grant  a  reasonable  postponement.* 

1813.  When  amount  of  debt  is  in  dispute.  —  In  an  early  case 
in  New  York  a  sale  was  enjoined  on  an  application  in  behalf  of 
an  infant  heir  of  the  mortgagor,  the  amount  due  upon  the  mort- 
gage being  in  dispute."  The  court,  however,  did  not  seem  to  con- 
sider that  the  case  afforded  any  equitable  ground  for  interference, 
further  than  to  subject  the  sale  to  some  restrictions  :  and  perhaps 
make  these  restrictions  only  because  the  defendant  consented  to 
them.  These  were  that  the  amount  due  should  be  computed  by 
a  master,  who  should  be  associated  with  the  mortgagee  in  making 
the  sale  ;  and  that  a  furtiier  notice  of  the  sale  should  be  given,  and 
that  only  so  much  of  the  land  should  be  sold  as  the  master  should 
deem  sufficient,  in  case  a  part  could  be  sold  without  prejudice. 
In  another  case  in  that  state  a  sale  was  enjoined  when  the  mort- 
gagee claimed  in  his  notice  a  larger  amount  than  was  actually 
due.^  Whether  these  would  be  grounds  for  enjoining  a  sale,  where 
there  is  no  statute  providing  that  only  so  much  of  the  property 
shall  be  sold  as  is  sufficient  to  satisfy  the  debt,  may  well  be 
doubted.    When  the  accounts  between  the  parties  are  complicated, 

1  Prichnrd  v.  Wilson,  10  Jur.  N.  S.  330.         ♦  Brinckerhoff  v.  Lansitifr,  4  Jolms.  (N. 

2  Frieze  v.  Chapin,  2  R.  I.  429  ;  and  bcc     Y)  Cli.  65. 

Robertson   i;.  Ho-,'.shea(l3,  3  Leigh  (Va.),         ''  Van  IJergcn  ;;.  Dcinarest,  4  Jolms.  (N. 
6C"  i  Kogcr  1;.  Kane,  .5  II).  006.  Y.)  Ch.  37.     See  §  1776. 

»  Outtrin   V.   Graves,    1  Barb.  (N.  Y.)         »  Cole  i».  Savage,  Clarke  (N.  Y.),  361. 


Ch.  49. 


645 


§§  1814-1810.]     rowKR  of  salf.  mohtqages  and  trust  deeds. 

ami  tlio  baluni'O  duo  uiulcr  the  mortgage  is  uncertain,  a  salo  may 
sometimes  be  enjoined,  until  the  equities  between  the  parties 
which  should  affect  the  amount  due  under  the  mortgage  are  set- 
tled, and  the  balance  due  can  be  ascertained.^ 

1814.  Where  one  purchased  land  subject  to  a  mortgage 
which  he  supposed  was  in  the  oomnion  form,  without  a  power 
of  sale,  and  would  require  three  years'  possession  by  the  mortgagee 
to  effect  a  foreclosure,  the  mortgage  having  been  made  the  same 
day  and  not  recorded,  a  sale  under  the  power  was  enjoined  upon 
his  ajjplication.  He  was  allowed,  however,  only  time  to  raise  the 
money,  and  not  the  three  years  in  which  to  redeem.^  It  is  con- 
ceived that  in  those  parts  of  the  country  in  which  power  of  sale 
mortgages  are  now  the  usual  and  common  form,  an  injunction 
would  not  now  be  granted  on  like  grounds. 

1815.  Clouding  title.  —  The  fact  that  the  sale  if  made  would, 
in  the  apprehension  of  the  petitioner,  result  in  clouding  his  title, 
is  not  such  a  threatened  injury  that  an  injunction  should  be 
granted  to  restrain  it.^  If  the  mortgagee  should  attempt  to  sell 
property  not  included  in  the  mortgage,  or  an  interest  greater  than 
the  moi'tgage  conveyed  to  him,  the  sale  would  be  of  no  effect  as 
regards  such  property  or  interest,  and  would  not  really  cloud  the 
title  to  it.^ 

1816.  The  insolvency  of  the  trustee  in  a  deed  of  trust  is  no 
ground  for  restraining  a  sale  of  the  property  upon  the  application 
of  the  grantor,  unless  it  is  shown  that  there  is  danger  that  the 
trustee  will  misapply  the  moneys  arising  from  the  sale.^ 

1817.  Scarcity  of  money  or  business  depression.  —  The  fact 
that  at  the  time  of  the  proposed  sale  under  a  mortgage  or  trust 
deed  money  is  scarce,  and  that  the  terms  of  sale  require  a  large 
cash  payment,  is  no  ground  for  an  injunction;^  nor  is  the  fact 
that  there  is  a  general  depression  in  business,  and  the  weather  in- 
clement at  the  season  of  the  year  of  the  proposed  sale.'' 

1  Kornegay  v.  Spicer,  76  N.  C.  95;  ^  Tooke  v.  Newman,  75  Illinois,  215. 
Capehart  i*.  Biggs,  77  N.  C.  261 ;  Purnell  Walker,  C.  J.  :  "  Insolvency,  or  the  want 
V.  Vaughan,  77  N.  C.  268.  of  large  capital,  by  no  means  implies   a 

2  Piatt  V.  McClure,  3  Wood.  &  M.  151.     want  of  integrity  or  business  capacity.    He 
2  Armstrong  v   Sanford,    7    Minn.   49,     may  have  these  in  the  highest  degree,  and 

per  Atwater,  J. ;  Montgomery  v.  McPlwen,  yet  be  poor." 

9  Minn.  10.3;  but  see  Hubbard  v.  Jasinski,  "  Muller  v.  Bayly,  21  Gratt.  (Va.)  521. 

46  111.  160.  •   Caperton  v.  Landcraft,  3  W.  Va.  540. 
*  Armstrong  v.  Sanford,  supra. 

646 


PERSONAL  NOTICE   OF   SALE.  [§§  1818-1821. 

1818.  A  referee  or  master  may  be  associated  with  the 
mortgagee  for  the  purpose  of  insuring  a  fair  sale,  or  a  sale  of 
only  enough  of  the  premises  to  satisfy  the  mortgage  debt ;  in- 
stead of  enjoining  a  sale,  where  there  is  apprehension  of  an  op- 
pressive or  improper  exercise  of  it.^ 

1819.  Recovery  back  of  money  paid  under  duress.  —  Besides 
these  remedies,  by  restraining  or  setting  aside  a  sale  improperly 
exercised,  in  case  a  mortgagor  is  obliged  to  pay  a  sum  not  prop- 
erly chargeable  to  him,  in  order  to  prevent  the  sale  of  his  property 
under  the  power,  he  may  recover  back  the  money  so  paid  in  a  suit 
at  law  ;  as,  for  instance,  where  a  mortgagee  would  not  stop  a  sale 
unless  the  mortgagor  would  pay  an  extortionate  sum  for  expenses 
then  incurred  in  the  proceedings  to  sell,  and  the  mortgagor  paid 
the  amount  under  protest.^ 

1820.  Mortgagee's  damages  and  costs  when  wrongfully  en- 
joined. —  When  wrongfully  enjoined  the  mortgagee  is  not  only 
entitled  to  the  usual  taxable  costs  and  counsel  fees,  but  also,  when 
the  sale  does  not  yield  enough  to  satisfy  the  debt,  to  interest  on 
it  while  the  collection  of  it  was  suspended,  and  to  the  value  of 
the  emblements  removed  by  the  owner  in  the  mean  time.^ 

6.  Personal  Notice  of  Sale. 

1821.  No  notice  at  all  is  necessary  unless  made  so  by  stat- 
ute, or  by  the  power  itself ;  *  the  sale  may  be  private.^  When 
that  provides  only  for  a  pubHshed  notice,  this  is  all  that  any  one 
interested  in  the  property  is  entitled  to,  unless  there  be  an  agree- 
ment for  an  express  notice.^  In  no  case  is  an  actual  personal 
notice  of  the  sale  to  the  mortgagor  necessary  unless  this  is  pro- 
vided for  in  the  mortgage,  or  lias  been  promised  in  some  other 
way.^     When   the  power  authorizes  a  sale,  either  by  public  auc- 

J  Van  Bergen  v.  Dcmarest,  4  Johns.  (N.         *  Davey  v.  Durrant,  1   Do  G.  &  J.  .M.^. 

y.)  Ch.  37.  The  power  in   this  case  authorized  a  sale 

2  Close  V.  Phipps,  7  M.  &  G.  586.    Tin-  cither  by  public  sale  or  private  contract, 
dal,  C.  J. :  "  The  money  was  obtained  by         ^  Mowry  v.  Sanborn,  G8  N.  Y.  1.5;},  160, 

what  the  law  would  call  duress ;  as  the  per  Andrews,  J. ;    Martin  v.  Paxson,  66 

plaintiff  was  obliged  either  to  pay  it  or  Mo.  260,  266,  per  Hough,  J. 
to  suffer  her  estate  to  be  sold,  and  incur         •■'  Dyer   v.    Shurtleff,    112   Mass.    165; 

the  expense  and  risk  of  a  bill  in  equity."  Hurt  i;.  Kelly,  4.3  Mo.  238. 
And  see  Vechte  v.  Brownell,  8  Paige  (N.         ''  Princeton  Loan  &  Trust  Co.  v.  Mun- 

y  )   212.  son,  60  III.  371.      "The   debtor  himself 

»  Aldrich  v.   Reynolds,  1  Barb.  (N.  Y.)  here  prescribed   the  kind  of  notice  which 

CJ,  613  should  be  given  in  case  of  sale  :  it  was  not 

G47 


§§  1822-1825.]     rowKR  ok  salk  mortgages  and  thust  deeds. 

tion  or  privjito  contract,  the    inort»jjiigeo  may  sell  by  private  con- 
tract, without  making  a  previous  attempt  to  sell  by  auction.^ 

1822.  All  the  essential  requisites  of  the  power  must  be 
strictly  complied  with  ;  ^  and  when  there  are  statutory  provi- 
sions relating  to  the  notice  of  the  sale,  or  the  conduct  of  it,  these 
must  be  strictly  followed.  These  requirements  of  the  power  and 
of  the  statute  are  conditions  on  which  the  foreclosure  depends,  and 
if  not  fullilled  the  sale  is  void.^ 

Under  a  statute  or  power  requiring  the  service  of  notice  upon 
the  mortgagor  and  others  intei*ested  in  the  equity  of  redemption, 
a  sale  without  such  notice  does  not  bar  the  right  of  redemption  of 
a  person  entitled  to  it,  even  though  he  had  actual  notice  of  the 
sale.     He  is  entitled  to  the  legal  notice.^ 

1823.  When  the  notice  required  is  a  personal  notice  to  the 
mortgagor  or  his  assigns,  if  fairly  given  pursuant  to  the  power,  it 
does  not  matter  that  the  person  upon  whom  it  is  served  is  an  in- 
fant, or  is  insane,  or  under  any  other  disability.^ 

1824.  A  mortgagor  cannot  waive  notice  for  others.  If 
those  claiming  under  the  mortgagor  are  entitled  to  notice,  he  can- 
not waive  it  as  against  them  and  consent  to  a  sale.^ 

1825.  If  a  mortgagee  voluntarily  promises  the  mortgagor 
not  to  sell  under  the  power  without  notice  to  him,  there  being  no 
consideration  for  the  promise,  it  is  not  legally  binding  upon  him, 
and  he  may  sell  under  the  power,  or  assign  the  mortgage  to  others 
who  may  sell  without  giving  notice,  and  such  assignees  are  not 

personal   notice   but  notice  by  advertise-  the  parties  under  guardianship ;  and  more, 
ment  in  a  newspaper.     To  say  that  a  fur-  it  is  making  a  contract  for  them, 
tber  personal  notice  was  required  by  im-  ^  Davey  v.  Durrant,  I  De  G.  &  J.  535. 
plication  would  be  to  annex  a  condition  ^  Ormsby  y.  Tarascon,  3  Litt.  (Ky.)  404; 
to  the  power  of  sale  which  the  maker  of  Dana  v.  Farrington,  4  Minn.  433 ;  GibsoQ 
the  power  did  not  see  fit  to  provide,  and  v.  Jones,  5  Leigh  (Va.),  370. 
the  court  would  be  making  a  contract  for  8  Lqw  v.  Purdy,  2  Lans.  (N.  Y.)  422  ; 
the  parties  instead  of  enforcing  the  one  Cole  w.  Moffitt,  20  Barb.  (N.  Y.)  18;  Co- 
made   by  themselves."      Per  Mr.  Justice  hoes  Co.  v.  Goss,  13  Barb.  (N.  Y.)  137  ; 
Sheldon.  King  v.  Duntz,  11  Barb.  (N.  Y.)  191  ;  St. 
In    Capehart  v.   Riggs,  77  N,  C.  261,  John  i-.  Bumpstead,  17  Barb.  (N.  Y.)  100; 
Pearson,  C.  J.,  says  that  the  mortgagee  Van  Slyke   v.  Shelden,  9  Barb.  (N.  Y.) 
before  selling  ought  to  give  the  mortgagor  278. 

reasonable  notice  that  in  default  of  pay-  *  Root  v.  Wheeler,  12  Abb.  (N.  Y.)  Pr. 

ment  he  will  sell,  and   that  the  want  of  294. 

such  notice  is  ground  for  enjoining    the  '^  Tracey   v.  Lawrence,    2  Drew.  403  ; 

sale.     But  this  is  all  wrong.     It  is  taking  Robertson  v.  Lockie,  15  Sim.  285. 

6  Forster  v.  Hoggart,  15  Q.  B.  155. 

648 


PUBLICATION    OF  NOTICE.  [§§  1826,  1827. 

liable  to  action  for  depriving  the  mortgagor  of  his  equity  of  re- 
demption, even  if  they  obtained  the  assignment  by  fraud  and 
falsehood. 1  The  promise  of  the  mortgagee  would  not  bind  his 
assignee  who  had  no  knowledge  of  it.  But  a  sale  by  the  person 
who  made  such  promise,  without  giving  the  promised  notice,  would 
be  set  aside  unless  a  bond  fide  purchaser  had  acquired  title  by  re- 
ceiving a  deed  before  any  proceedings  to  set  the  sale  aside  were 
begun.  If  a  mortgagee  has  promised  a  junior  mortgagee  or  any 
one  claiming  under  the  mortgagor  that  he  will  notify  him  if  he 
should  wish  to  enforce  the  mortgage,  or  that  he  will  give  him  an 
account  of  his  claim,  his  entry  and  foreclosure  without  such  special 
notice  is  fraudulent,  and  the  right  to  redeem  remains  open  to  such 
party  until  the  stipulated  notice  is  given  or  account  rendered,  the 
property  remaining  in  the  hands  of  the  mortgagee  who  promised 
to  give  such  notice. ^ 

1826.  Neglect  to  give  notice  may  be  ground  for  setting 
aside  a  sale.  Where  the  owner  of  the  equity  of  redemption  gave 
money  to  the  mortgagor  to  pay  an  instalment  of  interest,  but  the 
mortgagor  did  not  pay  it  over  to  the  mortgagee,  and  the  owner 
being  informed  that  the  mortgagor  had  not  paid  the  interest,  sent 
word  to  the  mortgagee's  attorney  that  if  the  mortgagor  did  not 
pay  the  interest  he  would,  and  the  mortgagee  afterwards,  without 
giving  notice  to  tlie  owner,  sold  the  estate,  although  the  mortgagee 
acted  in  good  faith  and  in  exact  conformity  to  the  provisions  of 
the  mortgage,  and  sold  the  estate  to  a  purchaser  who  in  good  faith 
was  the  highest  bidder  at  the  sale,  no  deed  having  been  delivered, 
the  sale  was  set  aside  in  equity  on  the  ground  that  after  it  became 
evident  that  the  mortgagor  would  not  pay,  notice  should  have  been 
given  to  the  owner.^ 

7.  Publication  of  Notice. 

1827.  The  notice  usually  required  in  powers  of  sale  is  a  pub- 
lication for  a  certain  length  of  time  in  one  or  more  newspapers 
published  in  the  county  in  which  the  premises  are  situate.  As 
will  be  seen  by  reference  to  the  statutes  relating  to  power  of  sale 
mortgages,  the  substance  of  the  notice  and  tlie  manner  of  giving 

»  Randall  v.  Hazclton,  12  Allen  (Mass.),  Williams,  42  Mo.  18  ;  Clarkson  v.  Crecly. 

412.  40  Mo.  114;  S.C.  35  Mo.  95. 

2  Hull  V.  CiiBhmnn,  14  N.  II.  171 ;  Green  »  Drinan  v.  Nichols,  115  Mass.  353. 
V.  Cross,  45   N.   H.   574  ;    Uutherford    v. 

649 


§  1S28.]      POWER   OF   SALE   MORTGAGES   AND   TRUST    DEEDS. 

it  are  prescribed  in  several  states  ;  and  wliere  this  is  the  case  the 
requirements  of  the  statute  must  be  strictly  followed,  whatever 
may  be  the  terms  of  the  power.  The  power  may  impose  addi- 
tional obligations,  but  cannot  take  away  any  of  those  imposed  by 
statute ;  as,  for  instance,  a  private  sale,  though  expressly  author- 
ized by  the  mortgage,  would  not  bar  the  equity  of  redemption 
when  a  sale  at  public  auction  after  giving  specified  notices  is  re- 
quired by  statute.^  It  has  been  held  that  a  foreclosure  according 
to  the  statutory  requirement  is  valid,  even  when  the  power  im- 
poses additional  requirements.^  In  the  absence  of  statutory  re- 
quirements, the  kind  of  notice,  the  place  M'here  it  shall  be  given, 
the  time  when  it  shall  be  given,  and  the  duration  or  number  of 
publications  are  properly  subjects  of  contract  between  the  par- 
ties, and  their  agi-eement  is  binding  upon  them.^  The  parties 
may  agree  that  the  notice  shall  be  published  in  a  county  or  state 
other  than  that  in  which  the  land  is  situated:  or  they  may  agree 
to  dispense  with  notice  altogether. 

1828.  Statutes  regulating  the  foreclosure  of  mortgages 
have  no  application  to  mortgages  of  real  estate  situated  out  of  the 
state  where  the  statute  was  enacted.*  The  court  cannot  in  such 
case  interfere  with  or  control  a  sale  made  within  the  state,  accord- 
ing to  such  terms  as  the  parties  have  agreed  upon  in  the  power, 
unless  it  appears  that  these  terms  ai'e  contrary  to  the  statutes  or 
law  of  the  state  or  country  where  the  land  is  situated,  or  that 
there  is  some  illegality  in  the  proceedings  to  sell.  The  parties  to 
a  mortgage  have  the  power,  in  the  absence  of  any  statute  regula- 
tion, to  agree  upon  the  manner  in  which  the  property  may  be  sold 
to  realize  the  security.  Therefore,  a  sale  after  specified  notices  in 
the  city  of  New  York,  of  lands  situate  in  Colorado,  authorized 
by  mortgage,  cannot  be  restrained  by  the  courts  of  New  York 
as  being  in   conflict  with  the  statutes  of  that  state.     The  only 

1  Lawrence  i'.  Farmers'  Loan  &  Trust  time,  and  in  a  different  manner,  from  that 

Co.  13  N.  Y.  642.     A  doubt  has  been  ex-  required  by  statute,   would    not  be  suflS- 

pressed  whether  this  decision  should  be  cient.     Elliott   v.   Wood.    53   Barb.    285, 

extended  to  any  requirement  other  than  a  305  ;  45  N.  Y.  71. 

sale  at  public  auction;  whether  a  compli-  2  Butterficid  v.  Farnham,  19  Minn.  85. 

ance  with  the  statute  in  any  other  respect  ^  Martin  v.  Paxson,  66  Mo.  260. 

is    necessary ;   as,   for   instance,  whether  *  Elliott  v.  Wood,  45  N.  Y.  71  ;    Cen- 

compliance  with  a  provision  in  a  power  tral  Gold  Mining  Co.  v.  Phitt,  3  Daly  (N. 

that  the  notice  of  sale  shall  be  for  a  shorter  Y.),  263. 

650 


PUBLICATION   OF   NOTICE.  [§§  1829-1831. 

ground  of  interference  would  be  that  the  sale  provided  for  was  in 
conflict  with  the  laws  of  Colorado.^ 

1829.  Fairness  required.  —  In  giving  the  notice  the  mortgagee 
is  required  to  act  in  a  business-like  manner,  with  a  view  to  obtain 
as  large  a  price  as  he  reasonably  can  with  due  diligence  on  his 
part,  and  in  common  fairness  towards  the  mortgagor.^  So  far 
as  the  deed  leaves  any  matters  pertaining  to  the  exercise  of  the 
power  to  the  discretion  of  the  mortgagee  or  trustee,  a  fair  and 
honest  exercise  of  his  judgment  is  demanded.^ 

The  provisions  of  the  power  and  of  any  statute  regulating  the 
exercise  of  it  must  be  strictly  complied  with  ;*  but  at  the  same 
time  such  strictness  and  literal  compliance  should  not  be  exacted 
as  would  destroy  the  power  and  render  the  intended  security 
valueless.^  The  proceedings  may  be  regarded  as  ex  parte,  and 
the  mortgagor  may  be  divested  of  his  estate  without  his  knowl- 
edge and  without  his  consent  other  than  that  contained  in  the 
mortgage  itself.  But  under  a  statute  providing  for  a  certain  no- 
tice of  sale  in  case  the  parties  fail  to  provide  for  a  notice  in  the 
deed,  it  has  been  held  that  the  notice  prescribed  by  statute  may 
be  used  in  case  the  mode  of  notice  agreed  upon  in  the  mortgage  is 
impossible  ;  as  where  this  required  an  advertisement  every  other 
day  in  some  newspaper  published  in  the  county,  when  there 
was  no  paper  other  than  two  weekly  papers  published  in  the 
county.^ 

1830.  Burden  of  proof  as  to  notice.  —  When  the  validity  of 
a  sale  under  a  power  is  questioned  by  the  debtor,  on  the  ground 
that  the  advertisement  of  the  sale  was  not  made  in  pursuance  of 
the  deed,  the  burden  of  proving  a  proper  advertisement  rests  upon 
the  purchaser  or  other  party  insisting  upon  the  sale.'^ 

1831.  A  notice  of  sale  published  before  any  default  has 
occurred  in  the  condition  oi  the  mortgage;  is  inull'ectual  and  void, 
and  a  sale  under  it  would  be  invalid.  Equally  ineffectual  would 
be  a  publication  after  the  time  fixed  for  the  sale.  For  these  rea- 
sons it  has  been  necessary  to  determine  in  some  cases  when  a  pub- 
lication takes  place.     The  time  of  publication  and  the  date  of  the 

1  Carpenter  i>.  Black  Hawk  Gold  Miii.  Ilownrd,  16  Mich.  201  ;  Sherwood  r.Kcade, 
Co.  6.5  N.  Y.  4.3.  7  Hill  (N.  Y.),  4.31. 

2  Matthic  V.  Edwards,  2  Coll.  465  ;  Iloff-         ''  Waller  v.  Arnold,  71  111.  O.'iO. 

man  v.  Anthony,  6  R.  I.  282.  »  Warchimev.  Carroll  Co.  Build.  Assoc. 

"  In^lc  V.  Culht-rtson,  43  Iowa,  265.  44  Md.  512. 

*  Lee  V.  Mason,  10  Mich.  403  ;  Dojlc  v.         ^  Gibson  v.  JoncH,  5  Lei^h  (Va.),  370. 

651 


§  1882.]       POWER   OF   SALK   M0KTGA(1KS    AND   TRUST   DEEDS. 

pupor  are  not  always  or  nocossarily  the  same ;  and  in  the  case  of 
newspapers  pnblislied  weekly,  it  is  the  general  practice  to  issue  a 
portion,  at  least,  of  the  copies  printed  in  advance  of  the  date  of 
the  paper.  In  case  of  a  newspaper  dated  Saturday,  the  whole 
edition  of  which,  except  a  small  fraction,  is  either  delivered  by 
carriers  to  subscribers,  or  deposited  in  the  post-office  on  Friday, 
the  publication  is  undoubtedly  on  Friday.  Wiien  the  proprietor 
of  the  paper  sends  the  copjes  out  or  mails  them,  they  pass  beyond 
his  control  and  the  publication  is  complete.  The  fact  that  a  small 
portion  of  the  edition  is  not  issued  till  Saturday  is  not  material. 
It  is  not  necessary  that  a  notice  should  appear  in  every  copy  of 
the  whole  edition  regularly  printed  and  published  in  order  to  con- 
stitute a  publication.  In  such  case,  therefore,  if  Friday  be  the 
last  day  for  payment,  the  debtor  would  have  the  whole  of  the 
business  hours  of  that  day  in  which  to  make  payment,  and  the 
publication  would  be  in  advance  of  the  default,  and  would  be 
ineffectual  as  the  first  publication  of  the  notice.^  If  such  a  pub- 
lication before  default  is  one  of  the  requisite  number  of  publica- 
tions prior  to  the  time  appointed  for  the  sale,  a  subsequent  post- 
ponement of  the  day  of  sale  for  a  week  does  not  cure  the  defect, 
even  if  the  notice  be  again  published,  because  neither  the  notice 
fixed  for  the  day  of  sale  in  the  first  place,  nor  that  for  the  ad- 
joui-ned  day,  is  published  for  the  requisite  number  of  weeks  before 
the  sale. 2 

1832.  An  assignment  of  the  mortgage  after  the  first  ad- 
vertisement of  the  sale,  and  before  the  day  of  sale,  invalidates 
the  sale  if  the  assignee  continues  the  advertisement  and  sells 
under  it,  instead  of  advertising  anew  in  his  own  name.^  This  is 
upon  the  ground  that  by  the  assignment  the  mortgagee  ceased  to 
have  any  interest  in  the  mortgage ;  and  that  the  power  cannot 
be  separated  from  the  interest  in  the  land,  and  exercised  by  one 
having  no  interest  whatever  in  the  mortgage.  The  assignment, 
moreover,  vests  the  legal  interest  of  the  mortgage  in  the  assignee, 
and  the  power  necessarily  passes  with  it  unless  expressly  reserved. 
"  An  advertisement  in  the  name  of  the  mortgagee  in  this  case 
can  have  no  greater  force  or  effect  than  if  it  had  been  made  in 
the  name  of  a  third  person,  a  stranger  to  all  the  parties  in  inter- 
est, which  would  be  none  at  all."  * 

1  Pratt  V.  Tinkcom,  21  Minn.  142.  »  Niles  v.  Ransford,  1  Mich.  338. 

2  Tratt  V.  Tinkcom,  supra.  *  lb.,  per  Wing,  J. 

652 


PUBLICATION   OF  NOTICE.  [§§  1833-1835. 

1833.  Change  of  statute  as  to  length  of  notice.  —  It  is 
within  the  power  of  a  legislature  to  change  an  existing  law  which 
requires  the  notice  under  a  power  of  sale  to  be  published  for  a 
certain  length  of  time  before  the  sale,  by  providing  for  a  shorter 
time  of  publication,  and  such  a  law  is  not  unconstitutional  as  ap- 
plied to  mortgages  existing  at  the  time  of  its  passage.^  It  does 
not  impair  the  obligation  of  the  contract.  It  operates  upon  the 
remed}'  only,  and  it  does  not  in  such  operation  impair  or  take 
away  the  right  of  the  mortgagee  to  enforce  the  obligation.  The 
time  of  notice  might  be  lengthened,  and  the  remedy  rendered 
less  speedy  and  convenient  without  impairing  the  obligation.  If 
there  is  still  a  substantial  obligation  left,  that  is  sufficient. 

1834.  How  long  after  publication  sale  may  be.  —  In  the 
absence  of  any  express  provision  in  regard  to  the  time  at  which 
a  sale  shall  be  made  after  the  publication  of  the  notice,  the  sale 
must  be  within  such  a  reasonable  time  after  the  last  publication 
as  not  to  thwart  the  purpose  of  the  statute  ;  but  it  need  not  be 
within  the  week  following  the  last  advertisement.^  A  provision 
that  a  sale  may  be  made  after  a  certain  number  of  days'  notice 
does  not  limit  the  sale  to  the  day  immediately  succeeding  the  ex- 
piration of  the  time  named. ^ 

1835.  Selection  of  newspaper.  —  The  deed  of  trust  or  mort- 
gage usually  provides  for  the  publication  of  notice  of  the  sale 
in  some  newspaper  published  in  the  county  or  place  where  the 
property  is  situated.  No  particular  newspaper  being  designated, 
the  trustee  or  mortgagee  may  select  any  suitable  medium  for  the 
publication  at  his  discretion,  observing  the  general  requirement 
of  the  trust,  tiiat  he  act  in  fairness  and  in  good  faith.*  It  is 
not  requisite  that  he  should  select  the  paper  of  the  largest  cir- 
culation, or  of  any  particular  class  or  character.  A  publication 
in  a  law  and  advertising  journal  of  limited  circulation  has  been 
held  to  be  proper.^  No  proof  of  the  notoriety  or  extent  of  the  cir- 
culation of  the  paper  in  which  the  notice  was  published  is  required 
to  sustain  a  sale  under  it.'^ 

If  the  deed  does  not  prescribe  the  place  of  publication,  but 
leaves  this  to  the  discretion  of  the  trustee,  he  may,  in  a  fair  exer- 

1  James  v.  Stull,  9  Barb.  (N.  Y.)  482.  <•  Kellogg  v.  Carrico,  47  Mo.   157  ;  Bcn- 

2  Atkinson  i;.  Duffy,  16  Minn.  4.5.  kendorf  r.  Vincenz,  52  Mo.  441. 

'  IJeal  V.  Blair,  3.3  Iowa,  318.  o  St.  Joseph  Manufacturing  Co.  v.  Dag- 

*  Ingle  V.  Culbcrtson,  43  Iowa,  205.  gctt,  84  III.  556. 

653 


§§   l8ol)-18oS.]       rOWKR    OK    S.M.H    MORTGAr.KS    AND    TRUST    DEKDS. 

ciso  of  his  iliseivtion,  publish  notice;  in  a  newspaper  j)rinted  outside 
the  limits  of  the  state  in  whieli  the  land  is  situated.^ 

1836.  Publication  in  two  counties.  —  Where  the  deed  pro- 
viiled  that  notice  oi  sale  should  ho  given  "  by  advertisement  in 
some  newspaper  printed  in  St.  Louis  and  Franklin  County,"  and 
notice  was  given  only  in  a  newspaper  printed  in  the  latter  county, 
the  sale  was  declared  void.  The  deed  being  recorded,  the  pur- 
chiiser  had  notice  of  its  requirements,  and  was  bound  by  them.^ 
A  requirement  in  a  deed  of  trust  that  sixty  days'  notice  shall  be 
given  in  newspapers  published  in  Richmond,  Virginia,  and  in  the 
city  of  New  York,  must  be  fully  complied  with  to  effect  a  valid 
sale ;  and  the  fact  that  the  mortgagee  was  in  Virginia  where  the 
land  was  situated,  and  communication  with  New  York  prohibited 
on  account  of  the  pending  war,  is  no  excuse  for  failure  to  publish 
the  notice  as  required.^ 

1837.  Posting  in  public  places.  —  A  deed  of  trust  required 
notice  of  sale  to  be  posted  in  four  public  places  in  the  county,  and 
two  of  the  notices  were  posted  at  different  places  in  the  same 
town.  Objection  was  taken  that  the  town  was  but  one  public 
place ;  but  tlie  court,  without  admitting  that  there  was  anything 
in  the  objection,  held  that  it  could  only  be  availed  of  in  equity, 
and  not  in  an  action  at  law.*  Under  a  deed  which  provides  for  a 
sale  on  thirty  days'  notice  by  posting,  if  the  notices  have  been  put 
up  that  number  of  days  before  the  sale,  it  is  not  necessary  to  the 
validity  of  the  sale  that  the  notices  shall  remain  posted  all  the 
time  up  to  the  sale.^ 

A  provision  in  a  mortgage  that  the  mortgagee  might  sell  after 
having  advertised  the  sale  for  sixty  days  in  a  newspaper  published 
in  a  town  named,  "  by  posting  up  written  or  printed  notices  in 
four  places  in  the  county,"  was  construed  to  mean  that  the  notice 
might  be  given  in  either  mode,  the  word  b?/  being  evidently  a  mis- 
take for  or.'' 

1838.  Length  of  time  of  publication.  —  A  deed  of  trust  re- 
quired a  publication  of  the  notice  of  sale  for  five  consecutive  days, 
the  last  of  which  should  be  ten  days  before  the  sale.  The  last 
notice  was  on   the  eleventh  day   before  that  fixed  for  the  sale. 

'  Ingle  V.  Jones,  43  Iowa,  286.  ham  v.  Fitts,  5.3  Miss.  307,  it  was  held  that 

2  Thornburg  v.  Jones,  3G  Mo.  514.  there  was  nothin;?  in  a  kindred  objection. 

3  Bigler  v.  Waller,  14  Wall.  297.  ^  Graham  v.  Fitts,  .53  Miss.  307. 

*  Rice  V.  Brown,  77  111.  549.     lu  Gra-        «  Watson  v.  Sherman,  84  111.  263. 
654 


PUBLICATION   OF   NOTICE.  [§  1838. 

Upon  a  claim  that  the  last  insertion  should  have  been  on  the 
tenth  day  before  the  sale,  it  was  held  that  the  last  insertion  might 
be  more  than  ten  days  before  the  sale,  but  could  not  be  made 
within  a  less  time.^  A  longer  notice,  within  a  reasonable  limit, 
does  not  injure  but  rather  benefits  the  debtor. 

A  requirement  in  a  deed  of  "  thirty  days'  public  "  notice  in  a 
newspaper  is  satisfied  by  the  publication  of  notice  on  each  suc- 
cessive secular  day  in  a  newspaper  not  published  on  Sundays.^ 
A  requirement  of  publication  "  ten  days  before  the  sale  "  is  ful- 
filled by  publishing  a  notice  of  a  sale  to  be  had  on  the  thirteenth 
day  of  a  month,  on  the  second  day  of  that  month,  and  each  day 
thereafter,  except  Sunday,  although  there  are  only  nine  insertions 
of  the  notice.^  It  is  a  sufficient  compliance  with  a  requirement 
that  ten  days'  notice  of  the  sale  shall  be  given,  that  the  first  inser- 
tion of  the  notice  is  made  not  less  than  ten  days  before  the  sale. 
It  is  not  necessary  that  ten  days  shall  intervene  between  the  last 
insertion  and  the  day  of  sale.^  A  requirement  of  "  three  weeks' 
previous  notice  "  is  met  by  a  publication  once  a  week  for  three 
weeks,  and  does  not  render  necessary  the  publication  of  the  notice 
daily  for  three  weeks  previous  to  the  sale.^  A  sale  authorized 
after  "  first  giving  thirty  days'  public  notice  "  is  properly  adver- 
tised by  the  publication  of  a  notice  once  a  week  for  five  weeks, 
the  first  publication  being  more  than  thirty  days  before  the  sale.^ 
A  requirement  of  notice  in  a  newspaper  "  ten  days  before  the  day 
of  sale  "  would  be  satisfied,  it  would  seem,  by  a  single  publication 
ten  days  before  the  sale,  —  the  language  not  importing  a  continu- 
ous pul)licationJ 

Where  a  power  in  a  mortgage  requires  the  notice  of  sale  to  be 
published  "  once  each  week  for  three  successive  weeks,"  the  first 
publication  need  not  be  made  three  weeks  before  the  time  ap- 
pointed for  the  sale.^  And  so  in  New  Yoi'k,  where  publication 
for  twelve  weeks  successively,  at  least  once  a  week,  is  reipiired, 
the  publications  may  bo  made  in  less  than  eighty-four  days,  pro- 
vided there  be  a  publication  once  in  each  week  for  twelve  succes- 

1  Tooke  V.  Newman,  75  111.  215.  ^  Johnson  v.  Dorsey,  7  Gill  (Md.),  269. 

'  Kello^'g  V.  Carrico,  47  Mo.  157.  "  LetHcr  i;.  Arinsiroiij,',  4  Iowa,  482. 

«  Cushman  v.  Stone,  69  111.  516;  Weld  ^   Weld  v.  Ilces,  48  111.  428,  432. 

w.  IlecH,  48  111.  428  ;  St.  Joseph  Munufact-  "  Dexter  v.   Shejmrd,    117   Muss.  480; 

uring  Co.  v.  Daggett,  84  111.  556.  Frothiughiini  v.  Mareli,  1  Masa.  247. 

*  St.  Joseph  Manufacturing  Co.  v.  Dag- 
gett, sufira. 

655 


§§  1839,  1840.]     rowEK  of  salk  mortgages  and  trust  deeds. 

sive  weeks. ^     It  would  seem  tluit  the  lust  iidvertiseiuent  may  bo 
on  the  morning  of  the  day  of  sale.- 

8.    What  the  Notice  should  contain. 

1839.  The  advertisement  of  the  sale  should  fully  comply 
with  the  terms  of  the  power  ;  and  even  a  bare  literal  compli- 
ance is  not  enough.  It  must  give  with  clearness  all  reasonable 
information  about  the  proposed  sale.  It  should  appear  upon  the 
face  of  it  that  the  sale  is  to  be  made  by  virtue  of  the  power,  or 
for  the  purpose  of  foreclosure.^  It  should  show  that  a  default  has 
occurred  within  the  terms  of  the  mortgage;^  but  it  need  not  point 
out  for  what  particular  breach  of  condition  the  sale  is  to  be 
made.^ 

1840.  It  must  properly  describe  the  premises  and  the  in- 
terest to  be  sold  ;  and  if  the  description,  though  including  the  lot 
to  be  sold,  contains  double  the  area  of  the  lot  mortgaged,  the  sale 
will  be  void.^ 

If  the  sale  embraces  the  whole  of  the  property  mortgaged,  the 
description  should  conform  substantially  to  that  contained  in  the 
mortgage.  A  notice  which  states  nothing  as  to  the  quantity  of 
land  to  be  sold,  and  gives  no  metes  or  bounds  and  no  information 
whether  it  is  a  village  lot  or  a  farm,  is  insufficient.'^  It  is  usual 
and  proper,  besides  describing  the  premises  by  metes  and  bounds, 
to  refer  to  the  book  and  page  of  the  record  of  the  mortgage  deed 
and  to  give  the  date  of  it ;  but  if  the  premises  are  sufficiently 
described  in  other  respects,  an  error  in  the  refei'ence  to  the  record 
or  to  the  date  would  not,  it  is  conceived,  invalidate  the  notice. 
Even  where  by  statute  these  are  required  to  be  given,  a  notice 
referring  correctly  to  the  clerk's  office  where  the  mortgage  is  re- 
corded, and  to  the  date  of  the  record,  is  held  sufficient,  although 
it  mistakes  the  number  of  the  book  in  which  the  record  is  made.^ 

A  description  of  the  property  merely  by  reference  to  a  plat  or 

1  George  v.  Arthur,   2   Hun  (N.  Y.),        »  Leet  v.  McMaster,  51  Barb.  (N.  Y.) 
406;  Howard  v.  Hatch,  29  Barb.  (N.  Y.)  236  ;  Judd  v.  O'Brien,  21  N.  Y.  186, 190. 
297  ;  and  see,  as  to  judicial  sales.  Wood  v.         *  Bush  v.  Sherman,  80  111.  160. 
Morehouse,  45  N.  Y.  368;  aff'g  1   Lans.         ^  King  y.  Bronson,  122  Mass.  122. 
403;  Olcott  V.  Robinson,  21   N.  Y.   150;         6  Fenner  v.  Tucker,  6  R.  I.  551;  Hoff- 
rev'g  20  Barb.  148.  man  v.  Anthony,  6  R.  I.  282. 

2  Worley  v.  Naylor,  6  Minn.  1 92.    This         '  Rathbone  ;;.  Clarke,  9  Abb.  (N.  Y.)  Pr. 
decision  was  founded  on  a  statute.  66,  note. 

8  Judd  V.  O'Brien,  21  N.  Y.  186. 

6o6 


WHAT   THE   NOTICE   SHOULD   CONTAIN.       [§§  1841,  1842. 

deed  on  record  has  been  held  sufficient ;  ^  though  it  is  pi-obable 
that  such  a  description  would  not  generall}^  be  held  good.  The 
description  should  be  sufficient  to  apprise  the  mortgagor  and 
others  interested  in  the  land  that  the  land  to  be  sold  is  that  in 
which  they  have  an  interest ;  and  sufficient  to  enable  those  who 
may  wish  to  purchase  to  locate  and  identify  the  property,  though 
a  description  by  metes  and  bounds  is  not  always  necessary.^ 
When  a  portion  of  the  land  described  in  the  mortgage  has  been 
released  from  the  operation  of  it,  it  is  desirable  that  the  portion 
remaining  which  is  to  be  sold  should  be  described  by  metes  and 
bounds,  with  a  reference  to  the  mortgage  and  to  the  date  and  rec- 
ord of  the  release,  rather  than  that  the  premises  should  be  de- 
scribed in  the  same  manner  as  they  are  described  in  the  mortgage 
with  such  reference  to  the  release  made.  When  there  have  been 
many  releases,  so  that  the  part  to  be  sold  would  not  be  recognized 
at  all  by  the  description  given  in  the  mortgage,  a  description  of 
the  premises  to  be  sold  as  they  actually  are  is  all  the  more  desira- 
ble ;  and  a  reference  to  the  releases,  except  generally,  or  as  being 
the  property  not  before  released  of  record  from  the  operation  of 
the  mortgage,  is  not  important. 

If  the  description  of  the  premises  follows  that  in  the  mortgage 
a  change  in  the  street  number  of  the  building  since  the  mortgage 
was  made  does  not  invalidate  the  notice.^ 

1841.  Notices  of  distinct  lots  should  be  separate.  Several 
mortgages  or  deeds  of  trust  having  the  same  parties,  and  in  every 
way  alike  except  in  the  amounts  secured,  should  be  advertised 
separately,  if  they  cover  different  lots  of  land  ;*  if,  however,  the 
ditlerent  mortgages  are  upon  the  same  lot,  there  would  seem  to  be 
no  objection  to  publishing  them  together. 

1842.  Where  the  advertisement  gave  only  a  short  and  in- 
complete description  of  the  property,  and  did  not  state  the  name 
of  the  mortgagee  or  of  the  assignee  of  the  mortgage,  and  was 
signed  only  "per  order  of  the  assignee  of  said  mortgage,"  and  the 
place  of  sale  was  remote  from  the  premises  to  be  sold,  and  the 

1  Fitzpatrick  v.  Fitzpatrick,  6  R.  I.  G4.       different  lots   were  published    separately, 

2  JacksuQ  V.  Harris,  3  Cow.  (N.  Y.)  and  occupied  about  three  columns  of  a 
241.  daily  paper.     It  was  objected  that  the  no- 

*  Model  Lodging  House  Ass'n  v.  Uos-  lices  should  have  been  consolidated  into 
ton,  114  Mass.  1.33.  one,  but  tiic  court  allowed   costs  for  the 

*  Marsh  i;.  Morton,  75  III.  C21.     In  this  separate  notices. 
case  notices  under  nine  trust  deeds  upon 

VOL.  11.  4a  607 


§§  1848,  1844.]     rowr.R  of  salp,  mortga(~;ks  and  trust  dkkds. 

notice  was  iuellVctual  to  attract  purchasers,  the  sale  was  hi^ld  in- 
valid, and  the  mortgagor  allowed  to  redeem.^  "  With  such  a 
notice,"  say  the  court,  "  and  under  such  circumstances,  a  mort- 
gagee, who  is  authorized  to  sell  only  at  auction,  finding  himself 
to  be  the  only  bidder  at  the  sale,  cannot  in  good  faith  proceed 
with  the  sale  and  purchase  the  property  for  himself  at  his  own 
price,  and  insist  upon  such  a  purchase  as  precluding  the  mort- 
gagor from  all  right  to  redeem  the  property." 

1843.  The  notice  must  show  who  orders  the  sale  ;  and  if  it 
omits  to  itlentify  the  holder  of  the  mortgage,  and  is  signed  by 
no  one,  although  it  states  the  names  of  the  mortgagor  and  mort- 
gagee, and  refers  to  the  book  and  page  of  the  record  of  the  mort- 
gage, a  sale  under  it  will  be  invalid.-  In  Rhode  Island,  however, 
it  has  been  held  that  an  advertisement  is  sufficient  although  the 
mortgagee  was  not  named  in  the  notice,  and  that  was  signed  only 
in  the  words  "  by  order  of  the  mortgagee."  ^  But  the  same  court 
held  a  notice  to  be  fatally  defective  in  which  the  reference  to  the 
record  was  not  correctly  made,  and  neither  the  name  of  the  mort- 
gagor nor  of  the  mortgagee  nor  of  the  auctioneer  was  given,  and 
the  notice  was  not  signed  by  any  one.*  Under  a  statute  requir- 
ing that  the  notice  shall  specify  the  name  of  the  mortgagee,  it  is 
sufficient  that  the  notice  is  signed  by  him  and  contains  an  accu- 
rate reference  to  the  record.^  Upon  the  death  of  the  mortgagee, 
in  the  absence  of  any  bequest  of  the  mortgage,  the  legal  title 
vests  in  his  executor  or  administrator  ;  and  a  notice  signed  by 
the  executor  or  administrator,  with  the  word  "  executor"  or  "  ad- 
ministrator "  affixed,  sufficiently  discloses  his  interest  and  the 
source  of  his  title.** 

1844.  The  notice  of  sale  need  not  name  the  owners  of  the 
equity  of  redemption,  or  the  subsequent  mortgagees,  or  others 
who  have  acquired  an  interest  in  the  estate  from  the  mortgagor 
since  the  mortgagee's  title  accrued.^ 

1  Montague  V.  Dawes,  14  Allen  (Mass.),     Roche  v.  Farnsworth,  106  Mass.  509,  the 
369.  omission  to  name  those  who  had  acquired 

2  Roche  V.  Farnsworth,  106  Mass.  509.  interest  in  the  property  from  the  mort- 
8  Fitzpatrick  v.  Fitzpatrick,  6  R.  I.  64.  gagor  was  alluded  to  as  one  of  the  defects 
*  Hottman  v.  Anthony,  6  R.  I.  282.  of  the  notice;  but  the  decision  does  not 
^  Candee  v.  Burke,  1  Hun  (N.  Y.),  546.  rest  upon  that ;  the  fatal  defect  there  being 
*<  Bridenbecker  i;.  Prescott,  3  Hun  (N.  the  omission  to  name,  either  in  the  body  of 

Y.),  419.  the  notice  or  in  the  signature,  the  assignee 

"  Learned   v.   Foster,    117    Mass.   365;     of  the  mortgage  who  made  the  sale. 
Dyer  v.   Shurtleff,    112   Mass.   165.      la 
658 


WHAT   THE   NOTICE   SHOULD    CONTAIN.       [§§  1845-1847. 

1845.  It  must  specify  definitely  the  time  and  place  of  sule.^ 
A  notice  of  a  sale  advertised  to  take  place  in  February,  1858, 
though  the  sale  was  intended  to  be  made,  and  was  actually  made, 
in  1859,  was  fatally  defective.^  If  there  be  an  established  usage 
that  such  sales  shall  be  at  a  particular  place,  as,  for  instance,  the 
rotunda  of  the  city  hall,  a  notice  of  a  sale  to  be  made  at  the  city 
hall  would  be  sufficient.^  Under  the  Minnesota  statute  for  sale 
by  advertisement,  a  notice  of  sale  appointed  for  the  7th  day  of 
November,  1859,  without  naming  any  hour  of  sale,  does  not  nec- 
essarily render  the  sale  invalid.  It  is  an  irregularity  which  is 
not  allowed  to  overthrow  a  sale,  unless  seasonable  application  be 
made,  and  certainly  not  after  a  lapse  of  twelve  years  after  the 
time  of  sale.* 

1846.  If  the  power  makes  no  provision  as  to  the  time, 
place,  or  terms  of  sale,  or  the  manner  of  advertising  it,  and 
no  statute  regulates  the  proceedings,  the  mortgagee  or  trustee 
may  exercise  his  discretion  in  these  matters,  and  if  fairly  exer- 
cised the  sale  will  be  valid  ;  ^  though  it  would  be  a  safe  and  pru- 
dent course  to  pursue  the  mode  ordinarily  provided  for  in  judicial 
sales  ;  ^  and  a  court  of  equity  would  enforce  the  power  accoi'ding 
to  its  general  practice.  But  if  the  mortgage  provides  that  the 
mortgagee  shall  advertise  the  time,  place,  and  terms  of  sale  in  a 
prescribed  newspaper,  this  is  in  effect  an  authority  to  him  to  fix 
the  time,  place,  and  terms  of  sale  at  his  discretion.'^  If  the  deed 
or  mortgage  provide  that  the  sale  shall  be  made  on  or  near  the 
premises,  or  at  a  particular  place  in  a  town  or  city  named,  a  sale 
at  any  other  place  would  not  be  in  pursuance  of  the  power,  and 
would  be  invalid.^  But  if  it  merely  provide  that  the  sale  shall 
be  in  a  certain  town  or  city,  the  trustee  or  mortgagee  may  cause 
it  to  be  made  at  any  usual  or  convenient  place. 

1847.  Sale  fixed  for  Sunday.  —  The  proceedings  to  foreclose 
a  mortgage  are  not  void  because  the  day  specified  in  the  adver- 
tisement happens  on  a  Sunday.  The  court  in  a  New  York  case 
thought  that   a  sale   on   Sunday  might  not  be  prohibited  by  the 

1  Burnet    »;.    Dcnuiston,    5   Johns.    (N.         ''  (Jlcott  i\  Bynum,  17  Wall.  44. 
Y.)  Ch.  35.  0  Calloway  v.  People's  Bunk  of  Bille- 

*  Feinier  v.  Tucker,  6  li.  I.  .')5l.  fontaini-,  54  Ga.  441. 

8  IlDrnby  u.  Cramer,  12  How.  (N.  Y.)  ^  Calloway  v.  reople's  Hank  of   Ikllc- 

Pr.  4'JO.  fontaine,  supra. 

*  Menanl  v.  Crowe,  20  Minn.  448  ;  But-  *  Sec  Uicu  v.  Brown,  77  111.  549. 
terfield  v.  Farnliani,  I'J  Minn.  85. 

G59 


§§  1848,  1849.]     rowKR  of  salk  mortgages  and  trust  dkeds. 

statutes  of  that  state  ;  but  in  that  case,  the  mistake  being  discov- 
ered before  tlie  day  of  sale,  a  postponement  to  tlie  following  day 
was  made  and  advertised  before  the  day  fixed  for  the  sale  ;  and 
the  sale  on  the  following  day  was  held  to  be  regular.^ 

1848.  Sale  at  ruins  of  court-house  in  Chicago.  —  Under  a 
deed  of  trust  made  before  the  destruction  of  this  court-house,  pro- 
viding that  any  sale  under  it  should  be  had  at  the  north  door  of 
the  court-house,  a  sale  after  the  destruction  of  the  court-house 
may  be  made  on  the  ground  immediately  in  front  of  the  place 
where  the  north  door  was  at  the  time  of  the  execution  of  the 
deed.2  But  such  a  provision  in  a  mortgage  made  before  the  de- 
struction of  the  court-house  does  not  restrict  the  sale  to  the  site 
of  the  court-house  then  in  existence,  but  after  its  destruction  the 
sale  may  be  advertised  and  made  at  the  north  door  of  the  build- 
ing then  in  use  as  a  court-house.^ 

After  such  a  sale  has  been  had,  and  a  deed  is  given,  in  which 
it  is  recited  that  the  sale  was  in  due  form,  and  according  to  the 
terms  of  the  deed,  it  is  held  that  a  subsequent  purchaser  is  not 
bound  to  look  beyond  the  recitals  of  the  deed.* 

1849.  Under  a  deed  of  trust  providing  that  the  sale  shall 
take  place  at  the  "  court-house  door,"  a  sale  made  at  the  door 
of  a  building  temporarily  used  as  a  court-house,  while  repairs  are 
making  upon  the  court-house  building,  is  a  sufficient  compliance 
with  the  terms  of  the  deed.^  Where  a  deed  of  trust,  made  after 
the  destruction  by  fire  of  the  court-house  in  Chicago,  provided 
that  the  sale  should  be  made  "  at  the  north  door  of  the  court- 
house in  the  city  of  Chicago,"  and  the  county  courts  were  then 
held  in  a  portion  of  a  building  formerly  a  court-house,  but  which 
had  two  north  doors,  an  advertisement  of  a  sale  to  be  made  at 
one  of  those  doors  was  held  to  have  been  advertised  to  be  made 
at  the  place  designated  in  the  deed.*^  A  trust  deed  requiring  the 
sale  under  it  to  be  made  at  the  court-house  of  the  county  is  prop- 

1  Saylea  v.  Smith,  12  Wend.  (N.  Y.)  would  be  a  good  point  if  made  at  the  time 
57  ;  Westgate  v.  Handlin,  7  How.  (N.  Y.)  the  sale  took  place.  It  would  be  good 
Pr.  372.  ground  for  stopping  the  sale  before  rights 

2  Chandler  d.  White,  84  111.435;  Wal-  intervene;  but  I  doubt  if  a  purchaser 
ler  V.  Arnold,  71  111.  350.  would  be  absolutely  obliged  to  take  notice 

8  Alden  v.  Goldie,  82  111.  581  ;  Wilhelm  that  the  court-house  was  a  ruin." 
V.  Schmidt,  84  111.  183.  ^  Hambright  v.  Brockman,  59  Mo.  52. 

*  Long    V.    Rogers,   6   Biss.   416,    per         ^  Gregory  i;.  Clarke,  75  111.  485  ;  Alden 

Blodgett,  J. :  "I  am  inclined  to  think  that  i;.  Goldie,  82  111.  581. 

660 


WHAT    THE   NOTICE   SHOULD   CONTAIN.       [§§  1850-1852. 

erly  executed  by  a  sale  at  the  court-house  of  a  newly  organized 
county  which  includes  the  land  sold.^ 

1850.  Sale  at  city  hall.  —  A  notice  of  a  sale  to  be  made  at 
the  city  hall  in  the  city  of  New  York  was  held  to  specify  the  place 
of  sale  with  sufficient  definiteness,  inasmuch  as  by  common  usage 
the  rotunda  in  the  city  hall  proper  is  the  established  place  for 
such  sales.2  It  was  said  in  this  case,  however,  that  except  for  such 
usage  the  notice  would  be  too  indefinite,  as  all  the  buildings  used 
for  holding  courts  within  the  Park  are  deemed  in  law  the  city 
hall.  A  notice  which  designates  the  place  of  sale  as  "  at  the 
court-house,  in  the  city  of  St.  Paul,"  is  sufficient  to  uphold  the 
sale,  in  the  absence  of  any  evidence  of  fraud  or  unfairness,  or  act- 
ual or  probable  injury.^ 

If  the  place  of  sale  be  left  to  the  discretion  of  the  trustee  or 
mortgagee,  he  may  make  the  sale  at  a  place  outside  the  state  in 
which  the  mortgaged  lands  are  situated  ;  and  if  he  acts  with  fair- 
ness and  the  parties  interested  in  the  property  are  not  prejudiced 
thereby,  the  sale  will  be  sustained.* 

1851.  If  a  mistake  be  made  in  the  advertisemient,  such  as 
would  render  a  sale  under  it  irregular  or  voidable,  the  mortgagee 
may  waive  the  proceedings  and  advertise  anew ;  or  he  may  avail 
himself  of  his  right  to  seek  his  remedy  by  foreclosure  in  a  court 
of  chancery.^  Where  the  mistake  was  that  the  day  of  sale  fell 
on  Sunday,  and  the  new  notice  fixing  a  different  day  for  the  sale 
claimed  a  different  amount  as  due,  it  was  held  that  there  was 
nothing  in  the  proceedings  that  enabled  the  mortgagor  to  avoid 
the  siilc.*^ 

1852.  Any  error  in  the  announcement  of  the  sale  which 
would  naturally  mislead  the  public,  or  deter  persons  from  at- 
tending the  sale  and  bidding,  will  render  the  sale  irregular  and 
void.  Such  would  be  the  ell'ect  of  an  erroneous  statement  that 
the  premises  would  be  sold  for  default  of  three  mortgages  when 
in  fact  there  were  but  two,  the  third  being  upon  other  land.^ 

A  change  in  the  time  appointed  for  the  sale  after  notice  has 
once  been. given,  if  the  mortgagor  is  thereby  misled  to  iiis  preju- 

1  Williama  i;.  Pouns,  48  Tex.  141.  ^  Atwatcr    v.  Kinmnn,     Ilmr.   (Midi.) 

2  Hornby  v.  Cramer,  12  How.  (N.  Y.)     24.'J. 

Pr.  490.  0  Ranninrr  v.  Armstrong  7  Minn.  46. 

*•  Golcher    v.    IJrishin,    20    Minn.    4.').T  ;  "   niirnet  y.  DenniHton,  ."J  Jolins.  (N.  Y.) 

ThorM-arth  v.  ArniHtroni,',  20  Minn.  404.  Ch.  3.').     See,   also,    Iluliheil   v.  Sililcy,  5 

♦  Ingle  V.  Jones,  43  Iowa,  286.  Lans.  (N.  Y.)  51  ;  .-JO  N.  Y.  408. 

6G1 


§  1853.]     rowKR  OF  salic  mortgagks  and  trust  dekds. 

dice,  avoids  the  sale,  thou<x]>  tlio  notice  was  publisliod  for  the  req- 
uisite lenj^th  of  time  after  the  chan^(^l  When  a  sale  is  adjouined 
to  a  future  day,  hut  tlie  notice  of  it  as  pubhslied  is  for  a  differ- 
ent day,  the  sale  will  he  void.^  Such  also  may  be  the  effect  of 
an  advertisement  of  sale  in  which  the  day  of  the  week  and  day  of 
the  month  (ixcd  for  it  are  not  coincident ; '^  or  one  in  which  the 
sale  was  hy  mistake  fixed  for  the  wrong  year.^  But  wh(;re  the 
advertisement  stated  the  day  of  the  month  correctly,  but  gave  the 
wrong  day  of  the  week,  and  the  mistake  was  corrected  in  the  no- 
tice published  the  daj'^  before  the  sale,  there  being  no  evidence  of 
any  intention  to  mislead,  a  bill  in  equity  to  set  aside  the  sale  for 
irregularity  was  dismissed.^ 

Where  a  notice  of  sale  under  a  deed  of  trust  described  three 
notes  secured  by  it,  one  of  them  not  being  due,  and  recited  that 
the  trustee  had  been  called  upon  to  sell  the  property  for  the  pay- 
ment of  two  of  them,  there  is  no  implication  that  the  trustee  in- 
tended to  sell  for  the  payment  of  all  of  the  notes,  and  the  notice 
is  not  open  to  objection.^  A  notice  is  not  objectionable  as  mis- 
leading for  the  reason  that  it  does  not  mention  that  all  the  notes 
have  been  paid  but  one,  when  it  recites  in  general  terms  that 
default  had  been  made.'^ 

1853.  Sale  of  equity  of  redemption.  —  A  power  of  sale  which 
authorizes  the  mortgagee  to  advertise  and  sell  at  auction  the  moi-t- 
gaged  premises,  including  all  equity  of  redemption  of  the  mort- 
gagor, gives  no  authority  to  sell  the  equity  of  redemption  alone  ; 
and  if  the  advertisement  states  only  that  the  equity  of  redemp- 
tion will  be  sold,  it  is  insufficient,  and  the  sale  under  it  is  invalid. 
Any  one  wishing  to  purchase  could  only  infer  from  the  advertise- 
ment that  he  could  buy  an  estate  on  which  the  incumbrance  would 
continue,^  But  an  advertisement  by  a  second  mortgagee  of  "  all 
the  right,  title,  interest,  and  estate  which,  by  virtue  of  the  power 
contained  in  said  mortgage  and  the  assignments  thereof,  I  have 
the  right  to  sell  in  and  to  "  the  mortgaged  premises,  is  not  defec- 
tive, though  the  power  was  to  sell  the  granted  premises  subject 
to  a  prior  mortgage.     The  legal  effect  of  the  advertisement  is  the 

1  Dana  v.  Farrington,  4  Minn.  43.3.  ^  Chandler  v.   Cook,  2  McArthur  (D. 

2  Miller  v.  Hull,  4  Den.  (N.  Y.)  104.  C),  176. 

*  Calloway  v.  People's  Bank  of  Belle-         «  Tooke  v.  Newman,  75  111.  215. 
fontaine,  54  Ga.  441,  450.  t  ^ush  y.  Sherman,  80  111.  ICO. 

*  Fenner  v.  Tucker,  6  R.  I.  551.  8  Powle  v.  Merrill,   10  Allen  (Mass.), 


662 


350. 


WHAT   THE   NOTICE   SHOULD    CONTAIN.       [§§  1854,  1855. 

same  as  if  the  language  of  the  mortgage  had  been  used,  and  could 
mislead  no  one.^ 

1854.  Unimportant  omissions.  —  If  the  notice  contains  such 
facts  as  reasonably  apprise  the  public  of  the  time,  place,  and 
terms  of  sale,  and  describes  the  property  sufficiently,  mere  omis- 
sions or  inaccuracies  not  calculated  to  mislead  any  one  are  not  to 
be  regarded ;  as  where  a  notice  stated  that  the  property  would  be 
sold  for  cash  at  the  court-house  door  in  the  town  of  Hillsboro, 
without  naming  the  county,  or  stating  that  the  sale  would  be  at 
public  vendue  to  the  highest  bidder.^ 

It  need  not  state  the  terms  of  sale,  or  that  the  terms  would  be 
stated  at  the  time  of  sale  ;  and  if  at  the  sale  a  deposit  is  required 
and  this  prevented  a  person  present  from  bidding,  if  the  mort- 
gagee acted  in  good  faith,  and  the  requiring  a  deposit  was  usual 
and  reasonable,  this  does  not  invalidate  the  sale.^ 

The  advertisement  need  not  be  dated.  The  time  of  its  first 
appearance  by  publication  will  be  taken  as  the  date.* 

It  is  not  necessary  that  the  advertisement  of  a  sale  under  a 
power  should  state  that  a  default  has  occurred  in  the  perform- 
ance of  the  condition  of  the  mortgage.  The  statement,  that  the 
sale  is  by  virtue  of  the  power  given  by  the  mortgage,  necessarily 
implies  that  there  has  been  a  default.^ 

1855.  A  statutory  requirement  that  the  notice  shall  state 
the  amount  claimed  to  be  due  at  the  time  of  the  first  publica- 
tion is  sufficiently  met  by  a  statement  of  the  amount  claimed  to 
be  due  at  a  certain  prior  date,  and  that  the  mortgagee  claims  that 
sum  with  interest  from  that  time.*'  If  only  a  part  of  the  mort- 
gage debt  be  due,  it  is  the  usual  and  safer  way  to  state  both  the 
whole  amount  of  the  debt  and  the  amount  of  it  which  has  be- 
come payable.^  The  fact  that  the  notice  states  a  larger  sum  to 
be  due  than  is  actually  due  does  not  affect  the  validity  of  tlie  sale, 

1  Model  Lodcing  House  Ass'n  u.  Bos-  Mass.  282 ;  Wing  v.  Ilnyfonl,  124  MaBS. 
ton,  114  Mass.  133.  249. 

2  Powers  I'.  Kueckoff.  41  Mo.  425.    Sec,  ♦  Kamsey  i-.  Merriam.  6  Minn.  168. 
also,  Gray  i'.  Sliaw,  14  Mo.  341  ;  Beaticr.  6  Model  Lodging  House  Ass'n  v.  Bos- 
Butler,  21   Mo.  313  ;    Hornby  v.  Cramer,  ton,  1 14  Mass.  133  ;  and  see  King  v.  Bron- 
12  How.  (N.  Y.)  Pr.  490.  son,  122  Mass.  122. 

8  Model   Ixdging   House  Ass'n  i-.  Bos-         «  .ludd  v.  O'Brien,  21  N.  Y.  180,  189.. 
ton,  114  Mass.  1.33  ;  Goodale  v.  Wheeler,         '  Jencks  v.  Alexander,   11   Puigc,  G19, 
11    N.    H.   424  ;    Pope    v.   Barrage,    115     626. 

663 


§§  1850,  1857.]     rowKR  of  sale  mortgages  and  trust  deeds. 

if  no  iiotual  injury  or  fraiidiiUMit  pni-poso  is  shown. ^  Although 
an  excessive  cliiini  might  havo  the  clTect  to  detcn*  bidders,  it  can- 
not bo  InftM-rod  in  the  absence  of  ])roof  that  it  aetually  had  this 
elYect.  If  the  mortgagee  .sliouUl  bill  up  to  the  amount  of  his  ex- 
cessive claim,  and  take  the  property,  he  would  be  obliged  to  pay 
the  excess  over  what  was  legally  due.- 

1856.  In  advertising  a  sale  under  a  second  mortgage  it  is 
not  essential  to  state  the  amount  due  upon  the  first  mortgage, 
even  if  both  mortgages  are  held  by  the  same  person.  And  if  the 
mortgagee  at  the  sale  slightly  overestimates  the  amount  due  on 
that  mortgage,  it  is  immaterial.^ 

9.  Sale  in  Parcels. 

1857.  Generally  there  is  no  obligation  to  sell  in  parcels, 
except  where  such  a  sale  is  required  by  statute,  or  where  special 
equities,  which  the  mortgagee  is  bound  to  respect,  have  arisen  as 
to  portions  of  the  premises.  But  even  when  the  mortgagor  has 
alienated  a  part  of  the  mortgaged  property,  and  upon  equitable 
grounds  the  purchaser  is  entitled  to  have  the  part  of  the  prem- 
ises not  alienated  first  sold  under  the  power,  he  must  apply  to  a 
court  of  chancery  before  the  sale  for  an  order  directing  the  sale 
to  be  so  made  ;  and  if  he  does  not  do  this  he  cannot  apply  to  have 
the  sale  set  aside  as  against  a  bond  fide  purchaser.*  There  is  gen- 
erally no  obligation  upon  him  to  sell  in  lots  in  order  to  obtain  a 
greater  price.^  The  deed  generally  empowers  the  mortgagee  to 
sell  the  whole  estate  upon  any  default,  and  to  pay  the  entire  debt 
from  the  proceeds  ;  and  usually  makes  no  provision  in  regard  to 
the  sale  of  the  property  in  parcels.  The  mortgagee  may  never- 
theless sell  in  parcels  when  the  property  will  bring  a  better  price 
by  this  mode  of  sale.  After  he  has  advertised  the  property  to  be 
sold  in  lots,  the  sale  should  be  made  accordingly.  When  the  sale 
is  made  in  parcels,  it  must  stop  when  enough  has  been  realized  to 

1  Fairman  v.  Peck,  87  111.  156;  Ham-  »  Model  Lodging  House  Ass'n  v.  Bos- 
ilton  V.  Luljukee,   51   III.  415;  Jcncks  v.     ton,  114  Mass.  15.3. 

Alexander,  11  Paige  (N.  Y.),  619;  Klock  *  St.  Jo.seph  Manufacturing  Co.  v.  Dag- 

i;.  Cronkhite  1  Hill  (N.  Y.),  107.  gett,  84  111.  556. 

2  Butterfield  v.  Farnham,  19  Minn.  85;  ^  Adams  v.  Scott,  7  W.  R.  21.3.  See, 
Bennett  v.  Healey,  6  Minn.  240;  Bailey  al.so,  Grover  v.  Fox,  36  Mich.  4G1.  As  to 
V.  Merritt,  7  Minn.  159  ;  Ramsey  v.  Mer-  sales  in  parcels  under  decree  of  court, 
riam,  6  Minn.  168;  Spencer  v.  Annon,  4  see  §§  1616-1619. 

Minn.  542. 

664 


SALE  IN   PARCELS.  [§  1858. 

pay  the  debt  and  expenses  ;  for  the  debt  being  paid  the  power  of 
sale  is  exhausted.^ 

It  is  true,  however,  that  some  courts  have  adopted  the  rule 
that  all  forced  sales  of  property  shall  be  made  in  parcels,  when  the 
lots  are  sufficiently  distinct  both  in  law  and  in  fact  to  render 
distinct  sales  practicable.^  In  such  case,  when  the  property  is 
susceptible  of  division,  a  sale  of  the  entire  premises  together  will 
vitiate  the  sale,  and  a  court  of  equity  may  set  it  aside.^ 

In  some  states  it  is  provided  by  statute  that  when  the  mort- 
gaged premises  consist  of  distinct  farms  or  lots  they  shall  be  sold 
separately,  and  that  the  sale  shall  cease  when  a  sufficient  sum  has 
been  realized  to  satisfy  the  debt.* 

A  party  interested  in  the  equity  of  redemption,  who  for  a  valu- 
able consideration  has  waived  his  right  to  redeem,  cannot  object 
that  the  sale  was  not  made  in  parcels,  for  the  requirement  is  made 
in  the  interest  of  those  entitled  to  redeem,  and  to  protect  this 
right  in  each  parcel  separately.^  For  the  same  reason  the  mort- 
gagee cannot  take  this  objection  to  his  own  proceedings.^ 

1868.  Under  a  statute  requiring  a  sale  in  parcels  a  mort- 
gagee is  not  justified  in  selling  the  entire  property  in  one  lot, 
when  any  one  interested  in  the  equity  of  redemption  requests  a 
sale  in  parcels,  and  offers  in  good  faitli  to  bid  the  amount  of  the 
mortgage  debt  and  expenses  for  a  part  of  the  property  so  situ- 
ated that  it  may  be  conveniently  sold  separately.'^  But  a  mort- 
gagee is  not  bound  to  sell  in  parcels  witliout  request  where  the 
division  into  parcels  was  not  made  until  after  the  execution  of 
the  mortgage.  Tlie  mortgagee  is  often  in  no  situation  to  know 
of  subsequent  divisions  of  tlie  property  ;  and  a  sale,  therefore,  in 

1  Charter  v.  Stevens,  3  Den.  (N.  Y.)  33.  ley  v.  Chesley,  49  Mo.  540;  54  Mo.  347, 

'^  Rowley   v.   Brown,    1   Binn.  (Pa.)  61.  and  cases  cited. 

This  was  a  sale  on  execution.     The  court  *  New  York:  §  1751. 

say :  "  It  is  the  rule  of  this  court  to  dis-  Wisconsin  :  §  1762. 

allow  in  every  ca.se  a  lumpinf^  sale  by  the  Mississippi :  §  1744. 

sheriff,  where  from  the  distinctness  of  the  Minnesota:  §  1743. 

item.s  of  the  property  he  c.in  make  distinct  Michigan  :  §  1741. 

sales.     It  is  essential  to  justice  and  to  the  Dakota  T.  :  §  1728. 

protection  of  the  unfortunate  debtors  that  '  Clark  v.  Stilson,  30  Mich.  482. 

this   should   be   the  general    rule.      Any  '  Clark  v.  Stilsou,  supra. 

other  would   lead  to  the  most  shameful  ^  Ellsworth  v.  Lockwood,  42  N.  Y.  89. 

sacrifice  of  the  property.     There  may  be  In  this  case,  although  the  premises  were 

exceptions,  but  the  purchaser  must  bring  described   in  the   mortgage   as  one  tract, 

himself  within  them."  the  mortgage  authorized  a  sale  of  "  any 

8  Sumrall  v.  ChufTin,  48  Mo.  402  ;  Ches-  part  or  parts  "  of  it. 

6G5 


§  1850.]       POWER   OF   SALF-:    MORTGAGES   AND   TRUST    DEEDS. 

Olio  entire  jKirocl   sliouKl  ho.  lu'Ul  to  be  good  unless  a  request  to 
divide  it  ho  shown. ^ 

In  sonic  oases  it  lias  boon  said  that  if  the  jn'oniises  at  the  time 
of  the  inortjrajre  consisted  of  one  tract,  and  were  so  described,  the 
mortgagee  is  not  bound  to  sell  in  parcels,  although  the  land  has 
subsequently  boon  divided  into  lots,^  and  although  he  is  requested 
by  one  interested  in  the  equity  to  sell  in  lots  according  to  a  plan.^ 
AVhen  the  mortgage  describes  the  land  as  one  tract,  it  is  said  that 
it  is  the  right  of  the  mortgagee  by  the  contract  to  sell  the  whole 
of  the  mortgaged  premises  in  satisfaction  of  his  debt ;  but  the 
better  opinion  would  seem  to  be  that  the  obligation  to  sell  in  lots 
has  reference  to  the  situation  of  the  property  at  the  time  of  sale, 
irrespective  of  the  description  in  the  mortgage.* 

The  criterion  in  all  cases  is,  what  mode  of  sale  will  realize  the 
largest  amount  of  money  ?  If  this  object  can  be  obtained  by  the 
sale  of  the  whole  mortgaged  premises  together,  that  is  the  proper 
mode  to  pursue,  even  if  they  are  readily  divisible.  If  the  land  is 
divisible  into  separate  parcels,  and  is  better  adapted  for  use  in  par- 
cels, then  the  presumption  would  seem  to  be  that  it  would  pro- 
duce a  larger  amount  of  money  if  sold  in  that  way,  and  the  sale 
should  be  made  accordingly.^ 

1859.  A  trustee  under  a  deed  of  trust  is  bound  to  render 
the  sale  as  beneficial  as  possible  to  the  debtor,  and  even  in  the 
absence  of  any  provision  in  the  deed  for  a  sale  of  a  part  of  the 
property,  or  for  selling  it  in  parcels  if  it  be  susceptible  of  division, 
and  will  bring  more  by  sale  in  separate  parcels,  or  if  a  sale  of  a 
part  will  satisfy  the  debt,  he  is  bound  to  act  accordingly;^  and  a 
sale  not  so  made  will  be  held  invalid  on  application  of  the  party 
injured.'     The  trustee  must  exercise  a  sound  discretion  in  selling, 

1  Ellsworth  V.  Lockwood,  9  Hun  (N.  9  Paige  (N.  Y),  259 ;  Slater  v.  Maxwell, 
Y.),  .548.  6  Wall.  275. 

2  Lamerson  v.  Marvin,  8  Barb.  (N.  «  In  Olcott  v.  Bynum,  17  Wall.  44,  62, 
Y.)  9.  where  express  authority  wa.s  given  to  sell 

8  Griswold  v.  Fowler,  24  Barb.  (N.  Y.)  all  the  property  upon  the  failure  to  pay 
135.  Although  consisting  of  two  tracts,  any  instalment  of  the  debt  secured  at  ma- 
if  they  have  previously  been  held  and  used  turity,  Mr.  Justice  Swayne  said  :  "  If 
together  as  one  farm,  a  sale  of  the  whole  enough  of  it  to  satisfy  the  amount  due 
in  one  parcel  is  good.  Anderson  v.  Aus-  could  be  segregated  and  sold  without  in- 
tin,  34  Barb.  (N.  Y.)  319.  jury  to  the  residue,  it  would  have  been  the 
*  Ellsworth  V.  Lockwood,  snpra.  duty  of  the  mortgagees  so  to  sell." 
6  Wells  i\  Wells,  47  Barb.  (N.  Y.)  416.  ^  Tatum  v.  HoUiday,  59  Mo.  422; 
See,  also,  American   Ins.   Co.  i;.  Oakley,  Goode  v.  Comfort,  39   Mo.  313 ;  Gray  v. 

666 


SALE  IN   PARCELS.  [§  1860. 

and  must  sell  the  land  as  a  whole  where  it  will  sell  for  more  in 
this  way  than  in  parcels  ;  ^  and  in  parcels  when  it  will  sell  better 
in  this  way.  But  a  sale  once  made  will  not  be  set  aside  merely 
on  the  ground  that  the  property  was  sold  as  a  whole  when  it  was 
capable  of  easy  division.  It  must  appear  further  that  the  inter- 
ests of  the  debtor  were  sacrificed ;  ^  or  that  there  was  some  at- 
tendant fraud  or  unfair  dealing.^ 

The  mortgage  is  usually  so  drawn  that  the  whole  debt  becomes 
due  upon  any  default;*  but  even  when  this  is  not  the  case,  upon 
a  default  in  the  payment  of  an  instalment  of  interest  or  of  prin- 
cipal the  whole  mortgaged  estate  may  be  sold  when  a  sale  of  a 
part  would  greatly  impair  the  whole.^ 

A  railway  conveyed  by  a  trust  deed  or  mortgage  to  secure 
bonds  may  generally  be  sold  altogether  upon  a  default  in  the  pay- 
ment of  interest,  or  of  an  instalment  of  the  principal,  before  the 
maturity  of  the  entire  principal  of  the  debt ;  because  it  would 
generally  be  the  case  that  the  hne  of  road  could  not  be  divided 
and  sold  in  pieces  without  manifest  injury  to  the  property.  The 
fact  that  the  road  is  situated  in  two  or  more  states,  and  was  orig- 
inally owned  by  two  corporations  created  in  different  states,  does 
not  affect  the  determination  of  this  question.^ 

1860.  Sale  of  sufficient  only  to  pay  the  debt.  —  When  a 
mortgage  or  trust  deed  authorizes  the  sale  of  the  whole  premises 
upon  a  default,  a  sale  of  the  whole  is  regular,  and  as  a  rule  no 
court  will  interfere  with  the  exercise  of  the  power  in  this  way. 
Yet  it  has  been  held,  where  the  policy  of  the  laws  of  a  state 
seemed  to  rc^quire  that  all  forced  sales  of  land  should  be  confined 
to  such  portions  of  the  premises  as  are  sufficient  to  satisfy  the  debt, 
that  a  court  of  equity  might  interpose  to  prevent  the  full  exer- 
cise of  the  power  if  the  lands  are  divisible.     But  this  is  an  inter- 

Shnw,    14    Mo.   .341;    T.iylor's   Ilcirs   v.     Koss   i;.   Mead,  10  111.  171;    Gillespie   v. 
Elliott,  32  Mo.  172,  175.  Smith,  29  111.  47.3. 

1  SiiiKleton  y.  Scott,  11  Iowa,  589 ;  Kel-         *  §  1181;  Scatoii  v.  Twyfonl,  L.  li.  11 
loRK   V-   Carrifo,  47  Mo.  157;  Carter  v.     Eq.  Cas.  591. 
Ab.shire,  48  Mo.  300.  ''  Olcott  ».  Bynuin,  17  Wall.  44  ;   Diin- 

*  ClicMey  V.  Chesky,  54  Mo.  347  ;  Iii^'lc  ham  i'.  Itailway  Co.  1  lb.  254  ;  Tope  v. 
V.  JoncH,  43  Iowa,  280  ;  Shine  v.  Hill,  23  Durant,  20  Iowa,  233  ;  Salmon  v.  Clag- 
lowa,  204  ;  Fairman  i'.  Pick,  87  111.  156.       gett,  3  Bland  (Md)  Cli.  125. 

«  Bcnkendorf  v.  Vincenz,  52  Mo.  441  ;   '      »  Wilmer  v.  Atlanta  &  Richmond  Air 

Line  H.  U.  Co.  2  Woods,  447. 
667 


§§  1861,  180:!.]     powkr  ok  salk  mohtgagks  and  trust  dkkds. 

fiMviu'i'  with  the  contract  of  the  parties  which  tho  courts  will  not 
niakt'  unless  very  strong  reasons  exist  for  so  doing.^ 

Although  the  debt  be  payal)le  in  instalments  and  only  one  of 
tbeni  is  due,  a  sale  of  the  whole  estate  may  be  made.  The  power 
contemplates  only  one  sale,  and  the  statutes  do  not  provide  for  a 
sale  subject  to  future  instalments.^ 

10.   Conduct  of  Sale,   Terms,  and  Adjournment. 

1861.  Mortgagee  may  act  by  attorney.  —  The  entry  upon 
the  premises  authorized  by  the  power,  the  giving  of  the  notice  of 
sale,  and  the  conduct  of  the  sale,  are  acts  which  the  mortgagee 
may  perform  through  others,  whose  authority  need  not  be  under 
seal  or  in  writing.^  He  may  employ  an  auctioneer  to  make  the 
sale,  and  his  personal  presence  at  the  time  and  place  of  sale  is  not 
essential.*  In  general  he  may  employ  an  agent  or  attorney  to  do 
any  acts  which  are  merely  ministerial,  and  which  involve  no  ex- 
ercise of  discretionary  powers.^  Of  course  he  makes  himself  re- 
sponsible for  his  agent's  acts  ;  and  if  he  allows  his  agent  to  I'eceive 
the  proceeds  of  sale,  and  they  are  lost  or  misapplied,  he  cannot 
sue  the  mortgagor  for  the  debt ;  or  if  he  concurs  with  an  assignee 
from  the  mortgagor  of  the  equity  of  redemption  in  selling  the 
property,  and  allows  him  to  receive  the  purchase  money,  he  may 
be  perpetually  restrained  from  suing  the  mortgagor  for  the  debt.^ 
It  is  not  necessary  that  the  mortgagee  be  personally  present  at 
the  sale.  This  may  be  conducted  by  his  attorney,  whose  acts  he 
ratifies  by  subsequently  making  the  deed  necessary  to  convey  the 
property  J 

1862.  But  a  trustee  under  a  deed  of  trust  should  be  per- 
sonally present  at  the  sale,  so  that  he  may,  if  necessary  to  pre- 
vent a  sacrifice  of  the  property,  adjourn  the  sale,  which  it  would 
be  clearly  his  duty  to  do ;  therefore  his  absence  at  the  sale  has 
been  held  to  render  the  sale  void.^     He  is  bound  to  adopt  all  rea- 

1  Johnson  v.  Williams,  4  Minn.  260.  &  Hubbard  v.  Jarrell,  23  Md.  82 

2  Barber   v.  Carey,    11    J5arb.  (N.  Y.)  «  Palmer  i-.  Hendrie,  28  Beav.  341. 
549;  Bunce  v.  Reed,  16  lb.  347;  Cox  v.  ^  Munn  v.  Burges,  70  111.  604;  Barker 
Wheeler,  7  Paige  (N.  Y.),  248.  v.  Banks,  79  N.  C.  480. 

8  Hoit  V.  Russell,  56  N.  H.  559 ;  Cran-  »  Landrum  v.  Union  Bank  of  Mo.  63 

ston   V.    Crane,  97  Mass.   459;    Yourt  v.  Mo.  48  ;  Vail  y.  Jacobs,  62  Mo.  130;  Gra- 

Hopkins,  24  111.  326 ;  Watson  v.  Sherman,  ham  v.  King,  50  Mo.  22 ;  Bales  v.  Perry, 

84  111.  263.  51  Mo.  449. 

*  Fogartj  V.  Sawyer,  23  Cal.  570. 

668 


CONDUCT   OF   SALE,   TERMS,   AND   ADJOURNMENT.      [§§  1863,  1864. 

sonable  precautions  to  render  the  sale  beneficial  to  tlie  debtor  ;  a 
bare  compliance  with  the  terms  of  the  power  is  not  enough.  He 
must  to  this  end  exercise  a  reasonable  judgment  or  discretion  in 
respect  to  advertising  the  property  and  conducting  the  sale.  In 
respect  to  all  duties  which  are  not  merely  mechanical  or  ministe- 
rial, and  are  not  prescribed  by  the  terms  of  the  deed,  a  special 
trust  and  confidence  are  reposed  in  him,  and  he  cannot  delegate 
these  to  an  agent. ^ 

If  the  deed  be  to  two  trustees,  either  of  whom  is  authorized  to 
sell  on  default,  and  both  join  in  giving  notice  and  in  executing  the 
deed  to  the  purchaser,  the  power  is  well  executed,  although  but 
one  attended  the  sale."'^ 

1863.  The  power  generally  provides  that  the  sale  shall  be 
by  public  auction,  and  in  such  case  there  can  be  no  valid  pri- 
vate sale.  If  the  power  allows  of  either  mode,  a  private  sale 
made  in  good  faith  and  for  a  fair  price  is  good,  even  without  any 
advertisement.^  If  the  authority  be  to  sell  by  private  contract,  a 
sale  at  auction  would  not,  it  is  conceived,  be  justified  ;  *  for  the 
object  in  authorizing  a  private  sale  may  be  supposed  to  be  the 
obtaining  of  a  better  price  than  would  ordinarily  be  realized  by 
an  auction  sale.  If  the  power  contains  no  restriction  or  provi- 
sion as  to  the  mode  of  sale,  the  mortgagee  may  sell  at  private 
sale  as  well  as  by  public  auction,  though  as  a  general  rule  a  sale 
by  auction  would  be  the  safer  and  better  course.  If  the  power 
makes  provision  for  a  sale  by  auction,  prescribing  the  place  of  sale 
and  the  length  of  time  the  notice  shall  be  advertised,  this  pre- 
clud(!9  the  riglit  to  sell  at  private  sale.^ 

1864.  The  terms  of  sale,  while  they  should  properly  make  it 
safe  for  the  mortgagee,  should  not  be  so  stringent  as  to  deter 
persons  from  attending  the  sale  and  bidding.  If  the  conditions 
are  such  as  to  have  this  elTect  the  sale  may  be  avoided.  Not  only 
must  the  mortgagee  adhere  strictly  to  the  terms  of  the  power,  but 
in  the  trust  relation  in  which  he  stands  towards  the  persons  inter- 
ested in  the  equity  of  redemption  ho  is  bound  to  adopt  proper 
means  to  get  a  reasonable  price  for  the  property."     There  should 

J  Bales  V.  Perry,  51  Mo.  440.  &  Trust  Co.  13  N.  Y.  200  ;  Klliutt  v.  Wood, 

2  Weld  V.  Uees,  48  III.  428.     '  45  N.  Y.  71. 

'  Davey  v.  Diirrant,  1  De  G.  &  J.  .').T.5  ;  *  See  Dauiel  v.  AdiUiiH,  Atiih.  495. 

Brouard  i;.  Dumaresqiio,  3   Moo.    P.    C.  ^  Griffin   v.  Marine  Co.  of  Cliiengo,  52 

457  ;     Montague     v.    Dawes,     12     Allen  111.  130. 

(Mass.),  397;  Lawrence  u.  Farmers' Loan  '  Falkner    v.   Equitahlo     Reversionary 

6G9 


§§  ISGo,  ISGi).]     rowKU  of  sale  mortgagks  and  trust  dekds. 

bo  no  spociiil  coiulitioiis  for  tho  tulviintage  of  any  tliird  person, 
such  us  might  ck^prociate  the  property.  Any  condition  that  a 
prudent  and  reasonable  owner  wouUl  impose  when  selling  in  his 
own  right  is  justiliable  in  a  sale  by  the  mortgagee  under  the 
power.  The  mortgagee  may  make  reservations  for  the  benefit  of 
the  owner  of  the  equity  of  redemption,  as,  for  instance,  a  reserva- 
tion of  a  growing  croj).^     ' 

1865.  The  acquiescence  of  the  mortgagor  in  the  conduct  of 
the  sale,  and  particularly  in  the  terms  of  it,  will  cure  any  defect 
in  this  respect  and  give  validity  to  it.^  In  Mackey  v.  Lawjley  the 
mortgagor  was  present  at  the  sale,  and  made  no  objection  to  the 
terms  and  conditions  of  it,  and  his  acquiescence  was  held  to  con- 
clude him  from  making  objection  afterwards.  The  case  of  Taylor 
V.  Cluncning  is  to  the  same  ell'ect. 

1866.  Payment  at  time  of  sale.  —  In  fixing  the  terms  of  pay- 
ment for  a  sale  under  a  mortgage  or  trust  deed,  the  mortgagee  or 
trustee  is  bound  to  act  fairly  and  with  proper  discretion.  It  is 
usual  to  require  a  deposit  at  the  time  of  sale  of  a  reasonable  sum 
to  cover  the  expenses  of  sale,  and  insure  the  completion  of  it  by 
the  purchaser.  If  the  payment  of  the  whole  amount  of  the  pur- 
chase money  be  arbitrarily  required  at  the  time  of  sale,  or  within 
an  hour's  time  after  it,  against  the  remonstrances  of  persons  in  at- 
tendance at  the  sale,  the  sale  will  be  set  aside. ^  It  must  be  shown, 
however,  that  this  requirement  had  the  elfect  of  keeping  persons 
present  from  bidding.'*  A  requirement,  not  of  the  immediate  pay- 
ment of  the  entire  purchase  money,  but  of  a  deposit  of  a  sum  un- 
usually large,  and  not  proportioned  to  the  value  of  the  projJerty, 
would  have  the  same  effect  in  invalidating  the  sale.     It  is  not  un- 


Socicty,  4  Drew.  352 ;  Matthic  v.  Edwards, 
2  Coll.  465. 

1  Sherman  v.  Willett,  43  N.  Y.  146. 

2  Taylor  v.  Chowning,  3  Leigh  (Va.), 
654 ;  Markey  v.  Langley,  92  U.  S.  142 ; 
Olcott  V.  Bynum,  17  Wall.  44,  64.  In 
the  latter  case  there  had  been  a  sale  of 
land  in  North  Carolina  under  a  power  in 
the  year  1860.  When  the  bill  was  filed 
to  set  it  aside  nearly  eight  years  had 
elapsed.  The  mortgagor  resided  in  New 
York,  and  the  other  parties  in  interest  in 
North  Carolina.  Mr.  Justice  Swayne 
said  :  "  Making  allowance  for  the  diflSculty 

670 


of  intercourse  between  the  North  and  the 
South  during  the  war,  there  was  acquies- 
cence, express  and  implied,  for  three  years 
after  the  war  ceased.  This,  if  not  conclu- 
sive, weighs  heavily  against  the  complain- 
ant." 

8  Goldsmith  v.  Osborne,  1  Edw.  (N.  Y.) 
Ch.  560,  562.  See  Model  Lodging  House 
Ass'n  V.  Boston,  114  Mass.  133;  Md. 
Perm.  Land  &  Build.  Soc.  of  Bait.  v. 
Smith,  41  Md.  516.     See  §  1613. 

*  Goode  V.  Comfort,  39  Mo.  313,  326; 
Jones  V.  Moore,  42  Mo.  413. 


CONDUCT    OF   SALE,   TERMS,   AND   ADJOURNMENT.       [§  1867. 

reasonable  to  require  the  payment  of  8500  down  upon  a  sale  under 
a  mortgage  for  88,000,  although  the  advertisement  of  the  sale  did 
not  state  that  such  a  payment  would  be  required,  but  did  state 
that  the  terms  of  sale  would  be  stated  at  the  time  of  sale.  At 
such  a  sale  a  person  who  had  been  requested  by  the  mortgagor, 
who  was  present,  to  run  up  the  estate  for  him,  having  bid  it  off 
and  not  having  $500  with  him  to  pay,  and  not  asking  any  delay, 
the  estate  was  put  up  again  and  sold  for  a  less  sum.  It  was  held 
that  there  was  no  evidence  in  these  circumstances  of  fraud  or  un- 
fairness in  the  sale.^ 

In  a  case  in  iSIaryland,  property  worth  at  least  $6,600  was  pur- 
chased by  the  mortgagee  for  -$1,600  ;  and  it  further  appeared  that 
it  had  previously  been  struck  off  to  another  purchaser  for  the  sum 
of  82,375,  who  tendered  about  half  of  this  in  cash,  and  stated  that 
be  would  pay  the  balance  on  the  ratification  of  the  sale  as  required 
by  the  laws  of  that  state,  and  offered  sufficient  security  for  this. 
The  mortgagee  declined  to  receive  the  money,  as  not  in  confor- 
mity with  the  terms  of  sale,  which  were  for  cash  ;  and  upon  a 
subsequent  oiler  of  the  property  the  mortgagee  purchased  it.  The 
sale  was  set  aside.  Mr.  Justice  Stewart,  delivering  the  opinion 
of  the  court,  said  the  mortgagee  had  "  misapprehended  the  nature 
of  his  duty  as  trustee,  which  required  an  advantageous  sale  of  the 

property  for  the  benefit  of  all  the  parties  interested There 

is  this  difference,  however,  between  the  trustee  and  the  mort- 
gagee, which  should  never  be  forgotten  by  the  latter :  that  he  has 
a  personal  interest  in  the  proceeding,  and  that  the  mortgagor  has, 
notwithstanding,  reposed  full  trust  and  confidence  in  his  strict  im- 
partiality, and  that  there  must  be  ample  reciprocity  on  his  part 
by  a  fair  and  just  discharge  of  his  duty."  ^ 

1867.  Time  for  examination  of  title.  —  Anions  other  con- 
ditions  of  sale  it  is  usual  to  provide  that  a  certain  time  shall  be 
allowed  the  purchaser  for  the  examination  of  the  title  before  the 
purchase  money  is  payable.  If  unexpected  difficulties  occur  in 
completing  the  examination  of  title,  or  in  making  the  title  satis- 
factory to  the  purchaser,  nnich  more  time  than  that  stipulated  for 
may  be  necessary.  In  such  cases  time  is  not  generally  considered 
of  the  essence  of  the  contract.^ 

1  Winf,'  V.  Ilayfonl,  124  Mii:jh.  244.  with  approval  by  Mr.  Justice  Swnyuc,  in 

2  Horsey  v.  Hough,  38  Md.  130;  cited     Miirkey  v.  Langley,  92  U.  S.  142,  154. 

8  Hobsou  i;.  licll,  2  IJuav.  17. 
671 


§§  1868-1870.]     rowKR  of  sale  moktgagks  and  trust  deeds. 

1868.  Giving  credit.  —  In  general  it  may  be  said  that  where 
a  jnnvor  of  sale  iloes  not  expressly  authorize  the  mortgagee  to  give 
credit,  or  to  accept  a  mortgage  in  part  payment  of  the  purchase 
money  under  the  sale  to  be  made  by  him,  a  sale  for  cash  is  con- 
tem}>lated,  and  he  would  not  be  authorized  to  give  credit  for  more 
than  the  amount  oi  the  debt  due  him,  as  the  mortgagor  or  subse- 
quent incumbrancers  are  entitled  to  receive  the  surplus  remaining 
after  the  payment  of  the  mortgage  debt  in  cash.  The  persons 
entitled  to  the  surplus  could,  of  course,  by  subsequent  agreement, 
waive  this  right  and  join  the  mortgagee  in  giving  credit  for  the 
amount  coming  to  them. 

A  purchaser  at  the  sale  is,  of  course,  chargeable  with  notice  of 
any  requirement  contained  in  the  mortgage  as  to  credit,  and  with 
notice  of  any  irregularity  attending  the  sale  in  this  respect ;  but  a 
remote  purchaser  is  not  chargeable  with  such  notice.^  If  a  require- 
ment that  the  sale  be  for  cash  be  substantially,  though  not  liter- 
ally, complied  with,  and  no  injury  be  done  to  the  mortgagor,  no 
objection  can  be  taken  to  the  sale.^ 

1869.  When  the  power  does  not  prescribe  the  terms  of  sale, 
the  sale  may  properly  be  for  cash,  even  where  it  is  customary  to 
give  credit  on  foreclosure  sales.^  In  Maryland,  where  sales  under 
powers  must  be  reported  to  the  court  and  confirmed  to  make  them 
valid,  an  objection  to  a  sale  for  cash  as  harsh  and  inequitable  can 
be  taken  only  upon  the  ratification  of  the  sale,  and  is  no  ground 
for  enjoining  it.'* 

1870.  If  the  mortgagee  may  sell  for  cash  or  credit  he  must 
use  his  discretion  fairly.  When  by  the  terms  of  the  power  he 
is  authorized  to  use  his  discretion  in  this  respect,  he  must  use  it 
fairly  in  the  interest  of  the  mortgagor,  and  not  merely  for  his  own 
interest;  and  if  the  property  is  subject  also  to  other  liens,  the 
mortgagee  in  selling  under  his  power  is  a  trustee  for  them,  as  well 
as  for  the  mortgagor.  Whether  he  shall  sell  for  cash  or  for  credit 
or  for  both,  when  expressly  authorized  to  do  either,  is  a  matter 
for  his  discretion,  to  be  fairly  exercised  for  the  benefit  of  all  con- 
cerned. "He  must  regard  the  interest  of  others  as  well  as  his 
own.  He  should  seek  to  promote  the  common  welfare.  If  he 
does  this,  and  keeps  within  the  scope  of  his  authority,  a  court  of 
equity  will  in  nowise  hold  him  responsible  for  mere  errors  of  judg- 

1  Johnson  v.  Watson,  87  111.  535.  8  Qlcott  v.  Bynum,  17  Wall.  44. 

2  Ballinger  v.  Bourland,  87  111.  513.  ■*  Powell  v.  Hopkins,  38  Md.  1. 

672 


CONDUCT    OF   SALE,   TERMS,    AND   ADJOURNMENT.       [§  1871. 

raent,  if  thev  have  occurred,  or  for  results,  however  unfortunate, 
which  he  could  not  have  anticipated.''  ^ 

1871.  The  mortgagee  may,  in  making  the  sale,  take  all  the 
risk  of  the  credit  or  for  the  purchase  money  upon  himself ;  and 
charge  himself  with  the  whole  proceeds,  and  then  pay  the  surplus 
in  cash  to  the  owner  of  the  equity  of  redemption,  or  others  enti- 
tled to  it.  With  this  limitation,  neither  the  mortgagor  nor  other 
parties  interested  in  the  property  can  object  to  the  giving  of 
credit,  for  this  affords  an  opportunity  to  make  a  better  sale,  and 
is  for  the  benefit  of  all  parties.^  Although  the  deed  itself  provides 
that  the  sale  shall  be  made  for  cash,  the  mortgagee  may  give 
credit  for  that  part  of  the  proceeds  coming  to  him  ;^  and  where 
the  premises  have  subsequently  become  incumbered  by  other  liens, 
the  holders  of  which  are  satisfied  to  take  the  notes  of  the  pur- 
chaser at  the  foreclosure  sale,  the  mortgagee  making  the  sale  may 
take  such  notes  in  part  payment,  as  they  are  equivalent  to  cash, 
and  the  taking  of  them  does  not  prejudice  any  one.'*  On  the  con- 
trary, such  a  course  would  generally  result  to  the  advantage  of  the 
owner  and  of  the  holders  of  subsequent  liens.^ 

A  power  of  sale  given  to  a  mortgagee  authorized  him,  in  case  of 
a  default  in  payment  of  the  principal  sum  and  interest,  to  dispose 
of  the  premises  by  public  sale  or  private  contract  for  such  price  as 
could  reasonably  be  obtained  for  them.  Upon  default  the  mort- 
gagee made  a  private  contract  of  sale.  Subsequently,  the  pur- 
chaser not  finding  it  convenient  to  pay  the  money  down,  it  was 
agreed  that  the  larger  portion  of  the  purchase  money  should  re- 
main on  the  mortgage  of  the  estate ;  and  then,  instead  of  convey- 
ing the  estate  to  the  buyer,  the  mortgagee  conveyed  to  a  trustee, 
to  hold  in  the  first  place  as  security  for  the  payment  of  the  pur- 
chase money.  It  was  contended  tliat  this  was  not  a  good  exercise 
of  the  power,  because  the  purchase  money  was  not  paid  down. 
The  amount  received  was  less  than  the  debt  due  the  mortgagee. 
The  court  held  that  the  power  was  duly  exercised,  and  that  it  was 

1  Markey  v.  Langley,  92  U.  S.  142,  per  Paige  (N.  Y.),  248;  Parker  v.  Banks,  79 
Mr.  Justice  Swayne.  N.  C.  480. 

2  Bailey    v.   vKtna    Ins.   Co.    10   Allen  »  Strother  «;.  Law,  54  111.  413. 
(Mas-s.),  286;    Davey  v.  Durrant,  1  De  G.  *  Mead  i;.  McLaiiglilin,  42  Mo.  198. 

&  J.  535;  and  see  Thurlow  v.  Mackeson,         ^  Cox  v.  Wheeler,  7  I'aiKi'  (NY.),  248, 
L.  R.  4  Q.  B.  97  ;  Crenshaw   v.  Seigfried,      251. 
24  Gratt.  (Va.)  272;  Cox   v.    Wheeler,   7 

TOL.  n.  43  673 


§§  1872,  1873.]     POWER  of  salk  mortgages  and  trust  dkeds. 

immaterial  tliat  the  contract   of   purcliaso  was  carried  out  by  a 
mortj^age.^ 

1872.  When  the  mortgagee  is  expressly  authorized  to  sell 
for  cash  or  on  credit,  lie  may  do  either  or  combine  both  in  the 
sale,  and  although  the  terms  of  sale  provide  for  the  payment  of 
one  third  of  the  jnnchase  money  in  cash,  and  the  balance  in  notes 
secured  by  mortgage  upon  the  same  property,  it  is  competent  for 
the  mortgagee  to  change  the  terms  after  tlie  property  is  struck  off, 
bv  giving  credit  for  a  larger  portion  of  the  purchase  money.  Such 
a  power  is  in  this  respect  without  restriction.^ 

In  Markey  v.  Langley^  the  mortgagee,  being  authorized  to  sell 
for  cash  or  for  credit,  sold  wholly  upon  credit,  and  took  prop- 
erty in  addition  to  that  covered  by  the  original  mortgage  as  secu- 
rity. On  account  of  a  great  depreciation  in  value  afterwards,  the 
mortgagee  was  obliged  to  sell  the  property  again,  and  for  a  less 
price  ;  and  a  subsequent  incumbrancer  then  claimed  that  the  mort- 
gagee should  be  charged  with  a  portion  of  the  nominal  proceeds 
of  the  first  sale  as  cash,  on  the  ground  that  he  was  not  justified  in 
selling  for  credit  wholly.  But  the  court  held  that  having  author- 
ity to  sell  in  this  way,  and  having  acted  at  the  time  in  good  faith 
and  for  the  benefit  of  all  concerned,  so  far  as  then  appeared,  he 
could  not  be  held  responsible  for  the  results.^ 

When  a  sale  is  properly  made  in  part  for  credit,  interest  con- 
tinues to  run  on  the  part  of  the  mortgage  debt  not  satisfied  by 
the  cash  payments,  until  the  purchase  money  is  received.^ 

1873.  Adjournment.  —  The  power  to  a  trustee  or  mortgagee 
to  sell  by  public  auction,  after  a  certain  public  notice  of  the  time 
and  place  of  sale,  includes  the  power  to  adjourn  the  sale,  in  the 
exercise  of  a  sound  discretion,  in  order  to  obtain  a  fair  price  for 
the  property.  He  may  adjourn  it  more  than  once.^  Without 
such  power  the  property  might  be  sacrificed  to  the  injury  not  only 
of  the  creditor  but  of  the  debtor  as  well.  As  has  already  been 
seen,  this  power  of  adjournment  is  held  to  belong  to  sheriffs  and 
other  public  officers  selling  under  judgment  or  decree  of  court.^ 
"  If  such  a  power,"  says  Mr.  Justice  Curtis,  "  is  implied  where  the 

1  Thurlow  V.  Mackeson,  L.  R.  4  Q.  B.  ^  Richards  v.  Holmes,  18  How.  143. 

97.  8  See  chapter  xxxvi ;   Warren   v.  Le- 

-  Markey  v.  Langley,  92  U.  S.  142.  land,  9  Mass.  26.5  ;  Russell   v.  Richards, 

3  Markey  v.  Langley,  92  U.  S.  142.  11  Me.  371  ;  Tinkom  v.  Purdy,  5  Johns. 

*  Stanford     v.    Andrews,     12     Helsk.  (N.  Y.)  345. 
(Tenn.)  664. 

674 


CONDUCT   OF   SALE,    TERMS,    AND   ADJOURNMENT.       [§  1874. 

law,  acting  in  invitum,  selects  the  officer,  a  fortiori  it  may  be  pre- 
sumed to  be  granted  to  a  trustee  selected  by  the  parties."  ^ 

It  is  well  settled  that  a  mortgagee  may,  in  the  exercise  of  a 
reasonable  discretion,  adjourn  the  sale  from  time  to  time.'^  It  is 
his  duty,  growing  out  of  the  trust  relation  he  occupies  towards  the 
mortgagor  and  all  parties  interested  under  him,  to  get  the  best 
price  he  can,  and  to  take  proper  and  reasonable  means  to  obtain 
the  full  value  of  the  property.  If  he  deems  it  expedient  to  ad- 
journ the  sale  for  the  reason  that  very  few  persons  are  present, 
he  has  the  right  to  do  so.  He  must  act  in  good  faith.  It  often 
becomes  in  this  way  the  duty  of  the  mortgagee,  or  of  a  trustee 
under  a  deed  of  trust,  to  adjourn  the  sale.^  The  want  of  bid- 
ders renders  an  adjournment  necessary. 

A  sale  at  which  no  one  is  present  but  the  auctioneer,  who  bids 
off  the  property  for  the  mortgagee,  is  void.  It  is  not  a  legal  auc- 
tion.* If  the  purchaser  to  whom  the  property  is  struck  off  at  the 
auction  refuses  to  complete  his  purchase,  and  the  hour  of  sale  has 
passed  and  the  bidders  have  departed,  a  resale  cannot  be  made 
without  advertising  the  property  anew.^ 

When  an  adjournment  is  made,  it  is  usual  for  the  officer  to  an- 
nounce to  those  in  attendance  at  the  sale  the  time  and  place  to 
which  the  sale  is  adjourned.  The  time  announced  in  this  way 
and  that  afterwards  published  should  agree,  or  the  validity  of  the 
sale  may  be  affected.^ 

1874.  The  notice  of  an  adjournment  of  a  sale,  if  given  at  all, 
need  not  be  so  minute  and  specific  as  the  original  advertisement." 
The  adjourned  sale  is  in  effect  the  sale  of  which  the  previous 
notice  was  published.  If  the  notice  of  the  adjourned  sale  by  mis- 
take fixes  a  different  and  more  distant  day  for  the  sale  than  that 
to  which  the  adjournment  was  actually  made,  and  the  sale  is  act- 
ually made  upon  the  day  specified  in  such  notice,  it  will  be  irreg- 
ular and  void.^  Whether  publication  of  the  adjournment  is  neces- 
sary depends  upon  the  circumstances  of  the  case,  and  particularly 

1  Richards  I'.  Ilolmee,  18  How.  143.  ^  Burnard    v.   Duncan,    38   Mo.    170; 

2  Kichards   «.  Holmes,   supra;    Dexter     Dover  «;.  Kcnnerly,  38  Mo.  4C'J. 

V.   Shepard,   117    Mass.  480;  Hosmer  v.  «  Miller  v.  Hull,  4   Den.  (N.  Y.)  104; 

Sargent,  8  Allen  (Mass.),  97.  Jackson  v.  Clark,  7  Johns.  (N.  Y.)  217. 

8  Vail    V.    Jacobs,    62    Mo.    130,    1.33;  ^   Dexter  ?;.  SlRiiard,  1 17  Mass.  480. 

Johnston  v.  Eason,  3  Ircd.  Eq.  336.  »  Miller  v.  Hull,  4  Den.  (N.  Y.)  104. 

♦  Campbell  v.  Swan,  48  Barb.  {N.  Y.) 
109. 

675 


§  187.").]       POWKR    OK   SALE   MOUTGAGKS   AND   TRUST    DKKDS. 

muni  tlu'  K'n<;tli  i)f  liiiu'  for  whu-h  the  atljournment  is  miule.  But 
it  wouKl  siH'in  that  tlic  oinission  ti)  ailvertiso  the  adjournment,  in 
any  ease  of  an  ailjournuient  for  a  reasonable  time,  would  not 
avoid  the  sale.^ 

The  adjournment  shouUl  bo  announced  at  the  time  and  place 
appointed  for  the  sale  ;  and  the  time  and  place  of  the  adjourned 
sale  should  be  stated.  It  may  be  made  without  the  agency  of  a 
licensed  auctioneer. 

In  Illinois  it  is  held  that  a  trustee  in  a  deed  of  trust  may  ad- 
journ the  sale  in  his  discretion;  but  when  he  does  so,  he  must  give 
a  new  notice  for  the  same  length  of  time  required  in  the  first  in- 
stance.^ In  some  states  it  is  provided  by  statute  that  notice  of 
the  adjournment  shall  be  given  in  the  same  paper  in  which  the 
original  notice  was  published,  and  by  posting  also.^ 

But  generally  a  sale  under  a  power  may  be  adjourned  to  a 
future  day  without  giving  a  new  notice  for  the  length  of  time 
required  for  the  first  notice.^  After  a  postponement  of  a  sale  has 
been  publicly  announced,  the  mortgagee  cannot  disregard  it,  and 
proceed  to  sell  at  the  time  fixed  in  the  original  notice.  Tliis 
would  enable  the  mortgagee  to  mislead  the  mortgagor,  and  would 
confuse  persons  wishing  to  purchase  as  to  the  time  of  sale.^ 

1875.  There  is  no  obligation  to  delay  sale  to  more  favorable 
time.  If  a  mortgagee  sells  openly  and  fairly,  and  in  compliance 
with  the  terms  of  the  power,  it  cannot  be  objected  that  he  might 
have  obtained  a  greater  price  by  waiting  until  a  more  favorable 
time.  No  such  obligation  is  imposed  by  the  mortgage.^  In  a  case 
before  the  Court  of  Appeal  in  Chancery,  in  relation  to  a  sale  by 
private  contract,  Lord  Justice  Knight  Bruce  said :  "  It  may  be 
that,  by  speculating  and  waiting  a  long  time,  a  larger  sum  would 

1  Hosmer  v.  Sargent,  8  Allen  (Mass.),  *  Jackson  v.  Clark,  7  Johns.  (N.  Y.) 
97;  Stearns  v.  Welsh,  7  Hun  (N.  Y.),  217;  Dana  v.  Farrin<,'ton,  4  Minn.  433; 
676  ;  Allen  v.  Cole,  9  N.  J.  Eq.  286  ;  Coxe  Bennett  v.  Brundage,  8  Minn.  432  ;  Sayles 
I'.  Halsted,  2  lb.  31 1.  The  last  three  cases  v.  Smith,  12  Wend.  (N.  Y.)  57  ;  Wcstgate 
relate  to  foreclosure  sales  in  equity.     IIos-  v.  Handlin,  7  How.  (N.  Y.)  Pr.  372. 

mer  v.  Sargent,  8  Allen  (Mass'.),  97.  *  Jackson  v.  Clark,  supra.     The  post- 

2  Griffin  v.  Marine  Co.  of  Chicago,  52  ponement  was  published  under  the  orig- 
in. 130  ;  Thornton  v.  Boyden,  31  111.  200.     inal  notice  as  follows  :    "  Note,  the  sale  of 

8  See  Statutory  Provisions  for  Michi-     the  above  property  is  postponed  to  Wednes- 

gan:  §  1741.  day,  the  3d  day  of  Seiitember  next." 

Minnesota:  §  1743.  "  Franklin  v.  Greene,  2  Allen  (Mass.), 

New  York  :  §  1751.  519. 
Wisconsin:  §  1762. 

676 


WHO  MAY  PURCHASE   AT   SALE   UNDER  POWER.        [§  1876. 

thereafter  have  been  obtainable,  had  the  sale  not  taken  place  as  it 
did.  But  Mr.  Durrant  (the  mortgagee)  was  not  bound  to  spec- 
ulate or  wait,  and  was  justified  in  accepting  Mr.  Packe's  price, 
which  was,  I  repeat,  in  my  opinion,  a  reasonable  and  fair  price."  ^ 

11.    Who  may  purchase  at  Sale  under  Power. 

1876.  Mortgagee  not  allowed  to  purchase.  —  The  mortgagee 
being  regarded  as  in  some  respects  a  trustee  of  the  property  mort- 
gaged, as  a  rule,  cannot  himself  become  a  purchaser  at  the  sale 
either  directly  or  indirectly  through  another  person,  unless  this 
right  be  given  him  by  the  terms  of  the  power.^  He  is  bound  to 
exercise  entire  good  faith  ;  and  if  without  express  authority  given 
him  so  to  do  he  becomes  the  purchaser  at  the  sale,  he  is  subject 
to  the  rule  which  applies  generally  to  a  trustee  and  prohibits  his 
purchasing  the  trust  property.^ 

If  the  mortgagee,  when  not  authorized,  purchases  at  the  sale, 
the  mortgagor  or  any  other  person  interested  under  him  may  dis- 
affirm the  sale,  provided  he  acts  within  a  reasonable  time.*  Such 
a  sale  is  voidable  only,  and  cannot  be  treated  in  a  suit  at  law  as 
absolutely  void,  unless  actual  fraud  be  shown  ;  ^  and,  being  good 
till  it  is  set  aside,  will  support  an  action  of  ejectment.^  A  bene- 
ficiary under  the  trust,  or  a  mortgagee  who  becomes  a  purchaser, 
is  regarded  only  as  a  mortgagee  in  possession  in  consequence  of 
the  sale  and  conveyance ;  but  is  entitled  to  be  treated  as  the 
owner  of  tlie  property  until  it  is  redeemed."  If  the  mortgagor 
does  not  claim  his  right  to  avoid  such  a  sale,  the  mortgagee  may 

1  Davey  i-.  Durrant,  1  De  G.  &  J.  535.      head  v.  Hcllen,  76  N.  C.  99  ;  Kornegay  v. 

2  Downes  v.  Grazebrook,  3  Mer.  200 ;     Spicer,  76  N.  C.  95. 

7n  re  Bloye's  Trust,   1   Mac.  &  G.  488  ;  •»  Munn  v.  Burges,  70  111.  604  ;  Farrar 

Lockctt  I'.  Hill,  1   Woods,  552  ;  Griffin  v.  v.  Payne,  73  111.  82  ;  Johnson  w.  Watson, 

Marine  Co.  52  111.  1.30 ;  Waitc  v.  Denni-  87  111.  535  ;  Thornton  v.   Irwin,  43  Mo. 

son,  51   III.  319;  Phares  v.  Barbour,  49  1.53;  Allen  v.  Ranson,  44  Mo.  263;  Mc- 

111.  370  ;  Iloberts  v.  Fleming,  53  III.  196  ;  Lean  v.  Presley,   56  Ala.  211  ;  Joyner  v. 

Ross  V.   Demoss,    45    III.    448  ;    Hall    v.  Farmer,  78  N.  C.  196. 

Towne,  45  111.  493  ;  Watson  v.  Sherman,  *  Patten  w.  Pearson,  57  Me.  428  ;  Burns 

84  111.  263.  V.  Thayer,  115  Mass.  89  ;  Mulvey  v.  Gib- 

*  Michoud  V.  Girod,  4  How.  503  ;  Par-  bona,  87  111.  367. 

menter  y.  Walker,  9  U.  I.  225  ;  Korns  (;.  8  Hawkins  y.  Hudson,  45  Ala.  482.    See 

Shaffer,  27  Md.  83  ;  Howard  v.   Ames,  3  Whitehead  v.  Ilcllen,  76  N.  C.  99,  a  wrong 

Met.  (Mass.)  30H  ;  Ilyndman  v.  Hyndman,  decision. 

19  Vt.  9  ;  Benham   r.    Howe,  2  Cal.  3h7  ;  '  Goldsmith  v.  Osborne,  1  Edw.  (N.  Y.) 

Rutherford  v.  Williams,  42  Mo.  18;  White-  Ch.  562  ;  Rutherford  r.  Williams,  42  Mo. 

18. 

677 


§  1877.]       rOWKR    OF   SALK   mortgages   and   trust    DKI'DS. 

himsi'lf  conii'  into  equity,  to  have  the  uncertainty  of  his  title  re- 
moved by  a  oonlirmation  of  the  sale,  or  by  a  resale  under  order  of 
court.^ 

Where  the  notes  have  been  transferred  by  the  payee  to  a  firni 
of  which  he  is  a  member,  all  the  members  of  the  firm  are  equally 
prohibited  from  purchasing  at  the  sale.^  But  a  mortgagee  may 
purchase  an  outstanding  title,  or  the  equity  of  redemption,  either 
from  the  mortgagor,  or  from  his  grantee,  and  hold  the  title  abso- 
lutely in  his  own  right.  He  may  purchase  under  a  judgment  of 
prior  date  to  the  mortgage.^  But  if  the  purchase  be  aided  by  the 
mortgagor,  or  he  be  fraudulently  prevented  by  the  mortgagee 
from  purchasing  himself,  and  the  mortgagee  has  taken  advantage 
of  his  position,  he  will  hold  the  title  acquired  for  the  benefit  of 
the  mortgagor  as  his  trustee.* 

The  mortgagee  may  also  purchase  from  the  mortgagor,  unless 
the  mortgagee  uses  his  position  to  obtain  the  equity  of  redemption 
at  an  inadequate  price. ^  As  "  between  mortgagee  and  mortgagor 
there  is  nothing  analogous  to  a  trust  until  the  whole  mortgage 
debt  has  been  paid  and  satisfied ;  from  which  moment,  and  not 
until  then,  the  mortgagee  becomes  a  trustee  for  the  mortgagor."  ^ 

When  a  third  person  has  in  good  faith  purchased  at  the  mort- 
gage sale,  the  mortgagee  may  purchase  of  him.  His  trust  is 
ended  with  the  sale.''  But  if  there  was  a  previous  arrangement 
between  him  and  the  purchaser  for  a  reconveyance  the  trust  may 
still  attach  to  him,  and  the  title  he  has  acquired  will  be  voidable.^ 
The  presumption  is  in  favor  of  the  mortgagee  that  he  has  fulfilled 
his  trust  until  the  contrary  is  shown. 

1877.  It  is  not  necessary  in  order  to  avoid  the  sale  to  show 
that  there  -was  any  actual  fraud  or  unfairness  in  the  transaction, 
when  a  mortgagee  has  violated  the  principle  that  a  trustee  can 
never  be  a  purchaser.  There  might  be  fraud  or  unfairness,  and 
yet  this  could  not  be  proved.     To  guard  against  this  uncertainty, 

>  McLean  r.  Parley,  56  Ala.  211.  6  Per   Wood,   V.    C,  in    Kirkwood   v. 

2  Mapps  V.  Sharpe,  32  111.  13.  Thompson,  2  J.  &  H.  392. 

3  Roberts  v.  Fleming,  53  111.  196  ;  Har-  '^  Watson  v.  Sherman,  84  111.  263.     See 
risen  v.  Roberts,  6  Fla.  711  ;  Walthall  v.  §  1880. 

Rives,  34  Ala.  92.  »  Munn  v.  Btirges,  70  111.  604;  Bush  v. 

*  Griffin  v.  Marine  Co.  of  Chicago,  52  Sherman,  80  111.  160;  Hoit  v.  Russell,  56 

111.  1.30.  N.  H.  559 ;  Whitehead  v.  Hellen,  76  N.  C. 

6  Ford  V.  Olden,  L.   R.  3  Eq.  461  ;   36  99. 
L.  J.  C.  651. 

678 


WHO   MAY    PURCHASE    AT    SALE   UNDER   POWER.       [§§  1878,  1879. 

and  to  place  the  trustee  beyond  the  reach  of  temptation,  the  law 
allows  the  cestui  que  triist  to  set  aside  such  a  sale  at  his  option 
without  showing  that  he  has  been  in  any  way  injured.  A  mort- 
gage with  a  power  of  sale  confers  a  trust  coupled  with  an  interest, 
but  the  rule  applies  with  the  same  force  as  in  the  case  of  a  naked 
trust.  Without  the  agreement  or  consent  of  the  mortgagor  he 
can  acquire  no  title  by  a  purchase  directly  or  indirectly  at  his  own 
sale  under  the  power.^ 

1878.  The  rule  applies  equally  to  the  mortgagee's  solicitor. 
If  the  power  of  sale  does  not  give  to  the  mortgagee  any  right  to 
purchase,  his  solicitor  or  agent  is  equally  with  himself  disabled 
from  becoming  the  purchaser  of  the  property  either  for  himself  or 
for  another.  The  mortgagee  in  such  case  occupies  a  fiduciary  re- 
lation to  others,  and  his  solicitor  who  conducts  the  sale  stands  in 
the  same  position  he  does  as  regards  a  purchase  of  the  property .^ 
He  is  bound  by  the  same  obligations  to  secure  the  best  possible 
results,  regardless  of  the  interest  of  all  other  persons,  except  the 
mortgagor  and  mortgagee.  Neither  can  he  act  for  a  third  party 
havinjr  a  different  interest,  in  nowise  identical  with  the  interest 
of  those  for  whom  he  is  first  bound  to  act.  By  reason  of  his  rela- 
tions to  the  mortgagee  he  is  bound  to  get  the  highest  price ;  and 
if  he  act  for  another  person  in  buying,  he  is  bound  to  obtain  the 
property  at  as  low  a  price  as  he  can.  These  characters  are  utterly 
inconsistent,  and  the  policy  of  the  law  does  not  allow  them  to  be 
united  in  the  same  person.^  Even  the  employment  by  a  pur- 
chaser of  a  clerk  of  the  mortgagee's  solicitor  to  bid  for  him  at  the 
sale  is  sulhcient  to  invalidate  it.* 

1879.  Mortgagee's  agent.  —  Doubts  were  at  first  expressed 
whetlier  one  who  has  ncU-d  as  the  agent  of  the  mortgagee  in  sur- 
veying the  property,  advancing  the  money,  and  receiving  the  in- 

1  Thornton  v.  Irwin,  4.3  Mo.  15.3  ;  Ruth-  Orme  v.  Wri^jht,  .3  Jur.  19  ;  York  Build- 
erford  v.  WiUinms,  42  Mo.  18;  Blockley  ings  Association  v.  Mnckcuzic,  8  Brown 
V.  Fowler,  21  Cal.  326.  Pari.   Cas.   App.   42  ;    Downes   v.  Graze- 

2  "Perhaps  he  is  upon  principle  the  brook,  3  Mer.  209;  Fox  v.  Mackrcth,  2 
person  of  all  others  diKaI)le<l,"  caid  Lord  Bro.  C.  C.  400;  Whitconih  i;.  Minchiu,  .^ 
Eldon,  in  Kx  pnrtr  Bennett,  10  Ves.  381,  Mad.  91;  Gardner  c.  O^dcn,  22  N.  Y. 
385.  "As  to  the  solicitor,"  says  the  Bame  327  ;  Campbell  v.  Swan,  48  Barb.  (N.  Y.) 
judge,  Ex  part'  JamcH,  8  Vch.  .337,  .340,  "  if  1 09. 

there  is  any  utility  in  npj)lying  the  princi-  ^  Dyer  v.  ShurtlelT,  112  Mass.  105. 

pal  against  the  assignee,  the  application  as  *  Parnell   v.  Tyler,  2  L.  J.  Ch.  N.  S. 

against  the  solicitor  i."*  more  loudly  called  195. 
for."     See,  also,  on   the  general  subject, 

079 


§§  1880,  18S1.]     rowi:R  ok  sai.k  mortgagks  and  trust  dekds. 

teivst,  is  a  compotcMit  ]niiH'li;\s(>r  umler  tho  ])o\ver  ;  but  on  apj)eal 
the  chaneellor  expressly  liekl  that  he  could  not  purchase.'  For 
stronger  reasons,  one  who  has  acted  for  the  mortgagee  in  advertis- 
ing the  property  and  in  making  the  sale  cannot  properly  purchase 
at  the  sale.- 

When,  however,  the  mortgagee  is  authorized  by  the  deed  to 
purchase  at  the  sale,  he  may  properly  arrange  beforehand  with  a 
third  person  to  bid  a  sum  not  less  than  the  amount  of  the  mort- 
gage and  the  incidental  expenses,  as  such  an  arrangement  has  no 
tendency  to  prevent  competition  at  the  sale,  or  to  depreciate  the 
price ;  but  on  the  contrary  makes  it  certain  that  the  sale  will  at 
least  pay  the  mortgage  debt.^ 

1880.  Under  the  same  rule  a  trustee  in  a  deed  of  trust 
cannot  buy  for  his  own  benefit  at  the  trust  sale.*  But  the 
mere  fact  that  the  trustee,  after  a  sale  by  him  to  a  third  person, 
purchased  the  premises  of  him  does  not  vitiate  the  original  sale. 
"  Whether  culpable  or  commendable  depends  upon  the  circum- 
stances of  each  case.  It  may  be  wrong,  and  it  may  be  right.  It 
may  be  approved  by  the  parties  interested  and  affirmed.  It  may 
be  condemned  by  them  and  avoided.  When  it  is  found  that  the 
transaction  is  itself  fair  and  honest,  that  the  purchase  was  not 
contemplated  at  the  original  sale,  but  was  first  thought  of  years 
afterwards,  and  was  then  made  for  a  full  and  fair  consideration 
actually  paid  by  the  trustee,  and  after  the  fiduciary  duty  was  at  an 
end,  we  find  no  authority  to  justify  us  in  pi'onouncing  the  original 
sale  to  have  been  fraudulent."  ^  If  a  trustee  buys  in  a  prior  mort- 
gage he  will  hold  it  for  the  benefit  of  his  cestui  que  trust,  upon 
being  reimbursed  the  amount  he  has  fairly  paid  for  it.^ 

1881.  Perhaps  there  is  less  strictness  in  applying  the  rule 
to  the  case  of  a  mortgagee  purchasing  at  his  own  sale  under  the 
power  than  there  is  in  the  case  of  a  trustee  purchasing.  The 
mortgage,  in  such  case  is  not  merely  a  trustee,  but  he  is  also  a 
cestui  que  trust,  and  if  he  were  not  allowed  to  become  a  purchaser 
under  any  circumstances  his  security  might  become  greatly  im- 
paired.'^    Accordingly  it  has  been  held  that  where  such  a  pur- 

1  Orme  v.  Wright,  3  Jur.  19,  972.  ^  Mr.  Justice  Hunt,  in  Stephen  v.  Beall, 

2  Hoit  V.  Russell,  56  N.  H.  559.  supra.     See  §  1876. 

8  Dexter  v.  Shepard,  117  Mass.  480.  «  Crutchfield  v.   Haynes,    14   Ala.   49; 

♦  Lassy.  Sternberg,  50  Mo.  124;  Stephen     Gunter  v.  Janes,  9  Cal.  64.3. 
V  Beall,  22  Wall.  329,  340.  7  Jq  Bergen  v.  Bennett,  1  Caincs  (N.  Y.) 

Cas.  1,  19,  Judge  Kent  said  :  "  It  has  been 

680 


WHO   MAY    PURCHASE   AT    SALE   U^'DER   POWER.        [§  1882. 

chase  is  made  with  the  knowledge  and  consent  of  the  mortgagor, 
in  the  absence  of  all  suspicion  of  fraud,  it  is  good  and  valid.^  At 
any  rate  the  mortgagor  would  not  be  allowed  to  avoid  the  sale 
after  waiting  several  years.^  The  purchase  being  made  with  the 
mortgagor's  consent  is  the  same  thing  in  effect  as  a  conveyance  of 
the  equity  by  the  mortgagor  to  the  mortgagee  at  private  sale. 

When  the  creditor  or  his  agent  buys  at  a  trustee's  sale  no  ob- 
jection to  the  sale  can  be  taken  because  the  purchase  money  is 
not  actually  paid  to  the  trustee.  It  would  be  an  idle  ceremony  to 
pay  over  the  money  and  immediately  receive  it  back  again.^ 

1882.  When  the  sale  is  made  by  judicial  process  there  is 
usually  no  restraint  upon  the  purchase  of  the  property  by  the 
morto-ao-e  creditor.*  The  sale  is  in  such  case  made  by  a  sheriff  or 
other  officer  appointed  by  the  court  or  designated  by  law,  and  the 
creditor  is  not  himself  the  seller.  The  case  is  just  the  same  as 
that  of  a  sale  upon  an  ordinary  execution  at  which  the  judgment 
creditor  has  full  liberty  to  buy.^  And  so  also  in  those  states  in 
which  there  are  statutes  which  regulate  all  sales  under  powers  in 
mortgages,  prescribing  in  detail  the  notices  that  must  be  given, 
and  specifically  providing  for  the  conduct  of  the  sale,  which  is 
made  by  a  public  officer,  there  is  not  the  same  objection  to  the 
mortgagee's  becoming  the  purchaser,  and  therefore  these  statutes 
generally  provide  also  that  the  mortgagee  may  fairly  and  in  good 
faith  purchase  the  whole  or  any  part  of  the  property.^ 

The  mortgagee  may  purchase  at  a  sale  under  a  power  that  runs 
to  himself,  if  the  sale  is  made  in  good  faith,  by  the  sheriff,  in  ac- 
cordance with  the  statute  ;  ^  but  not  if  his  own  agent  acts  as  auc- 
tioneer and  makes  the  certificate  and  affidavit  of  sale.^  Under  a 
trust  deed,  when  the  sale  is  made  by  a  disinterested  trustee,  the 

made  a  question,  whether  the  rule  would  cobs  v.  Turpin,  83  111.  424  ;  Beal  v.  Blair, 

apply    to   the  case  of  a  trustee  who  was  33  Iowa,  318. 

himself  a  cestui  que.  trust,  and  was  obliged         *  As  in  Maryland :  §  1740. 

to   purchase,  in  order   to  avoid  a  loss  to         '  Stratford  i-.  Twynam,  .lac.  418. 

himself  by  a  sale  at  n  les.s  price."     But  he         *■'  A.s  in  New   York:  §  1751. 

forebore  to  express  any  opinion  whether         Michigan:  §  1741. 

the  distinction  was  well  taken  or  not.    See,         Wisconsin:  §1762. 

also,  Hyde  v.  Warren,  40  Miss.  13,  29.  Illinois:  §  1733. 

1  Dobson  V.  Racey,  8  N.  Y.  216.  Minnesota:  §  1743. 

2  Med>ker  I'.  Swancy,  45Mo.  273;  Bcr-         Ehode  Island:  S  1756. 

gen  V.  Bennett,  1  Caines  (N.  Y.)  Cas.  1,         ^  Ramsey  u.  Mcrriain,  0  Minn.  168. 
19.  8  Allen  v.  Chaldeid,  8  Minn.  435. 

»  Weld  r.  Uees,  48  111.  428  ;  and  see  Ja- 

681 


§  1883.]     rowER  OF  salf,  morthagfs  and  trust  dkkds. 

beiu>ru'iary  may  onlinarlly  imrcliase.  The  holder  of  a  note  se- 
cunnl  by  a  trust  dood  may  buy  at  the  sale.  lie  may  leave  a  bid 
with  the  auctioneer,  and  the  purchase  uiulcir  it  will  be  valid  if  it 
is  the  hiijjhost  that  can  be  obtained  ;  ^  but  if  there  is  any  unfair- 
ness on  his  part,  such  as  a  representation  at  the  sale  that  the  mort- 
gagor would  have  a  right  to  redeem  from  the  sale  within  twelve 
months,  when  there  was  no  such  right  of  redemption,  and  the 
property  in  consequence  brought  only  about  half  its  value,  it  will 
be  held  that  the  sale  may  be  avoided.^ 

In  ]\Iissouri,  however,  it  is  held  that  where  the  mortgage  pro- 
vides for  a  sale  by  the  mortgagee,  or  in  case  of  his  refusal  to  act, 
by  the  marshal,  they  are  for  the  purposes  of  the  sale  co-trustees, 
and  the  mortgagee  cannot,  by  refusing  to  make  the  sale,  relieve 
himself  of  his  disability  to  purchase  at  the  sale  by  the  marshal.^ 

In  New  York  the  mortgagee  by  statute  is  allowed  to  purchase 
at  the  sale  ;*  but  independently  of  the  statute,  it  was  there  held 
that  he  had  a  perfect  right  to  purchase  at  his  own  sale.^  He  is 
not  there  regarded  as  occupying  a  fiduciary  relation  to  the  mort- 
gagor. The  foreclosure  and  sale,  when  the  mortgagee  becomes 
the  purchaser,  is  as  complete  a  bar  of  the  equity  of  redemption  as 
when  any  one  else  becomes  the  purchaser.^  An  agent  may  bid 
for  him  at  the  sale  without  disclosing  the  fact  of  the  agency  ;  and 
this  is  no  fraud  on  other  bidders,  as  he  has  a  riglit  to  buy  and 
would  be  bound  to  take  the  property  if  struck  off  to  him.'' 

In  Mississippi  the  court  in  a  recent  case  cited  cases  in  which 
this  right  was  said  to  be  recognized,  but  gave  no  opinion  upon  it.^ 

In  Texas  it  is  held  that  the  mortgagee  may  purchase  at  his 
own  sale  under  a  power,  if  there  be  no  unfairness  in  it.  It  is  de- 
clared to  be  for  the  interest  of  the  mortgagor  that  the  mortgagee 
should  enter  into  competition  at  the  sale.  The  sale  being  open 
and  made  after  proper  publication  of  notice  should  not  be  ira- 
peaclied  though  made  to  the  mortgagee.^ 

1883.  A  provision   in  express  terms  that  the  mortgagee 

1  Richards  v.  Holmes,  18  How.  (U.  S.)     Caines  (li.  Y.)  Cas.  1 ;  Slee  v.  Manhattan 
143.  Co.  1  Paige  (N.  Y.),  48. 

2  Bloom  V.  Rensselaer,  15  111.  503.  «  Lansing  v.  Goelet,9  Cow.  (N.  Y.)  346. 
'  Gaines  v.  Allen,  58  Mo.  537.  ">  National  Fire  Ins.  Co.  v.  Loomis,  11 
*  3  R.  S.  6th  ed.  847,  §  7.                             Paige  (N.  Y.),  431. 

6  Elliott   V.    Wood,   53   Barb.    (N.  Y.)         »  Hyde  v.  Warren,  46  Miss.  13. 
285  ;  aff' d  45  N.  Y.  71 ;  Hubbell  v.  Sibley,         ^  Howards  v.  Davis,  6  Tex.  174. 
5  Lans.  (N.  Y.)  51  ;  Bergen  v.  Bennett,  1 

682 


WHO    MAY    PURCHASE   AT    SALE   UNDER   POWER.        [§  1883. 


may  purchase  is  usually  found  in  the  mortgage  deed,  where 
power  of  sale  mortgages  are  in  general  use,  and  there  is  no  stat- 
ute authorizing  the  mortgagee  to  purchase  at  his  sale  under  the 
power.  It  has  sometimes  been  declared  that  this  privilege  should 
be  strictly  construed  and  should  not  be  favored ;  ^  but  it  is  gen- 
erally held  that  under  such  a  provision  the  court  will  not  in- 
terfere with  a  purchase  by  the  mortgagee,  unless  there  be  some 
other  objection  which  would  generally  invahdate  a  purchase  by 
any  one  else  under  the  same  circumstances.^  The  right  of  the 
mortgagee  to  purchase  under  such  a  provision  is  fully  sustained 
by  the  courts.  Lord  Eldon  clearly  intimates  that  under  such 
authority  a  trustee  might  become  a  purchaser  of  the  trust  prop- 
erty ;  2  and  a  mortgagee  is  not  a  mere  trustee,  but  has  interests 
of  his  own  to  protect.* 

If  the  mortgagee  avails  himself  of  his  right  to  purchase  under 
a  provision  in  the  power  giving  him  this  privilege,  he  will  be  held 
by  a  court  of  equity  to  the  strictest  good  faith  and  the  utmost 
diligence  in  the  execution  of  the  power  for  the  protection  of  the 


1  Mann  v.  Burges,  70  111.  604;  Griffin 
V.  Marine  Co.  of  Chicago,  52  111.  130. 

2  Elliott  V.  Wood,  45  N.  Y.  71 ;  Mont- 
pomery  v.  Dawes,  12  Allen  (Mass.),  397; 
and  see  Davey  v.  Durrant,  1  De  G.  &  J.  535. 

8  Downes  v.  Grazebrook,  3  Mer.  200. 
He  says :  "  A  trustee  for  sale  is  bound  to 
bring  the  estate  to  the  hammer  under  every 
possible  advantage  to  his  cestui  que  trust- 
He  may,  if  he  pleases,  retire  from  being  a 
trustee,  and  divest  himself  of  that  charac- 
ter, in  order  to  qualify  himself  to  become 
a  purchaser  ;  and  so  he  may  purchase,  not 
indeed  from  himself  as  trustee,  but  under 
a  specific  contract  with  his  cestui  que  trust. 
But,  while  he  continues  to  be  a  trustee,  ho 
cannot,  without  the  express  authority  of 
his  cestui  que  trust,  have  anything  to  do 
with  the  fniBt  property  as  a  purchaser." 
In  Elliott  V.  Wood,  supra,  Mr.  Justice 
Allen  said  :  "  Powers  of  sale  are  construed 
liberally  for  the  purpose  of  effecting  the 
general  object,  and  neither  tbe  interest  of 
the  morfgiigoe  nor  mortgngor  will  be  ad- 
vanced by  forbidding  purchase  by  the  mort- 
gagee.    The  security   of    the   mortgagee 


would  be  less  valuable,  and  the  mortgagor 
would  lose  the  benefit  of  the  competition 
of  the  mortgagee  upon  the  sale."  In  the 
case  of  Griffin  v.  Marine  Co.  of  Chicago, 
52  m.  130,  it  was  said  that  the  clause,  con- 
ferring upon  the  mortgagee  the  right  to 
purchase  at  his  own  sale,  is  subject  to  a 
strict  construction,  and  to  be  regarded  with 
disfavor  by  the  courts.  It  is  conceived 
that  this  is  an  erroneous  view  of  the  sub- 
ject, whatever  may  be  thought  of  the  cor- 
rectness of  the  decision  of  the  case  before 
the  court.  The  mortgage  there  author- 
ized the  mortgagee  "  to  become  ])urchaser 
at  said  sale,  or  any  member  or  members 
of  the  firm  of  H.  A.  Tucker  &  Co.  may 
become  a  purchaser  at  such  sale,  provided 
his  or  her  bid  for  said  i)ropcrty,  or  any 
portion  thereof."  It  was  held  that  the 
right  to  purchase  was  intcn<lcd  to  be  upon 
conditions  not  fully  expressed,  and  the 
langungc  not  being  intelligible,  the  clause 
should  be  disregarded  entirely  ;  and,  there- 
fore, that  the  mortgagee  had  no  power  to 
purchase. 

*  Waters  v.  Groom,  11  CI.  &  Fin.  684. 
683 


§  1SS4.]       rOWKR   OF   SALK   MORTGAGFS   AND   TRUST   DKKDS. 

rights  of  tho  mortgagor,  ami  lii.s  failure  in  cither  particular  will 
jrive  oocasiou  to  allow  the  inort<rairor  to  redeem.^ 

1884.  This  rule  has  no  application  to  a  subsequent  mort- 
gagee who  buys  at  a  sale  under  a  prior  mortgage,  although  under 
liis  own  security  he  hoUls  the  position  of  a  trustee  to  sell,  and  is 
debarred  from  purchasing  at  a  sale  under  his  own  power.^  This 
decision  of  the  Master  of  the  Rolls  in  the  leading  case  of  Shaw 
V.  Bunny  was  afhrmed  by  the  Court  of  Appeals  in  Chancery,^ 
where  Lord  Justice  Knight  Bru(!e  said :  "  There  being,  I  think, 
not  any  special  circumstance  in  the  pi-esent  instance  to  prejudice 
or  affect  the  purchaser's  right,  his  title  against  the  mortgagor  to 
the  benefit  of  the  purchase  seems  to  me,  also,  as  absolute  as  that 
of  a  mere  stranger  purchasing  would  have  been.  I  consider,  I  re- 
peat, in  accordance  with  the  view  of  the  Master  of  the  Rolls,  that 
there  was  nothing  to  preclude  the  second  mortgagee  from  buying 
in  the  circumstances  in  which  he  bought,  and  retaining  his  pur- 
chase. If,  indeed,  he  had  availed  himself  of  his  position  as  a 
mortgagee  to  procure  some  facility  or  advantage  leading  to  the 
purchase,  or  connected  with  it,  that  might  have  made  a  difference. 
But  I  see  no  such  case.  It  seems  to  me  immaterial  that  the  pur- 
chaser would  not  (if  he  could  not)  have  been  informed  of  the  in- 
tended sale  had  he  not  been  a  mortgagee." 

But  if  the  second  incumbrancer  is  not  merely  a  mortgagee,  but 
holds  the  equity  of  redemption  in  trust  for  sale  on  default  in  the 


^  Montague  v.  Dawes,  14  Allen  (Mass.), 
369. 

2  Shaw  V.  Bunny,  33  Beav.  494  ;  2  Do 
G.,  J.  &  S.  468  ;  Kirkwood  v.  Tlionipson, 
2  J.  &  II.  392  ;  11  Jur.  N.  S.  38.5  ;  2  De 
G.,  J.  &  S.  613  ;  Parkinson  v.  Hanbury,  1 
De  G.  &  Sm.  143  ;  2  De  G.,  J.  &  S.  450. 

8  Shaw  i;.  Bunny,  13  W.  R.  374  ;  2  De 
G.,  J.  &  S.  468.  The  sale  in  this  case  was 
not  by  auction  but  private.  Lord  Justice 
Turner,  who  also  sat  in  this  case,  expressed 
some  doubt  as  to  the  view  taken  by  his 
associate  and  by  the  Master  of  the  Rolls; 
but  as  remarked  by  Lord  Chancellor  Cran- 
worth,  in  Kirkwood  v.  Thompson,  2  De  G., 
J.  &  S.  613,  the  authority  of  the  decision 
is  in  no  way  affected  thereby.  The  Lord 
Chancellor  moreover  approved   the  deci- 

684 


sion,  and  supported  it  by  strong  arguments. 
After  showing  that  a  mortgagee  can  pur- 
chase from  his  mortgagor  he  said  :  "  The 
next  step  is,  can  he  purchase  under  a 
power  of  sale  executed  by  a  first  mort- 
gagee 1 

It  seems  to  me  to  follow  as  a  necessary 
corollary,  because  the  sale  that  is  made 
under  the  power  of  sale  by  a  first  mort- 
gagee is  substantially  a  sale  by  the  mort- 
gagor, for  it  is  a  sale  made  under  an  au- 
thority given  by  the  mortgagor  paramount 
to  the  title  of  the  second  mortgagee.  It 
seems  to  me,  that  on  the  principle  of  the 
case  there  is  no  difference  whatever  be- 
tween a  purchase  from  a  first  mortgagee 
under  a  power  of  sale  and  a  purchase 
from  the  mortgagor  himself." 


WHO   MAY   PURCHASE   AT   SALE   UNDER   POWER.        [§  1885. 

payment  of  the  debt,  he  is  incapacitated  from  purchasing  at  a 
sale  by  the  first  mortgagee.     He  is  in  such  case  a  trustee.^ 

The  circumstances,  however,  that  the  second  mortgage  is  in 
the  form  of  a  conveyance  in  trust  to  sell,  and  out  of  the  proceeds 
to  pay  the  debt  secured  to  the  grantee  and  all  other  incumbrances, 
and  pay  over  the  surplus  to  the  mortgagor,  does  not  prevent  his 
purchasing  under  the  prior  mortgage.^  "  As  between  the  mort- 
gagor, the  person  conveying,  and  the  person  to  whom  it  was  con- 
veyed in  trust  to  sell,  it  certainly  was  a  mortgage  as  far  as  he  was 
concerned.  He  took  possession,  and  he  taking  possession  would 
be  liable  to  account  as  mortgagee.  It  cannot  be  contradicted  that 
between  the  parties  conveying  and  the  parties  to  whom  it  was 
conveyed,  it  certainly  was  a  mortgage.  It  is  possible  —  I  do  not 
say  whether  that  would  be  so  —  that  there  might  have  been  dif- 
ferent duties  as  between  him  and  the  mortgagor  if  he  had  sold, 
than  would  have  existed  in  the  case  of  a  simple  mortgage.  But 
what  took  place  is  something  that  comes  in  paramount  and  prior 
to  the  exercise  of  the  duties  as  trustee ;  he  never  can  sell,  because 
persons  having  a  paramount  title  to  his  title  choose  to  exercise 
that  right,  and  therefore  prevent  the  possibility  of  his  exercising 
his  riglit,  which  is  a  trust  only  to  arise  if  it  was  ever  in  his  power 
to  sell,  which  it  was  not,  in  consequence  of  the  sale  made  by  the 
prior  mortgagees."  ^ 

It  is,  moreover,  immaterial  that  the  second  mortgagee  is  in  pos- 
session at  the  time  of  this  purchase  under  the  power  in  the  first 
mortgage.  His  possession  creates  no  new  obligation  except  to 
account.  Otherwise  his  relation  as  mortgagee  remains  the  same 
as  if  he  had  not  been  in  possession.'*  The  fact  of  his  possession 
does  not  prevent  his  purchasing  the  equity  of  redemption  on  an 
execution  sale  liad  u[)on  a  judgtncMit  in  favor  of  a  third  person. '"^ 

1885.  The  right  to  avoid  such  a  sale  is  waived  by  delay. 
When  a  mortgagee  purchases  at  a  sale  under  a  power  in  a  mort- 
gage, which  does  not  give  him  tlie  right  to  purchase,  the  tMjuita- 
ble  owner  may  set  it  aside  and  recover  the  property,  or  he  may 
at  his  election  affirm  it  and  have  the  price  obtained  applied  to 
the  mortgage  debt  and  receive  the  surplus  if  there  be  any.     But 

1  Parkinson  v.  Iliinbury,  2  De  G.,  J.  &  *  Per  Lord  Chancellor  Crnnwortli  in 
S.  450.  Kirkwood  v.  Thompson,  supra. 

2  Kirkwood  v.  Thompson,  2  DcG.,  J.  &         *  Kirkwood  i'.  Thompson,  supra. 
S.  613.  5  Ten  Eyck  i;.  Crai^,',  62  N.  Y.  406. 

685 


§§  1886, 1887.]    POWER  of  sale  mortgages  and  trust  dekds. 

this  right  to  iivoid  the  s;ilo  will  ho  treated  as  waived  unless  as- 
serted within  a  reasonahle  time.^  What  delay  will  be  regarded 
as  a  waiver  of  this  right  depends  upon  the  circumstances  of  the 
case  ;  there  can,  of  course,  be  no  fixed  rule.  After  a  lapse  of 
thirteen  years,  during  which  no  payment  of  interest  or  principal 
liad  been  matle  or  offered  by  any  one  on  account  of  the  mortgage 
debt,  the  owner  of  the  equity  of  redemption  was  not  allowed  to 
redeem,  though  he  was  not  notified  of  the  sale  and  had  no  actual 
knowledge  of  it." 

1886.  If  the  title  acquired  by  a  mortgagee  in  this  way  has 
passed  into  the  hands  of  a  bona  fide  purchaser  without  notice, 
and  for  an  adequate  consideration,  the  sale  cannot  afterwards  be 
impeached.'^  Such  a  sale  being  voidable  only,  and  not  void,  the 
title  passes  to  the  nominal  purchaser,  and  any  proceedings  to  set 
aside  the  sale,  to  be  effectual,  must  be  commenced  before  he  con- 
veys to  another  who  purchases  in  good  faith. 

1887.  A  mortgagor  may  purchase  at  a  sale  under  his  own 
mortgage ;  but  if  he  has  given  a  subsequent  mortgage  upon  the 
same  property,  his  purchase  will  not  defeat  this ;  but  will  operate 
for  the  benefit  of  it  in  the  same  way  as  a  discharge,  or  a  transfer 
of  the  mortgage  to  himself.*  He  cannot  set  up  against  his  own 
incumbrance  another  one  which  he  has  himself  created.  Whether 
the  mortgagor  would  stand  in  any  better  position  as  regards  the 
subsequent  incumbrancer,  if,  instead  of  purchasing  directly  under 
the  power,  the  estate  had  been  sold  under  the  power  to  a  stranger 
and  subsequently  purchased  from  such  stranger  by  the  mortgagor, 
is  a  question  raised  but  not  decided  in  the  case  last  cited. 

A  subsequent  purchaser  of  an  undivided  half  of  the  mortgaged 
premises  may  purchase  them  at  a  sale  under  the  power.     His  re- 


1  Nichols  V.  Baxter,  5  R.  I.  491  ;  Munn 
V.  Burges,  70  111.  604  ;  Joyner  v.  Farmer, 
78  N.  C.  196. 

2  Learned  v.  Foster,  117  Mass.  365. 

8  Dexter  v.  Shepard,  117  Mass.  480; 
Bums  V.  Thayer,  115  Mass.  89  ;  Benham 
V.  Rowe,  2  Ciil.  387  ;  Blockley  v.  Fowler, 
21  Cal.  326 ;  Rutherford  v.  Williams,  42 
Mo.  18  ;  Robinson  i-.  Cullom,  41  Ala.  693; 
Thurston  y.  Prentiss,  1  Mich.  193;  Miles 
V.  Ransford,  1  Mich.  338. 

*  Otter  i;.  Lord  Vaux,6  De  G.,  M.  &  G. 

686 


638.  This  principle,  that  a  mortgagor 
cannot  set  up  an  after-acquired  title 
against  his  own  incumbrancer,  has  been 
carried  to  the  extent  of  holding  that  a 
mortgagee,  purchasing  the  equity  of  re- 
demption, could  not  set  up  his  own  mort- 
gage agc^inst  a  subsequent  mortgiige  made 
by  the  same  mortgagor.  But  in  Toulmin 
V.  Steere,  3  Mer.  210,  the  correctness  of 
this  proposition  has  been  questioned,  and 
cannot  now  be  regarded  as  law.  Otter 
V.  Lord  Vaux,  supra. 


THE   DEED   AND   TITLE.  [§§  1888,  1889. 

lations  to  the  mortgagor  are  not  of  such  a  confidential  nature  as 
prevent  his  buying.^ 

1888.  The  wife  of  the  mortgagor  may  become  a  purchaser 
under  the  power  of  sale,  and  hold  the  estate  as  her  sole  and  sep- 
arate property,  when  the  conveyance  is  made  to  her  in  the  name 
of  the  mortgagee,  and  not  as  attorney  of  the  mortgagor.  The 
technical  objection,  that  a  husband  cannot  directly  convey  to  his 
wife,  does  not  apply .^  It  would  seem  on  principle  that  it  would 
make  no  difference  as  to  the  wife's  right  to  purchase  whether  the 
husband  had  before  the  sale  parted  with  his  equity  of  redemption, 
though  in  the  case  cited  he  had  already  conveyed  his  interest ;  for 
the  mortgagee  had  the  legal  title,  and  he  could  without  doubt  as- 
sign his  mortgage  to  the  mortgagor's  wife.  It  is  different  from 
the  case  of  a  purchase  of  an  equity  of  redemption  on  execution  by 
the  wife  of  the  judgment  debtor.  The  sheriff  has  no  title  and 
exercises  only  a  statute  power ;  and  the  husband  has  a  right  to 
redeem,  which  he  could  not  enforce  by  suit  against  his  wife.  Such 
a  sale,  if  it  could  be  made,  would  operate  as  a  conveyance  of  the 
husband's  title  directly  from  him  to  his  wife.^ 

12.    The  Deed  and  Title. 

1889.  Holder  of  legal  title  should  make  the  deed  under  the 
power  of  sale.  The  assignee  has  the  same  authority  in  this  re- 
spect that  the  mortgagee  himself  had  if  the  power  is  expressly 
giren  to  his  assigns.*  Upon  the  death  of  the  assignee  his  execu- 
tor or  administrator  may  execute  the  power,  though  it  be  only  to 
the  mortgagee,  "his  heirs,  executors,  administrators,  or  assigns."" 
Under  a  statute  providing  for  a  sale  under  the  power  by  a  sheriff 
or  other  officer,  such  officer  stands  in  the  place  of  the  mortgagee 
in  exercising  the  power  of  sale  ;  he  executes  the  deed  to  the  pur- 
chaser by  virtue  of  the  power.  The  provision  of  statute  has  the 
same  effect  as  if  made  part  of  the  mortgage  deed.^ 

So,  also,  a  trustee  selling  under  a  deed  of  trust  conveys  the  title 
and  estate  that  was  vested  in  him  by  the  trust  deed.  He  is  not 
required  to  enter  into  any  personal  covenants  himself  against  gen- 
eral incumbrances,  though  he  usually  covenants  against  such'  as 

1  Burr  V.  Mueller,  65  III.  2.')8.  '  Saloway  v.  Strawbridge,    1  Jur.  N.  S. 

2  Field  V.  Goo.litiK',  lOf,  Mass.  310.  1194;  7  Dc  G.,  M.  &  G.  594;  I  K.  &  J. 
8  Stetson  i;.  O'Snllivan,  8  Allen,  321.          371. 

*  Heath  v.  Hull,  60  111.  344.  6  Hoffman  v.  Harrington,  33  Mich.  392. 

687 


§§  1800,  1801.]     rowKR  of  salk  mortgages  and  trust  deeds. 

iiro  iloiu'  1)1-  sutTori'd  h\  liiinsclf.  'I'lu'  purcliastn'  is  bound  to  know 
that  there  can  be  no  personal  warranty  of  title.  He  is  also  bound 
to  take  notice  of  the  title  as  it  stands  in  the  trustee  with  all  its 
defects  as  it  aj)i>ears  of  record.' 

A  trustee  can  make  but  one  sale  and  deed,  and  if  he  attempts 
to  make  a  second  deed  the  <^rantee  will  take  no  title. '-^ 

The  deed  shoulil  recite  the  power  by  virtue  of  which  the  sale  is 
made,  though  perhaps  such  a  recital  is  not  necessary  as  a  matter 
of  law.^  If  the  deed  be  made  by  an  attorney  of  the  mortgagee,  his 
authority  should  be  evidenced  by  a  writing  under  seal,  although 
the  power  of  sale  expressly  authorizes  the  mortgagee,  his  legal 
representatives,  or  attorney,  to  convey.  But  a  deed  executed  by 
an  attorney  not  so  authorized  may  be  regarded  as  conveying  to 
the  purchaser  an  equitable  interest  in  the  premises,  which  he  may 
set  up  in  bar  of  a  suit  in  equity  to  have  the  sale  set  aside.* 

1890.  If  the  mortgagee  be  a  married  woman  she  may  exe- 
cute the  power  of  sale  in  her  own  name,  and  it  is  not  necessary 
for  her  husband  to  join  in  the  conveyance  or  consent  thereto  in 
writing,  as  is  provided  by  statute  in  case  of  a  conveyance  of  her 
own  real  property.^ 

1891.  When  the  power  authorizes  the  donee  to  execute  a 
deed  in  the  name  of  the  mortgagor,  or  as  his  attorney,  it  must 
be  so  executed  ;  and  the  deed  of  sale  will  then  be  the  deed  of  the 
donor  of  the  power  and  not  of  the  donee.^  In  such  case  if  the 
deed  be  in  the  name  of  the  mortgagee,  although  it  may  not  con- 
vey a  good  title  in  fee  simple  at  law,  it  will  pass  an  equity  to  the 
grantee.'  But  the  power  was  formerly  and  is  now  more  frequently 
given  to  be  exercised  by  the  donee,  and  in  such  case  the  deed  of 
sale  must  be  executed  in  the  name  of  the  donee  of  the  power.^  It 
is  often  the  case  that  the  power  is  given  in  the  alternative,  and 
then  the  deed  of  sale  may  be  executed  in  either  form,  or  in  both 
forms.  When  the  power  is  "  to  make,  execute,  and  deliver  to 
the  purchaser  or  jsurchasers  thereof  all  necessary  conveyances  for 
the  purpose  of  vesting  in  such  purchaser  or  purchasers  the  prem- 
ises so  sold  in  fee  simple  absolute,"  it  may  be  executed  by  the 

1  Barnard  v.  Duncan,  38  Mo.  170.  '^  Cranston  v.  Crane,  97  Mass.  459. 

2  Kocster  v.  Burke,  81  111.  4.3G.  6  gpeer  v.  Haddock,  31  111.  439. 

3  Smith  V.  Ilenning,  10  W.  Va.  596.  7  Mulvey  v.  Gibbons,  87  111.  3G7. 
*  Watson  V.  Sherman,  84  111.  263.  »  Munn  v.  Burges,  79  111.  C04. 

688 


THE    DEED    AND    TITLE.  [§  1892. 

deed  of  the  mortgagee  in  bis  own  name  ;  though  it  might,  per- 
haps, be  executed  by  him  as  the  attorney  of  the  mortgagor.^ 

An  administrator  who  has  taken  a  power  of  sale  mortgage  in 
which  he  is  described  as  administrator  should  execute  a  deed 
under  the  power  contained  in  the  mortgage  in  his  own  name, 
right,  and  character,  and  not  as  administrator,  as  he  does  not  hold 
the  land  in  that  character,  and  cannot  exercise  the  power  in  that 
capacity  .- 

1892.  A  mortgagee  purchasing  may  make  a  deed  to  him- 
self. The  courts  have,  in  some  instances,  intimated  that  upon  a 
sale  under  a  power  in  a  mortgage,  the  mortgagee,  although  author- 
ized by  the  terms  of  the  power  to  become  a  purchaser  at  the  sale, 
cannot  make  the  deed  directly  to  himself ;  but  must  convey  to  a 
third  person.^  But  in  a  recent  case  in  Massachusetts  it  was  de- 
cided that  under  a  mortgage  which  provided  that  the  mortgagee 
might  purchase  at  the  sale,  and  that  the  deed  to  the  purchaser 
might  be  made  by  the  mortgagee,  either  as  the  attorney  of  the 
mortgagor  or  in  his  own  name,  a  deed  executed  in  both  forms  to 
himself  directly  was  valid.*  From  the  principles  on  which  the 
decision  is  based  it  would  seem  that  the  court  would  have  held 
that  the  mortgagee  might  have  made  the  deed  in  his  own  name 
directly  to  himself,  and  that  the  validity  of  it  did  not  depend  upon 
the  execution  of  it  to  himself  in  the  name  of  the  mortgagor. 
"  Such  a  mortgage,"  says  Gray,  Ch.  J.,  "  vests  a  seisin  and  a  con- 
ditional estate  in  the  mortgagee,  with  a  power  superadded  to 
convey  an  absolute  estate  by  a  sale  pursuant  to  the  terms  of  the 
power.  The  execution  of  the  power  does  but  change,  in  accord- 
ance with  the  terms  of  the  mortgage  deed,  the  uses  upon  which 
the  estate  is  to  be  held.  The  ])urchaser  at  the  sale  takes  not  as 
the  grantee  of  the  mortgagee,  but  as  the  person  designated  or  ap- 
pointed by  the  mortgagee  in  execution  of  the  power,  and  derives 
his  title  from  the  mortgagor,  as  if  the  designation  or  appointment 
had  been  inserted  in  the  original  deed,  and  the  seisin  or  interest 

to  serve  tlie  estate  is  raised  by  that  deed The  decision  in 

Field  v.  Goodintj^^  tliat  upon  a  sale  under  a  power  in  a  mortgage 
the  wife  of  the  mortgagor  might  be  the  purchaser,  and  have  the 

1  Cranston  r.  Crntic,  97  MasH.  459.  *   Hull  r.  Bliss,  118  Muss.  .')54.    And  src 

2  Wilkinson  v.  Alk-n,  67  Mo.  502.  Hood  v.  Adams,   124  Muss.  481. 
»  Dexter  r.   Siiepard,    117    Mn.ss.   480;         '  106  Mass.  .310. 

Jackson  v.  Golden,  4  Cow.  (N.  Y.)  260. 

VOL.  It.  44  689 


§§  1893,  1894.]     rowKR  of  sale  moimgagics  and  tkust  deeds. 

estate  convovrtl  to  her,  is  in  lunviso  inct>usistiMit  with  this  view. 
The  fact  that  the  liushaml  had  previously  soUl  tlie  equity  of  re- 
demption relieved  that  case  from  the  difliculties  which  might  have 
existed  if  he  had  owned  it  at  the  time  of  the  sale.^  The  inter- 
vention of  the  mortgagee  as  donee  of  the  power  removed  the  tech- 
nical objection  that  the  husband  could  not  convey  directly  to  his 
wife.  The  suggestions  in  Dexter  v.  Shcpard^^  and  in  Jackso7i  v. 
Colden,^  that  upon  a  sale  under  the  power  in  a  mortgage,  the  deed 
could  not  be  made  by  the  mortgagee  to  himself,  were  by  way  of 
argument  only,  and  not  of  adjudication  ;  for  in  Dexter  v.  Shepard 
the  purchase  and  conveyance  were  made  through  a  third  person  ; 
and  in  Jackson  v.  Colden  the  court  held  that  under  a  statute  con- 
taining provisions  similar  to  those  of  this  mortgage,  no  deed  was 
necessary  when  the  mortgagee  became  the  purchaser  at  the  sale ; 
and  although  the  counsel  on  both  sides,  and  the  other  judges, 
assumed  that  it  would  be  impossible  to  make  such  a  deed,  Chief 
Justice  Savage  implied  that,  if  any  deed  was  necessary,  a  deed 
from  the  mortgagee  to  himself  would  be  valid." 

1893.  In  New  York  by  statute  no  deed  is  necessary  wlien 
the  mortgagee  himself  becomes  the  purchaser,  and  it  is  said  that 
under  the  statutes  as  tliey  now  stand  no  deed  is  necessary  in  any 
case  to  perfect  the  title  in  the  purchaser.*  The  afHdavits  in  such 
case  have  the  force  and  effect  of  a  deed.^  Until  they  are  made, 
no  title  vests  in  the  purchaser.  The  mortgagee,  in  such  case,  in 
order  to  maintain  ejectment  upon  his  title,  must  show  that  all  the" 
requirements  of  the  statute  have  been  complied  with  and  the  affi- 
davits completed  before  the  commencement  of  the  action.^  Unless 
it  appears  by  the  affidavits  on  file  that  the  notice  was  served  on 
the  mortgagor,  the  sale  will  not  give  any  title  to  the  purchaser.'^ 

1894.  After  a  sale  under  a  power  the  title  as  a  general  rule 
remains  unaflfected  until  a  deed  is  executed  and  delivered  by 
the  mortgagee  to  the  purchaser.  The  auction  sale  does  not  vest 
the  title  in  the  purchaser.^  Upon  the  delivery  of  the  deed  the 
purchaser  is  entitled  to  the  possession  of  the  property,  and  he  may 

1  See  Tucker  v.  Fenno,  110  Mass.  311.      man  v.  Whiting,  20  Barb.  (N.  Y.)  559  ; 

2  117  Mass.  480.  Bryan  v.  Butt,   27    lb.   503;    Howard  v. 
8  4  Cow.  (N.  Y.)  266.  Hatch,  29  lb.  297. 

«  Thotna.s  on  Mort.  420.  '^  Dwight  v.  Phillips,  48  Barb.   (N.  Y.) 

^  See   §    1660;    Jackson   v.    Colden,   4  IIG. 

Cow.  (N.  Y.)  2G6.  »  Tripp  v.  Ide,  3  R.  I.  51.  See  §  1653, 

6  Tuthill  V.  Tracy,  81  N.  Y.  157  ;   Lay-  for  delivery  of  deed  under  judicial  sales. 
690 


THE   DEED   AND   TITLE.  [§  1895. 

maintain  a  writ  of  entry  to  recover  it.^  In  New  York,  where  no 
deed  is  necessary  to  the  passing  of  the  title,  the  foreclosure  has 
sometimes  been  said  to  be  complete,  so  far  as  to  bar  the  equity  of 
redemption,  as  soon  as  the  sale  is  made  ;  ^  though  according  to 
some  authorities  the  right  of  possession  remains  in  the  mortgagor 
till  the  affidavits  are  made  and  recorded  ;  ^  and  until  this  be  done 
there  is  no  transfer  of  title  sufficient  to  authorize  an  action  of 
ejectment  by  the  purchaser.  The  recorded  affidavits  operate  as 
a  statutory  transfer  of  title.*  In  New  York,  moreover,  the  pur- 
chaser, instead  of  being  obliged  to  resort  to  an  action  of  ejectment 
to  enforce  his  right  of  possession  of  the  mortgaged  premises,  may 
now  recover  possession  by  the  summary  process  used  in  landlord 
and  tenant  cases.^ 

1895.  The  deed  is  not  evidence  of  recitals  in  it.  A  deed 
made  in  pursuance  of  a  power  of  sale  by  the  mortgagee,  trustee, 
or  sheritf,  is  by  itself  no  evidence  of  a  regular  foreclosure  of  a 
mortgage.^  It  is  sometimes  provided  in  deeds  of  trust  that  the 
recitals  contained  in  the  trustee's  deed  of  sale  under  the  power 
shall  be  primd  facie  evidence  of  the  facts  stated  in  it.  But  in 
the  absence  of  such  a  provision  the  recitals  are  either  regarded  as 
affording  no  evidence  of  their  truth  ; '  or  as  being  at  most  primd 
facie  evidence  of  the  facts  they  recite.^ 

The  deed  made  in  pursuance  of  the  power  usually  refers  to  the 
power,  and  recites  the  substance  of  it ;  but  this  is  not  absolutely 
essential,  if  it  is  otherwise  manifest  that  the  intention  of  the  mort- 
gagee was  to  execute  the  power.  If  such  intention  is  not  mani- 
fest, a  simple  deed  by  the  mortgagee  will  be  held  to  convey  only 
his  mortgage  interest  subject  to  redemption.^  A  deed  which 
represents  the  sale  as  one  made  in  bulk  for  a  single  bid  is  not  a 
proper  one  where  the  sale  was  in  fact  in  separate  parcels  and  for 
several  bids.^'' 


1  Lydston    «;.    I'owtll,   101     Mass.    77  ;  «  Bariniin  v.  Carliartt,  10  Mich.  338. 
Crjinsion  i-.  Crane,  97  Ma-is.  4.59.  '  Vail  v.  Jacobs,  62   Mo.    130;  Noilson 

2  Tuthill  u.  Tracy,  31  N.  Y.  l.')7;  Mow-  n.  Chariton  Co.  60  Mo.  386;  Carter  v. 
ry  V.  Sanborn,  7  Hun  (N.  Y.),  380;  68  Abshire,  48  Mo.  300;  Hancock  i;.  Wby- 
N.  Y.  153.  bark,  66  Mo.  672. 

»  Amotr.  McClnre,  4  Den.  (N.  Y.)  41  ;  "  Inj,'Ie  v.  Jones,  43  Iowa,  286  ;  Bwil  v. 

Layman  v.   Whitinj,',   20   Barb.    (N.    Y.)  Blair,  33  Iowa,  318. 

559.  «  Pease  v.  Pilot  Knob  Iron  Co.  49  Mo. 

*  Mowry  v.  Sanborn,  supra.  124. 

*  Laws,  1874,  c.  208.  i''  Grover  v.  Fox  36  Mich.  461. 

691 


§§  180G,  1807.]     rowKR  ok  salk  mortgages  and  trust  deeds. 

1896.  The  deed  may  be  made  to  a  person  other  than  the 
purchaser  by  his  consent  tuul  direction.  It  is  often  the  case  that 
the  bidder  at  the  sale  transfers  his  bid  to  another  ajid  directs  the 
deed  to  be  made  to  such  person,  and  if  there  b^  no  fraud  in  the 
transaction  and  no  loss  to  the  mortgagee  thereby,  there  can  be 
no  objection  to  the  transaction.  But  even  if  objection  could  be 
urged  by  an  immediate  party  to  the  sale  it  cannot  be  set  up  in  an 
action  of  ejectment  against  remote  purchasers  without  any  notice 
of  the  irregularity  to  defeat  their  title.^  If  the  purchaser  die  be- 
fore the  conveyance  is  executed  this  does  not  avoid  the  sale,  but 
the  deed  may  be  made  to  his  executor  or  administrator  in  his  offi- 
cial capacity  upon  payment  of  the  purchase  money .^ 

1897.  The  purchaser  takes  a  title  divested  of  all  incum- 
brances made  since  the  creation  of  the  power. ^  "  It  has  been 
established  ever  since  the  time  of  Lord  Coke,  that  where  a  power 
is  executed  the  person  taking  under  it  takes  under  him  who 
created  the  power,  and  not  under  him  who  executes  it."  *  The 
purchaser  takes  all  the  mortgagor's  equity  of  redemption,  and  all 
the  mortgagee's  title  under  the  mortgage.^  But  he  does  not  take 
an  independent  title  acquired  by  the  mortgagee,  or  a  right  re- 
served to  him  as  grantor  in  the  original  deed  to  the  mortgagor,^ 
A  sale  under  a  power  is  equivalent  to  a  foreclosure  and  sale  under 
a  decree  in  equity,  and  cannot  be  defeated  to  the  prejudice  of  one 
purchasing  in  good  faith.'  The  sale  is  not  impaired  or  affected 
in  any  way  by  reason  that  any  person  interested  in  the  property 
is  at  the  time  under  a  legal  disability.^ 

The  doctrine  that  a  purchaser  from  a  trustee  with  notice  of  the 
trust  shall  be  charged  with  the  same  trust,  has  no  application  to 
sales  of  trust  estates  at  public  auction,  under  the  terms  of  the 
power  contained  in  the  trust  deed.^ 

Even  if  the  purchaser  under  the  power  omits  to  record  his  deed, 
a  subsequent  purchaser  from  the  mortgagor  has  no  right  of  re- 

1  Johnson  v.  Watson,  87  111.  535 ;  8  '^  Hall  i;.  Bliss,  118  Mass.  554;  Torrey 
Cent.  L.  J.  26.  v.  Cook,  116  Mass.  163  ;  Brown  v.  Smith, 

2  §  1652  ;  Lewis  v.  Wells,  50  Ala.  198.      116  Mass.  108. 

§  1654;  Doolittle  v.  Lewis,  7  Johns.  ^  Walsh  v.  Macomber,  119  Mass.  73. 

(N    Y.)  Ch.  45  ;  Bancroft  v.  Ashliurst,  2  "<  Jackson  v.  Henry,  10  Johns.    (N.  Y.) 

Grant  (Pa.),  513  ;  Sims  u.  Field,  G6   Mo.  185;  and  see  Deniarest  v.   Wynkoop,  3 

111.  Johns.  (N.  Y.)  Ch.  129,  147. 

Lord  Tenterden,  C.  J.,  in   Wigan  v.  ^  Demarest  v.  Wynkoop,  sujna. 

Jonea,  10  B.  &  C.  459.  »  Wood  i;.  Augustine,  61  Mo.  46. 
692 


THE   DEED    AND   TITLE.  [§  1898. 

demption.  The  record  of  the  mortgage  is  sufficient  to  put  all 
persons  upon  inquiry  whether  any  proceedings  have  been  had 
under  the  power  of  sale.^ 

1898.  Bona  fide  purchaser.  —  One  who  purchases  at  a  sale 
under  a  power  without  notice,  actual  or  constructive,  of  any  ir- 
regularity in  the  proceedings,  acquires  a  valid  title,^  although 
the  mortgagor  might  redeem  as  against  the  person  making  the 
sale,  as  where  payment  of  the  mortgage  debt  has  been  tendered 
to  the  holder  of  the  mortgage.  Where  the  power  authorizes  the 
mortgagee  to  become  a  purchaser,  and  title  is  made  to  him  accord- 
ingly, a  bond  fide  purchaser  from  him  without  notice  is  not  preju- 
diced by  such  irregularity  on  his  part  in  making  the  sale.^  To 
defeat  a  sale  under  the  power,  the  mortgagor  should  immediately 
follow  up  the  tender  by  a  suit  to  redeem  ;  otherwise  a  third  per- 
son without  notice  of  any  defect  in  the  proceedings,  or  of  any  facts 
that  should  put  him  as  a  reasonable  man  upon  inquiry,  may  gain 
a  good  title,  and  the  mortgagor  will  then  be  unable  to  redeem 
against  him,  although  he  might  against  the  purchaser  at  the  sale.* 
If  the  purchaser  be  cognizant  of  any  fraud  or  unfair  dealing  in 
the  sale,  he  acquires  no  title  by  it ;  ^  as  where  he  has  agreed  with 
the  mortgagee's  agent  to  share  the  profits  of  the  purchase,  and 
he  has  bought  the  property  at  a  grossly  inadequate  price.^ 

Although  the  mortgage  has  in  fact  been  paid,  if  not  discharged 
of  record,  a  sale  regularly  made  under  the  statute  to  a  bond  fide 
purchaser  is  held  in  New  York  to  be  equivalent  to  a  sale  under 
a  decree  in  equity,  and  is  therefore  an  entire  bar,  both  as  against 
the  mortgagor  and  all  persons  claiming  under  him."  They  can 
only  impeach  the  sale  by  showing  that  the  proceedings  were  not 
regular  and  effectual  in  form.  Fraud  on  tlie  part  of  the  mortgagee 
or  holder  of  the  mortgage  will  not  defeat  the  title  of  such  pur- 
chaser.    Usury,  or  any  other  matter  affecting  the  validity  of  the 

J  Farrar  i-.  Payne,  73  III.  82  ;  Hcaton  v.  «  Mann  v.  Best,  62  Mo.  491. 

Prathcr,  84  111.  .330.    Sec  §  657.  '  Warner  v.  Blakcinan,  30  Barb.   (N. 

2  Sternberg  v.  Dominick,  U.Johns.  (N.  Y.)  .501  ;  4  Keyes,  487. 

Y.)  435  ;  Jackson  I'.  Henry,  10  Johns.  (N.  This  case   substantially   overrules    the 

Y.)  185.  dicta  of  Mr.  Justice  Cowcn,  that  the  pur- 

'  Di^by  V.  Jones,  67  Mo.  104.  chaser  would  acquire  no  title  under  the 

«  Montaj,'ue  u.  Dawes,  12  Allen  (Mass.),  sale,  the  inortKaKC  being  void  after  pay- 

397  ;  Holt  v.  Kussell,  56  N.  H.  5.59-  mtrnt.    Cameron  v.  Irwin,  5  Hill  (N.  Y.), 

6  Jackson  v.   Crafts,  18   Johns.    (N.  Y.)  272. 
110;  and  see  Huniiltou  v.  Lubukee,  51  111. 
41S. 

G93 


§  1890.]       rOWKR    OF   SALE   MORTGAGES   AND   TRUST   DEEDS, 


niortgai^e,  will  not  aHVct  the  viiliility  of  tho  title  acquired  by  an 
innocent  purchaser.^  If  the  mortgage  be  void,  or  if  it  has  been 
paid,  a  purchaser  witli  notice  acquires  no  title  ;  but  the  mort- 
gage appearing  of  record  to  be  valid,  a  purchaser  without  notice 
does  acquire  title.- 

Although  a  part  of  the  mortgaged  premises  has  been  released 
from  the  operation  of  the  mortgage,  if  the  release  be  not  recorded, 
and  the  part  released  bo  sold  with  the  rest  to  a  bond  fide  pur- 
chaser without  notice,  he  will  hold  the  entire  property,  the  release 
having  no  effect  as  to  him.^ 

The  sale  under  a  power  is  equivalent  to  a  foreclosure  and  sale 
in  equit}^  and  a  bond  fide  purchaser  is  protected  in  the  same 
manner  and  to  the  same  extent.* 

1899.  The  title  of  one  piirchasing  in  good  faith  under  a 
po^wer  of  sale  is  unaffected  by  any  agreement  between  the 
parties  to  the  mortgage,  that  the  sale  should  be  deferred  in  con- 
sideration of  the  payment  of  the  interest  due ;  ^  or  that  no  sale 
should  be  made  without  giving  personal  notice  of  it  to  the  mort- 
gagor ;  ^  or  because  a  tender  had  been  made  to  the  mortgagee 
before  the  sale  of  the  amount  due,  which  he  had  declined.'^  Those 
who  have  bought  in  good  faith  from  the  purchaser  at  the  sale  are 
not  affected  by  any  irregularities  attending  it,  althougli  these 
were  known  to  their  vendor,  or  he  had  been  a  party  to  some 
fraud  attending  it.^ 

In  Illinois,  however,  it  has  been  held  that  after  the  payment 
of  the  mortgage  debt  the  mortgage  itself  is  extinguished,  and 
any  sale  made  under  a  power  contained  in  it  is  void  even  as 
against  a  bond  fide  purchaser.  After  such  a  sale,  the  purchaser 
being  in  possession,  a  court  of  equity  may  set  aside  the  sale,  and 
compel  a  reconveyance  of  the  legal  title,  in  order  to  remove  the 
cloud. ^ 


1  Elliott  V.  Wood,  53  Barb.  (N.  Y.)  285. 

2  Cameron  v.  Irwin,  5  Hill  (N.  Y.), 
272;  Warner  v.  Blakeman,  36  Barb.  (N. 
Y.)  .501  ;  4  Abb.  App.  Dec.  530  ;  Penny  y. 
Cook,  19  Iowa,  538  ;  Lcdyard  v.  Chapin, 
6  Ind.  320;  Wade  v.  Harper,  3  Yerg. 
(Tenn.)  383. 

3  Palmer  v.  Bates,  22  Minn.  .532. 

*  .Jackson  v.  Henry,  10  John.s.  (N.  Y.) 
185;  Slee  v.  Manhattan  Co.  1  Paige  (N. 
Y.),  48. 

694 


6  Beatie  v.  Butler,  21  Mo.  313. 

6  Randall  V.  Hazelton,  12  Allen  (Mass.), 
412. 

7  Montague w.  Dawes,  12  Allen  (Mass.), 
397. 

*  See  Hamilton  i\  Lubukee,  51  111.  415. 

9  Redmond  v.  Packenham,  66  111.  4.34. 
And  see  per  Cowen,  J.,  in  Cameron  i;.  Ir- 
win,.5  Hill  (N.  Y.),  272;  Wood  v.  Colvin, 
2  Hill  (N.  Y.),  566. 


THE   DEED   AND   TITLE,  [§§  1900-1902. 

The  fact  that  by  mistake  more  land  is  sold  by  the  mortgagee 
than  his  mortgage  covers  does  not  affect  the  validity  of  the  sale 
as  to  so  much  of  the  land  as  he  was  entitled  to.^ 

Where  a  statute  declares  a  note  tainted  by  usury  to  be  wholly 
void,  a  sale  under  a  power  in  a  mortgage  or  trust  deed  securing 
such  note  confers  no  title  when  the  mortgagee  or  beneficiary  be- 
comes the  purchaser.2  The  sale  would  be  a  conclusive  bar  only 
in  favor  of  a  hand  fide  purchaser  without  notice,  which  a  party 
to  the  usurious  contract  could  not  be. 

1900.  Under  the  English  practice  of  conveyancing  it  is  gen- 
erally provided  in  the  mortgage  deed  that  the  purchaser  shall  not 
be  bound  to  inquire  whether  any  default  has  been  made,  or 
whether  any  money  remains  due  upon  the  security,  or  otherwise 
as  to  the  propriety  or  regularity  of  the  sale  ;  and  under  such  a 
provision  the  purchaser  acquires  a  good  title  by  a  sale  made  in 
good  faith,  even  if  nothing  remains  due  upon  the  mortgage.^ 

1901.  Covenant  for  further  conveyance.  —  Sometimes  a  cov- 
enant is  inserted  in  the  mortgage  that  the  mortgagor  shall  in  case 
of  a  sale  under  the  power  make  such  further  conveyance  as  may 
be  necessary  for  better  effecting  it,  or  will  concur  or  join  in  the 
sale.  A  covenant  of  this  sort  is  for  the  benefit  of  the  mortgagee 
with  whom  it  is  made,  and  not  of  the  purchaser.*  As  a  matter  of 
practical  conveyancing,  this  is  an  important  provision,  as  it  often 
enables  the  mortgagee  to  obtain  a  release  which  will  bar  all  in- 
quiry into  irregularities  attending  the  sale. 

1902.  An  invalid  sale  operates  as  an  assignment  of  the 
naortgage.  If  the  sale  under  the  power  is  subsequently  declared 
void  for  any  irregularity,  a  purchaser  who  has  paid  the  purchase 
money  is  subrogated  to  the  rights  of  the  mortgagee  under  the 
mortgage,  wliich  is  regarded  as  assigned  to  him,  and  he  may  pro- 
ceed anew  to  foreclose.''  If  the  purchaser  has  subsequently  sold 
the  property  by  warranty  deed,  this  amounts  to  an  assignment  of 
the  mortgage  to  such  grantee,  who  of  course  has  the  same  right  to 

1  Klock  V.  Cronkhite,  1  Hill  (N.  Y.),  ''  §  1678;  Brown  v.  Smith,  IIG  Mass. 
107.  108;    Burns   v.   Thayer,    115    Mass.   89; 

2  Penny  u.  Cook,  19  Iowa,  538 ;  Jack-  Johnson  v.  Robertson,  .3.3  Md.  ir)5;  Gil- 
son  i;.  Dominick,  14  Johns.  (N.  Y.)  435  ;  bert  v.  Cooley,  Walker,  Ch.  (Mich.)  494; 
Hyland  i>.  StaflFord,  10  Barb.  (N.  Y.)  5.58.  Jones  v.  Mack,  .53   Mo.   147;   llussell    v. 

8  Dicker  v.  An^erstcin,  24  W.  R.  844.        Whitcly,  59   Mo.  196;  Stnckpolc  »).  Hob- 
«  Clay  V.  Sharjio,  18  Ves.  346 ;  Cordcr     bins,  47    Barb.  (N.  Y.)  212;  Robinson  v. 
V.  Morgan,  18  Ves.  344.  Ryan,  25  N.  Y.  320. 

095 


§  1903.]     rowr.R  of  sale  mortgagks  and  thust  nr.KDs. 

foreclose. ^  Uiulor  a  dood  of  tnust,  tlu'  i)nivliaser  is  subrogated 
to  all  (lie  rights  of  the  beneficiary.'^  When  the  sale  was  made 
without  notice,  tlie  trustee's  deed  passes  to  the  purchaser  of  the 
legal  title,  and,  until  redemption  is  had,  enables  him  to  maintain 
possession.^  And  so  if  the  sale  be  made  before  a  default  the 
trustee's  deed  confei-s  the  legal  title  in  trust  for  the  benefit  of  the 
grantor.* 

A  purchaser  at  an  irregular  foreclosure  sale  obtains  all  the 
rights  of  the  mortgagee,  although  the  sale  and  conveyance  are 
not  made  by  the  mortgagee  himself,  but  by  an  ofBcer  acting 
under  a  statute  regulating  sales  nnder  powers  in  mortgages.  The 
statute  in  such  case  becomes  a  part  of  the  mortgage,  and  a  sale 
nnvde  in  pursuance  of  it  is  an  exercise  of  the  power  conferred  by 
the  contract.'"^  "  The  officer  who  sells  merely  stands  in  the  shoes 
of  the  mortgagee  and  represents  both  parties."*^ 

A  mortgagee  who  takes  possession  of  the  mortgaged  premises 
under  a  void  sale  is  liable  for  the  rents  and  profits  received  by 
him  upon  a  subsequent  redemption  by  the  mortgagor.  But  to 
make  him  liable  he  must  have  had  actual  possession,  or  such  a 
possession  as  would  give  him  the  enjoyment  of  the  profits.'^  Such 
mortgagee  would  also  be  liable  for  waste  committed  or  suffered 
by  him  while  in  actual  possession  of  the  premises.  But  if  he  is 
not  in  possession,  and  the  injury  done  was  not  any  act  of  his, 
or  one  which  he  could  prevent,  as,  for  instance,  a  destruction  of 
buildings  by  the  Confederate  army,  he  is  not  responsible  for  it.^ 

If  the  mortgage  debt  has  been  paid  before  the  sale,  the  pur- 
chaser obtains  at  most  only  a  bare  legal  title,  which  he  will  hold 
for  the  benefit  of  the  owner  of  the  estate  ;  and  in  states  where 
payment  alone,  whenever  made,  is  sufficient  to  revest  the  title  in 
the  mortgagor,  the  sale  would  be  void.'' 

1903.  The  remedy  against  a  purchaser  who  declines  to 
complete  a  purchase  made  at  a  sale  regularly  conducted-  may  be 
either  b}'  a  bill  in  equity  for  a  specific  performance,  or  a  suit  at 
law  for  damages.^''     If  the  former  remedy  be  waived,  the  property 

1  Niles  V.  Ransford,  1  Mich.  338.  6  Hoffman  v.  Harrington,  33  Mich.  392. 

2  Inf;le  v.  Culbertson,  43  Iowa,  265.  <>  lb.  per  Mr.  Justice  Campbell. 

'  Wilson  V.  South  Park  Commissioners,         "^  Bigler  v.  Waller,  14  Wall.  297. 
70  111.  46.  8  Bi^ler  v.  Waller,  14  Wall.  297. 

*  Chicago,  Rock  Island,  &c.  R.  R.  Co.  v.         ^  Furguson  v.  Coward,  57  Tenn.  572. 
Kennedy,   70  111.  350;    Kcester  v.  Burke,        ^^  Sherwood  r.  Saxton,  63  Mo.   78,  and 

81  111.  436.  cases  cited.     See  §  1680. 

696 


THE   AFFIDAVIT.  [§  1904. 

should  be  sold  again  ;  and  if  it  brings  a  less  sum,  the  former  pur- 
chaser is  liable  at  law  for  the  difference  in  price  and  for  the  ex- 
penses attending  the  resale.^ 

It  is  a  sufhcient  excuse  for  the  purchaser's  declining  to  complete 
his  purchase,  that  the  auctioneer  offered  the  property  free  of  in- 
cumbrances, and  the  purchase  was  made  on  that  understanding,  at 
the  full  value  of  the  property,  when  in  fact  the  property  is  incum- 
bered by  prior  mortgages  which  are  not  removed  before  the  ten- 
dering of  a  deed.'-^ 

13.   The  Affidavit. 

1904.  Neglect  to  make  and  file  an  aflQdavit  of  sale  does  not 
invalidate  it.  In  Massachusetts,  where  a  statute  provides  that 
the  mortgagee,  in  case  he  sells  without  a  decree  of  court,  shall 
within  thirty  days  after  selling  the  property  in  pursuance  of  the 
power  file  a  copy  of  the  notice  and  his  affidavit,  setting  forth  his 
acts  in  the  premises  fully  and  particularly,  in  the  registry  of 
deeds,3  it  is  held  that  the  sale  is  good,  and  the  title  passes  with- 
out complying  with  this  provision,  which  is  regarded  only  as 
directory,  and  not  precluding  other  evidence  of  the  execution  of 
the  power  of  sale.^  In  a  late  case,^  Mr.  Justice  Colt  said  :  "  The 
provision  is  intended  to  secure  the  preservation  of  evidence  that 
the  conditions  of  the  power  of  sale  named  in  the  deed  have  been 
complied  with.  It  is  for  the  protection  of  those  claiming  under 
the  sale,  and  to  prevent  litigation.  The  title  passes  by  the  sale 
and  deed,  and  immediately  vests  in  the  purchaser.  It  was  not 
the  intention  to  make  it  sul)ject  to  a  condition  subsequent,  and 
liable  to  be  defeated  by  a  failure  of  the  mortgagee  to  perform  an 
act  which  must  follow  the  conveyance  in  point  of  time ;  and  thus 
add  to  the  conditions  prescribed  by  the  mortgagor  in  the  deed." 

Under  a  statute  requiring  an  affidavit  of  the  publication  of  the 
notice  of  sale  to  be  made  by  the  printer  of  the  newspaper,  an  affi- 
davit by  one  who  states  that  he  is  the  publisher  of  the  paper  is 
sufficient,  as  the  publisher  and  printer  are  presumably  the  same.^ 
Neither  the  aflidavit  nor  its  record  are  necessary  to  the  validity 

1  Dover  u.  Kennerly,  38  Mo.  409  ;  Gard-     Learned  v.  Foster,  117  Mass.  365  ;   Burns 
ner  v.  ArmstronR,  31  Mo.  535.  v.  Thayer,  115  Ma.s.s.  89. 

2  Mayer  v.  Adrian,  77  N.  C.  83.  <*  Burns  v.  Thayer,  115  Mass.  89. 

«  G.  S.  c.  140.  §  42.  »  Menard     i'.   Crowe,   20    Minn.    448; 

*  Field    V.   Goading,    106    Mass.    310;     Bunce  v.   Heed,   16  Barb.  347;  Sharp  v. 

Daugncy,  33  Cal.  513. 
697 


§  lOOo.]       IHUVKR    OF    SALE    MORTGAGKS    AND    TRUST    DF.KDS. 


of  tlio  pmvluisor's  titlo.  If  tlu'  allklavit  omits  to  state  that  the 
notice  wjis  published  once  in  each  week,  and  the  paper  in  which 
it  was  published  is  erroneously  stated,  the  fact  that  the  notice 
was  projunly  })ublished  may  be  otherwise  proved.^  And  if  there 
be  no  alhdavit  at  all,  the  publication  of  the  notices  and  the  cir- 
cumstances of  the  sale  may  be  proved  by  common  law  evidence.^ 

In  New  York  it  is  also  held  that  the  affidavits  of  publication 
and  affixing  notice  of  sale  are  sufficient  to  pass  the  title  without 
being  recorded.^ 

If  the  provisions  of  a  power  of  sale  be  not  strictly  complied 
■with  no  title  passes  ;  and  therefore  if  it  provide  that  an  affidavit 
of  the  proceedings  under  the  power  should  be  recorded  in  a  cer- 
tain county  within  one  year,  and  the  affidavit  be  not  made  and 
filed  within  such  time,  the  sale  will  be  treated  as  a  nullity.'* 

1905.  In  order  that  the  aflSdavit  may  have  the  force  of 
presumptive  evidence  of  the  facts  therein  stated,  it  should  be 
made  within  a  reasonable  time  after  the  sale.  If  made  seven  or 
eight  years  after  the  sale,  it  is  not  such  evidence.^  To  have  the 
effect  of  presumptive  evidence,  moreover,  the  affidavit  must  show 
that  the  requirements  of  law  in  regard  to  the  sale  have  been 
complied  with ;  as,  for  instance,  that  service  of  notice  has  been 
made  in  the  manner  prescribed.^  Even  when  the  affidavits  are 
presumptive  evidence  of  the  facts  required  to  be  stated  in  them, 
they  maj'  be  controverted  by  the  mortgagor,  or  those  claiming 
under  him."  Where  the  affidavits  may  be  filed  at  any  time,  it 
would  seem  that  defects  in  the  original  affidavits  may  be  corrected 
by  new  affidavits.^  But  defects  in  the  affidavits  cannot  be  sup- 
plied after  the  commencement  of  an  action  in  which  they  are  ma- 
terial for  the  support  of  the  title.  The  parties  must  stand  on  the 
affidavits  as  they  were  at  the  time  of  bringing  the  suit.^ 


1  Golcher  v.  Brishin,  20  Minn.  453. 

2  Arnot  V.  McClure,  4  Den.  (N.  Y.)  41. 

«  Tiuhill  V.  Tracy,  31  N.  Y.  157  ;  How- 
ard V.  Hatch,  29  Barb.  (N.  Y.)  297  ;  Frink 
V.  Thompson,  4  Lans.  (N.  Y.)  489.  See 
Mowry  v.  Sanborn,  68  N.  Y.  153,  where 
the  history  of  the  legislation  on  this  sub- 
ject is  given. 

*  Smith  V.  Provin,  4  Allen  (Mass.), 
516. 

^  Mundy  v.  Monroe,  1  Mich.  68. 

»  Mowry  v.  Sanborn,  65  N.  Y.  581.    An 

698 


affidavit  on  information  and  belief  is  in- 
sufficient.    But  see  S.  C.  11  Hun,  545. 

7  Arnot  V.  McClure,  4  Den.  (N.  Y.)  41  ; 
Sherman  v.  Willett,42  N.  Y.  14«;  Mowry 
V.  Sanborn,  62  Barb.  (N.  Y.)  223  ;  7  Hun, 
380;  68  N.  Y.  153. 

8  Bunce  v.  Reed,  16  Barb.  (N.  Y.)  .347. 

9  Dwight  V.  Phillips,  48  Barb.  (N.  Y.) 
116;  Mowry  v.  Sanborn,  7  Hun  (N.  Y.), 
380 ;  but  see  S.  C.  62  Barb.  223  ;  65  N. 
Y.  581  ;  11  Hun,  545  ;  68  N.  Y.  153. 

la  the  last  report  it  was  declared  that 


SETTING   ASIDE   AND   WAIVING  SALE.  [§  1906. 

The  mortcracee  is  accountable  for  the  full  amount  bid  at  the 
sale  if  he  completes  it  by  a  conveyance,  whether  he  actually  re- 
ceives the  purchase  money  or  not.  His  affidavit  need  not  state 
the  rendering  of  an  account  or  the  disposition  that  has  been  made 
of  the  purchase  money.^  Where  the  whole  estate  is  sold,  the 
purchase  money  is  properly  applicable  to  the  payment  of  any 
prior  incumbrances  upon  the  property  as  well  as  the  mortgage 
under  which  the  sale  is  made,  so  far  as  it  will  go  ;  and  it  is  only 
in  case  the  consideration  of  the  sale  exceeds  the  amount  of  such 
incumbrances  that  he  is  accountable  for  a  surplus.  A  second  or 
subsequent  mortgagee  is  not  estopped  by  the  recital  in  his  affi- 
davit of  sale  of  the  amount  for  which  the  sale  was  made,  to  show 
that  the  sale  was  in  fact  of  the  whole  estate,  and  that  less  than 
the  whole  amount  of  the  incumbrances  was  received.^ 

14.  Setting  aside  and  waiving  Sale. 

1906.  A  mortgagee  or  trustee  in  the  exercise  of  a  power 
of  sale  must  act  fairly,  and  is  under  very  much  the  same  obli- 
gation to  other  parties  in  interest  as  trustee,  in  other  cases.  "  I 
apprehend,"  says  Vice-Chancellor  Bruce,^  "  that  a  mortgagee 
having  a  power  of  sale  cannot,  as  between  him  and  the  mortgagor, 
exercise  it  in  a  manner  merely  arbitrary,  but  is,  as  between  them, 
bound  to  exercise  some  discretion  ;  not  to  throw  away  the  prop- 
erty, but  to  act  in  a  prudent  and  business  like  manner,  with  a 
view  to  obtain  as  large  a  price  as  may  fairly  and  reasonably,  with 
due  diligence  and  attention,  be  under  the  circumstances  obtain- 
able." So  far  as  otlier  persons  are  interested  in  the  property  the 
power  is  regarded  as  a,  trust,  and  the  mortgagee  is  treated  as  a 
trustee  in  the  exercise  of  it.  Fairness  and  good  faith  are  de- 
manded of  him.*  The  grounds  for  setting  aside  a  sah^  under  a 
power  are  not  merely  those  which  are  recognized  as  sufficient  for 

defect*  in  an  nffidavit  of  service  of  notice  v.  Wright,  3  Jur.  19,  Lord  Lnngdnlc  said  : 

upon  the  mort(jagor  might  be  supplied  by  "  A  trustee  should  use  nil  the  uicnns    in 

parol  evidence.  his  power  to  get  the  fairest  and  best  price 

1  Childs  V.  Dolan,  5  Allen  (MnHS.),  310.  for  the  property." 

2  Aldcni;.  Wilkins,  117  Mass.  215.  ••  Ellsworth  v.  Lockwood,  42  N.  Y.  89  ; 
»  Matthic  u.  Edwnrd.s,  2  Coll.  40.5,  480.  Jencks  v.  Alexander,  11    Paige   (N.  Y.), 

This  statement  of  a  general  principle  is  624.  See  Soulc  v.  Ludlow,  3  Hun  (N. 
undoubte<lly  correct,  though  in  the  u|.i.li-  Y.),  503  ;  6  T.  &  C.  24  ;  Longwith  i'.  But- 
cation  of  it  to  the  case  in  hand  the  Vice-  ler,  8  III.  32;  Weld  v.  llees,  48  111.  428, 
Chancellor  was  subsequently  overruled  in  437;  Waller  r.  Arnold,  71  111.350;  Gro- 
Jones  V.  Matthie,  11  Jur.  504.     In  Orme     ver  v.  Fox,  36  Mich.  461. 

099 


§§  1907,  1008.]     rowKR  of  sai.k  mortgages  and  trust  deeds. 

settiiiLjf  asulo  ii  forei'ldsurt'  sale  niado  undor  proceedings  in  equity  ;  ^ 
but  tliei-e  lire  also  otlieis  wliich  arose  from  the  trust  relation,  in 
which  the  niortpigee  acts  in  conchictini^  the  proceedin<T3. 

The  obligations  of  a  mortgagee  in  tlie  exercise  of  the  power 
are  forcibly  declared  by  Mr.  Justice  Wells,  of  Massachusetts: 
"  One  who  undertakes  to  ex(>cute  a  power  of  sale  is  bound  to  the 
observance  of  good  faith  and  a  suitable  regard  for  the  interests  of 
his  principal.  He  cannot  shelter  himself  under  a  bare  literal 
compliance  with  the  conditions  imposed  by  the  tcn-ms  of  the  power. 
He  must  use  a  I'easonable  degree  of  effort  and  diligence  to  secure 
and  protect  the  interests  of  the  party  who  intrusts  him  with  the 
power.  A  stranger  to  his  proceedings,  finding  them  all  correct 
in  form,  and  purchasing  in  good  faith,  may  not  be  affected  by  his 
unfaithfulness.  But  whenever  his  proceedings  can  be  set  aside 
without  injustice  to  innocent  third  parties,  it  will  be  done  upon 
proof  that  they  have  been  conducted  in  disregard  of  the  rights  of 
the  donor  of  the  power.  When  a  party  who  is  intrusted  with  a 
power  to  sell  attempts,  also,  to  become  the  purchaser,  he  will  be 
held  to  the  strictest  good  faith  and  the  utmost  diligence  for  the 
protection  of  the  rights  of  his  principal."  ^ 

1907.  Whether  a  sale  is  void  or  voidable  only  by  reason  of 
any  irregularity  depends  upon  the  nature  of  the  irregularity.  The 
distinction  is  taken  that  when  a  power  directs  the  doing  of  a  spec- 
ified thing  in  a  particular  manner,  and  there  has  been  a  total 
failure  to  comply  with  the  direction,  the  execution  of  the  power 
is  void.  Thus  a  sale  without  publication  of  notice  in  certain 
newspapers  specified  in  the  power  was  held  void.^  But  when 
the  mode  and  manner  of  the  notice  of  sale,  or  of  the  place  of  it, 
is  left  to  the  discretion  of  the  trustee,  and  it  appears  that  there 
has  been  an  honest  though  mistaken  exercise  of  his  judgment  in 
respect  to  these  matters,  the  sale  is  not  regarded  as  absolutely 
void,  but  is  voidable  only  at  the  election  of  the  parties  intei'ested.'* 

1908.  When  the  owner  of  the  equity  of  redemption  be- 
comes bankrupt,  and  foreclosure  proceedings  are  subsequently 
instituted  in  a  state  court  against  the  objection  of  the  assignee, 

1  See  Leet  v.  McMaster,  51  Barb.  (N.  369.     And  see  Hood  v.  Adams,  124  Mass. 

y.)  236;  Hubbell  v.  Sibley,  5  Lans.  (N.  481. 

Y.)  .-ii.  3  Bii?lcr  V.  Waller,  14  Wall.  297. 

*  Montague  r. Dawes,  14  Allen  (Mass.),  *  Ingle  v.   Culbertson,  43   Iowa,    265, 


273. 


700 


SETTING   ASIDE   AND   WAIVING   SALE.       [§§  1909,  1910. 

or  an  attempt  is  made  to  foreclose  by  a  sale  under  a  power,  the 
proceedings  are  void  unless  made  with  leave  of  the  bankrupt 
court.i  But  the  fact  that  a  subsequent  mortgagee  is  a  bankrupt 
is  no  objection  to  the  execution  of  a  power  of  sale  in  a  prior 
mortgage.^ 

1909.  Allowing  property  to  be  sacrificed.  —  A  mortgagee 
with  power  to  sell,  or  holding  under  an  absolute  conveyance,  must 
sell  fairly  and  for  the  best  price  he  can  obtain.  He  has  no  right 
to  sell  for  a  price  sufficient  to  pay  his  claim  without  reference  to 
the  value  of  the  property.  A  purchaser  who  knows  that  the 
mortgagee  is  sacrificing  the  property  for  a  small  fraction  of  its 
value  is  not  an  innocent  purchaser,  and  will  only  occupy  the  posi- 
tion of  an  assignee  of  the  mortgage  debt.^  If  a  trustee  permits 
property  to  be  sacrificed  by  a  sale  for  a  small  fraction  of  its  value, 
as  where  property  worth  from  #5,000  to  $8,000  is  sold  for  $1,000, 
the  sale  will  be  set  aside  on  timely  application.'* 

But  where  property  sells  for  two  thirds  of  its  value,  and  the 
sale  is  unattended  by  fraud,  the  inadequacy  of  price  does  not  au- 
thorize the  setting  aside  of  the  sale.^ 

When  the  notices  provided  for  by  the  power  have  been  prop- 
erly given,  and  there  is  no  fact  underlying  the  formal  proceedings 
showing  bad  faith  on  the  part  of  the  mortgagee,  the  mortgagor 
cannot  have  relief  from  the  sale,  although  through  his  own  mis- 
take or  negligence  he  failed  to  attend  the  sale  or  to  protect  his 
interest.  A  court  of  equity  will  not  open  a  sale  for  any  such 
reason.^ 

1910.  The  sale  is  avoided  by  a  secret  arrangement  to  pre- 
vent competition.  Every  person  interested  in  the  equity  of  re- 
demption has  a  right  to  claim  that  the  sale  shall  be  made  fairly 
and  with  the  advantage  of  such  competition  as  the  sale  would 
ordinarily  command.  A  secret  arrangement  between  the  mort- 
gagee and  a  person  interested  in  buying  the   property,  whereby 

1  Hutchin(,'8  v.  Muzzy  Iron  Works,  G  wood,  J.  "Neither  the  In w  nor  the  par- 
Chicn^o  Leg.  News,  27  ;  In  rn  Brinkinan,  tics  intend  that  the  trustee  shall  be  a 
7  Bank.  Reg.  421.    §§  1231-1236.  nose  of  wax,  a  mere  figure-hond,  in  the 

2  Long  V.  Rogers,  f)  Hiw.  410.  hands  of    the  creditor  and    of    the   auc- 
8  Ruiiklc  V.  Gaylord,    1    Nev.  12.3.    In     tioncer."     And   see  Meath  v.   Porter,   9 

this  case  the  jirice  obtained  wbh  about  a  Ileisk.  (Tenn.)  224. 

third  of  the   value  of  the  estate,  and  live  ">  Weld  v.  Rees,  48  111.  428. 

months'  rent  of    it   was  sufticicnt  to   pay  »  King    v.    Bronson,    122    Mas.s.    122; 

the  debt.  Weld  i-.  Rees,  48  111.  428. 
*  Vail  V.  Jacobs,  62  Mo.  130,  per  Sher- 

701 


§  I'JIL]       roWF.R   OF   SALE    MORTGAGKS   AND   TRUST   DEEDS. 

oompi'tilion  is  pri'vonttMl,  avDuls  tlio  salt\  On  tliis  ground  a  per- 
son claiming  under  tlie  mortgagor  was  allowed  to  redeem  after  a 
sale  made  while  an  injunction  against  it  was  in  force,  under  an 
arrangement  between  the  mortgagor  and  the  person  who  procured 
the  injunction  that  the  sale  should  be  made,  and  that  he  should 
bid  o\\  the  property  at  a  certain  price,  and  the  injunction  suit 
should  be  dismissed.^  A  sale  was  held  fraudulent  and  void  where 
the  assignee  of  the  mortgage  acting  as  auctioneer,  seeing  the 
owner  of  the  equity  approaching,  immediately  knocked  down  the 
property  to  his  own  brother  in  order  to  prevent  competition. ^ 

If  an  agent  of  the  mortgagee  acting  under  the  power  in  mak- 
ing the  sale  has  previously  agreed  with  the  purchaser  to  furnish 
half  of  the  purchase  money  and  divide  the  profits,  the  sale  is  a 
fraud  upon  both  the  mortgagor  and  mortgagee.^ 

The  burden  of  proof  is  upon  the  party  charging  fraud  and  col- 
lusion between  the  buyer  and  the  seller  under  a  power.* 

1911.  Any  fraud  or  deception  practised  upon  the  cwner  of 
the  mortgaged  premises,  in  consequence  of  which  he  has  lost  his 
rights,  is  sufficient  ground  for  setting  aside  the  sale.°  The  power 
of  sale  in  a  mortgage  is  a  trust  power,  so  far  as  it  relates  to  the 
interest  in  the  property,  or  in  the  proceeds  of  it  above  the  amount 
due  the  mortgagee  ;  and  any  collusive  arrangement  between  the 
mortgagee  and  a  third  person,  so  to  execute  the  power  as  to  de- 
prive the  owner  of  the  equity  of  redemption  of  his  rights  by  keep- 
ing the  knowledge  of  the  sale  from  him,  or  by  preventing  a  fair 
competition  at  the  sale  and  enabling  a  jDurchaser  to  obtain  the 
premises  at  a  price  below  their  value,  will  avoid  the  sale.^ 

If  the  owner  of  the  land  be  insane,  and  the  mortgagee  know- 
ing the  fact  buys  the  property  for  less  than  half  its  value,  the  sale 
should  be  set  aside  as  fraudulent  and  void  ;  and  a  purchaser  from 
the  mortgagee  having  the  same  knowledge  has  no  better  right  to 
hold  the  property  than  the  mortgagee  himself.'^ 

1  See  Mapps  V.  Sharpe,  32  111.  13.  24;  3    Hun,  503;   Lee   v.    McMaster,   51 

2  Jackson  v.  Crafi.s,  18  Johns.  (N.  Y.)     Barb.  (N.  Y.)  236. 

110.  ^  Jcncks  y.  Alexander,  11  Paige  (N.  Y.), 

8  Mann  i;.  Best,  62  Mo.  491.  619.     In  this  case,  Walworth,  Chancellor, 

*  Bush  V.  Sherman,  80  111.  160  ;  Munn  said  :  "  It  is  impossible  to  wink  so  hard  as 

V.  Burges,  70  111.  604.  not  to  see  that  the  power  of  sale  was  ex- 

6  Banta  v.  Maxwell,  12  How.  (N.  Y.)  ecuted  in  bad  faith."     Howard  v.  Ames, 

Pr.  479;   Murdock  v.  Empie,   19  lb.   79.  3  Met.  (Mass.)  308. 

See,   also,   Ferrand  v.  Clay,  1  Jur.  165;  ''  Enckiug  w.  Simmons,  28  Wis.  272. 

Soule  V.  Ludlow,  6  Thomp.  &  C.  (N.  Y.) 

702 


SETTING   ASIDE   AND    WAIVING   SALE.       [§§  1912-1914. 

A  sale  under  a  power  was  set  aside  where  the  mortgagee  filed 
a  bill  in  equity  to  foreclose  making  a  junior  mortgagee  a  party- 
defendant,  and  pending  this  suit,  to  which  the  junior  mortgagee 
answered,  the  first  mortgagee  sold  under  the  power  of  sale.  The 
resort  to  equity  to  foreclose  the  mortgage  had  a  tendency  to  lull 
the  junior  mortgagee  into  a  false  security  in  regard  to  any  sale 
under  the  power.^ 

The  fact  that  one  of  two  joint  mortgagors,  upon  the  refusal  of 
the  other  to  pay  part  of  an  instalment  due,  refuses  to  pay  his  part, 
and  suggests  a  sale  under  the  power,  is  no  evidence  of  his  fraudu- 
lently procuring  a  foreclosure  of  the  mortgage.^ 

1912.  The  conduct  of  the  purchaser  at  the  sale  may  avoid 
it;  3  as  where  he  expostulates  with  a  rival  bidder,  informing  him 
of  his  losses,  and  telling  him  that  on  account  of  them  he  ought 
not  to  bid  against  him,  and  thereby  causes  the  bidder  to  withdraw, 
and  obtains  the  land  at  a  price  much  less  than  its  value,  the  sale 
will  be  invalid  as  against  a  subsequent  mortgagee  who  seeks  to 
redeem.'^  A  combination  by  the  purchaser  witli  other  bidders  at 
the  sale,  for  the  purpose  of  obtaining  the  property  at  a  price  be- 
low its  value,  will  also  invalidate  the  sale.° 

1913.  If  a  purchaser  buys  at  a  sale  under  a  power  with 
knowledge  of  circumstances  sufficient  to  invalidate  the  sale, 
as  that  a  valid  tender  has  been  made  of  the  whole  amount  due 
under  the  mortgage,  he  thereby  becomes  a  party  to  the  transac- 
tion, and  is  not  protected  by  a  proviso  that  the  purchaser  need 
make  no  inquiries.  Such  knowledge  puts  him  in  the  same  situa- 
tion as  the  mortgagee  as  to  the  validity  of  the  sale.°  He  is  charge- 
able with  notice  of  defects  and  irregularities  attending  the  sale. 
He  is  chargeable  too  with  knowledge  whether  proper  notice  of  the 
sale  was  given,  and  whether  the  sale  was  made  at  the  time  and  in 
the  manner  reijuired  by  the  power.'  But  the  rule  is  dilVerent  as 
regards  remote  purchasers,  who,  having  no  notice  in  fact  of  any 
irregularitit-H,  will  be  protected  as  innocent  purchasers.** 

1914.  Purchase  by  agent  without  authority.  —  A  trustee,  in 
whose  nanui  a  mortgage  was  taken  to  secure  the  {)ayment  of  the 

1  Hurd  V.  Case,  32  111.  45.  «  Jenkins  v.  Jones,  2  (ill.  9'J.  Sec  Crnn- 

2  St.  Josepli  Manufacturing  Co.  v.  Dug-  ston  v.  Crane.  97  Ma.ss.  4.'j'.t ;  Chicago, 
gett,  84  111.  .156.  Uock  Island,  &c.  U.  H.  Co.  v.  Kennedy,  70 

•  Sugden  on  Vendors,  .30.  111.  3.50. 

«  Fenner  i-.  Tucker,  6  K.  I.  551.  "  Gunncll  v.  Corkcrill,  79  111.  79. 

»  Dover  i;.  Kcnncrlv,  44  Mo.  145,  148.  *  Gunnell  v.  Cuckcrill,  supra. 

703 


§  191;").]     rowER  of  salk  mortgages  and  trust  deeds. 

sopurato  claims  of  sevi'ral  creditors  of  tlu'  morljjjagor,  lias  no  au- 
thority to  biiul  thoin  by  a  purchase  of  the  property  at  the  fore- 
closure sale,  made  in  good  faith  and  for  the  protection  and  joint 
benefit  of  all  of  (hem  ;  neither  can  a  majority  of  such  creditors 
force  the  others,  who  object  to  the  purchase,  to  enter  into  any 
arrangement  for  buying  the  lands  at  such  sale.  A  resale  of  the 
property  will  be  ordered  at  the  option  of  the  objecting  creditors.^ 

1915.  Mere  inadequacy  of  price  is  no  ground  for  vacating  a 
sale  if  it  was  fairly  conducted  in  every  respect.^  And  even  in  a 
state  where  the  sale  must  be  reported  to  the  court  and  confirmed, 
as  in  case  of  a  foreclosure  sale  in  equity,  the  inadequacy  of  price 
must  be  very  material  to  prevent  a  confirmation  of  it ;  and  such 
in  fact  as  to  furnish  evidence  of  fraud  on  the  part  of  the  trustee. 
This  circumstance,  however,  when  taken  in  connection  with  others 
attending  the  sale,  may  be  considered  sufficient  in  the  sound  dis- 
cretion of  the  court  to  call  for  its  equitable  interposition  and  the 
setting  aside  of  the  sale.^  A  sale  of  propert}'^,  worth  at  least 
$8,500  for  85,000,  was  not  regarded  such  a  gross  inadequacy  of 
price  as  to  authorize  equitable  interference  ;  but  when  it  appeared 
further  that  the  sale  was  made  at  an  unusual  hour,  and  that  only 
two  bidders  were  present,  the  sale  was  set  aside,  although  it  was 
not  shown  that  the  property  would  have  brought  any  greater  sum 
had  it  been  sold  at  the  usual  hour  of  sale.* 

The  owner  of  land  sold  under  a  power  of  sale,  who  attends  the 
sale  and  bids  upon  the  property,  and  allows  it  to  be  sold  to  an- 
other, will  not  be  permitted  years  afterwards,  when  improvements 
have  been  made  upon  it,  to  impeach  the  sale  on  account  of  in- 
adequacy of  price. ^ 

A  sale  by  a  trustee  under  a  trust  deed  will  not  be  set  aside 
because  the  premises  were  sold  for  only  one  third  their  value,  the 
purchaser  being  a  stranger  to  the  transaction,  and  having  in  good 
faith  sold  the  premises  to  another ;  nor  because  the  property  was 
sold  in  parcels  and  not  together;  nor  because  the  trustee  should 
have  adjourned  the  sale  in  view  of  the  small  attendance  and  in- 
adequate price  bid.^     Objection  to  the  validity  of  the  sale  comes 

1  Bradley  v.  Tyson,  33  Mich.  337.  »  Hubbard  i-.  Jarrell,  23  Md.  66. 

2  King   V.   Bronson,     122    Mass.    122  ;  *  Stoffel  v.  Schrocder,  62  Mo.  147. 
Wing  V.  Hayford,   124  Mass.  249;  Lan-  ^  Watson  v.  Sherman,  84  111.  263. 
drunn  v.  Union  Bank  of  Mo.  63  Mo.  48  ;  «  Shine  v.  Hill,  23  Iowa,  264. 
Harnickell  v.  Orndorff,  35  Md.  341  ;  Hor- 
sey V.  Hough,  38  Md.  130.     See  §  1670. 

70-i 


SETTING   ASIDE  AND   WAIVING   SALE.       [§§  1916,  1917. 

too  late  when  third  persons,  acting  in   good  faith,  have  acquired 
rights.^ 

Where  by  statute  a  time  is  allowed  for  redemption  under  a  sale, 
mere  inadequacy  of  price  does  not  vitiate  the  sale,  because  the 
owner  of  the  equity  of  redemption  cannot  be  prejudiced,  inas- 
much as  he  may  always  redeem  within  such  time  by  refunding 
the  amount  paid  with  interest  according  to  the  statute.  It  is 
only  liis  failure  to  do  this  that  can  occasion  him  any  loss.- 

1916.  Sale  waived  by  extending  time  of  redenaption.  —  If  a 
mortgagee  who  has  purchased  the  premises  at  a  foreclosure  sale 
during  the  year  allowed  for  redemption  agrees  with  the  mortgagor 
to  extend  the  time  of  payment  beyond  the  year,  and  in  accordance 
with  the  agreement  accepts  money  from  the  mortgagor,  the  sale 
is  thereby  rendered  ineffectual ;  and  the  mortgagee  cannot  after- 
wards rel}^  upon  the  sale  and  record  the  sheriff's  deed  as  being  of 
any  force.^  But  if  part  payments  are  made  and  received  after 
the  sale,  with  the  understanding  that  the  whole  sum  necessary 
for  that  purpose  is  to  be  paid  within  the  year  allowed  by  statute, 
they  do  not  avoid  the  sale  but  are  in  affirmance  of  it.* 

A  foreclosure  may  be  opened  when  the  purchaser  has  agreed 
with  the  mortgagor  to  allow  him  to  redeem  the  estate  after  a  sale 
under  the  power;  or  a  specific  performance  of  the  agreement  may 
be  decreed.^ 

1917.  A  promise  to  allow  the  mortgagee  to  repurchase  does 
not  waive  the  sale.  A  casual  remark  by  a  purchaser  under  a 
deed  of  trust,  who  was  also  the  beneficiary  under  it,  and  connected 
with  the  family  of  the  maker  of  it,  that  he  only  wished  by  the 
purchase  to  secure  his  debt,  and  wlien  that  was  paid  he  intended 
to  reconvey  the  property,  does  not  open  the  sale  or  make  the  pur- 
chaser a  trustee  of  the  property.*^  Nor  would  the  promise  of  a 
mortgagee,  made  at  the  time  of  his  purchase  at  his  own  sale  under 
the  power,  that  he  would  allow  the  mortgagor  to  repurchase,  with- 
out other  evidence  of  such  intention,  remit  them  to  their  former 
relation,  so  that  the  mortgagor  could  redeem  after  waiting  sev- 
eral years  ;  but  the  mortgagee's  refusal  to  allow  such  redemption 
within  a  reasonable  time  might  be  evidence  of   sucii  fraud  in  the 

1  Shine  v.  Ilill,  2:)  Iowa,  204.  »  Ormc  v.  Wright,  3  Jiir.  19  ;  Lockwood 

2  Cameron  v.  Adams,  31  Mich.  426.  v.  Mitchell,  7  Ohio  St.  387. 

»  I)od>,'e  V.  Brewer,  31  Mich.  227.  «  Miinsur  v.  Wiliurd,  57  Mo.  347. 

*  Cameron  v.  Adams,  31  Micb.  526. 
TOL.  II.  45  705 


§§  1918-1020.]     rowKR  of  salk  mortgages  and  trust  deeds. 

purcluxso  by  the  mortgagee  as  to  admit  the  mortgagor  to  his  right 
of  redemption.^ 

1918.  A  suit  for  a  second  instalment  does  not  open  fore- 
closure. Wiien  a  mortgage  is  foreelosed  for  an  instahnent  due, 
and  a  subsequent  suit  is  brought  to  recover  a  second  instahnent, 
such  suit  does  not  open  the  foreclosure.  In  this  case  the  foreclos- 
ure was  made  by  taking  possession  of  the  premises  instead  of  sell- 
ing them  ;  and  the  mortgagor  is  entitled  to  a  credit  on  the  debt 
of  the  value  of  the  mortgaged  property.^ 

1919.  Not  waived  by  subsequent  entry  to  foreclose.  —  A 
foreclosure  sale  under  a  power,  voidable  by  reason  of  the  mort- 
gagee's becoming  the  purchaser,  is  not  waived  or  opened  by  the 
mortgagee's  subsequently  entering  in  the  presence  of  two  wit- 
nesses, in  accordance  with  the  statute,  for  the  purpose  of  foreclos- 
ure, provided  there  be  no  evidence  showing  an  intention  to  waive 
or  abandon  the  rights  acquired  by  the  sale.^ 

1920.  Waiver  by  agreement.  —  After  an  ineffectual  attempt 
to  foreclose  under  a  power  of  sale,  if  tlie  purchaser  waives  his 
rights  the  mortgagee  may  also  waive  the  sale,  and  proceed  anew 
to  foreclose  under  the  power  or  by  suit  in  equity.*  But  if  the 
sale  be  regular  and  complete  in  all  respects,  it  would  seem  that  the 
mortgagor  might  insist  upon  its  standing.  At  any  rate  when  the 
sale  is  for  a  sum  sufficient  to  pay  the  mortgage  debt  and  expenses, 
although  the  mortgagee  be  himself  the  purchaser  at  the  sale,  he 
cannot,  by  refusing  to  execute  the  deed,  rescind  the  sale,  and  main- 
tain an  action  upon  the  mortgage  note.^  He  is  bound  as  a  trus- 
tee to  execute  the  trust  with  a  due  regard  to  the  interests  of  the 
mortgagor,  or  others  having  any  interest  in  the  property,  or  hable 
for  the  mortgage  debt.  Having  himself  become  the  purchaser,  he 
is  bound  to  carry  out  and  complete  his  purchase  to  the  same  ex- 
tent as  any  other  purchaser.  The  proper  performance  of  his  duty 
as  purchaser  is  as  imperative  upon  him  as  the  proper  performance 
of  his  duty  as  seller.  The  fact  that  he  unites  the  two  characters 
in  his  own  person  cannot  give  him  any  additional  rights ;  on  the 
contrary,  he  is  held  to  a  stricter  accountability  when  he  under- 
takes to  buy.^ 

1  Medsker  v.  Swaney,  45  Mo.  273.  *  Hood  v.  Adams,  124  Mass.  481. 

2  Wilson  V.  Wilson,  4  Iowa,  .309.  »  Per  Endicott,  J.,  in  Hood  v.  Adams, 
'  Learned  v.  Foster,  117  Ma.ss.  .36.5.            supra. 

*  See  §  1265  ;  Atwater  v.  Kinman,  Hnr. 
Ch.  (Mich.)  24.3. 

TOG 


SETTING   ASIDE  ANB   WAIVING  SALE.      [§§  1921,  1922. 

1921.  Relief  by  setting  aside  the  sale  must  be  sought  in  equity. 
The  purchaser  at  the  sale  and  all  persons  claiming  under  him  are 
necessary  parties.  ^  If  the  sale  has  not  been  completed  by  the 
payment  of  the  purchase  money  the  mortgagee  should  be  made  a 
party.  After  the  completion  of  the  sale  by  a  conveyance  from 
the  mortgagee  to  the  purchaser,  the  latter  will  as  assignee  hold 
the  rights  of  the  mortgagee  even  if  the  sale  be  set  aside.^  The 
setting  aside  of  the  sale  does  not  affect  or  impair  the  original 
mortgage  lien.^  If  one  who  has  received  any  part  of  the  surplus 
money  brings  an  action  to  set  aside  the  sale,  he  will  be  required 
to  refund  the  money  he  has  received  before  the  sale  will  be  dis- 
turbed.^ 

The  remedy  of  one  who,  having  an  interest  in  the  equity  of  re- 
demption, wishes  to  test  the  validity  of  a  sale  under  a  power,  is 
by  a  bill  to  redeem,  and  not  by  a  bill  to  set  aside  the  sale  and 
have  the  property  resold  ;  and  this  is  the  remedy,  although  it  be 
shown  that  the  mortgagee  has  used  his  power  of  sale  inequitably, 
and  has  unfairly  bought  in  the  property  himself.^  If  the  fore- 
closure sale  be  void  for  any  irregularity,  the  right  of  redemption 
remains  unchanged  in  the  mortgagor.^ 

1922.  Delay.  —  Where  no  steps  had  been  taken  to  redeem  a 
mortgage  for  nearly  forty  years  after  its  maturity,  and  more  than 
thirty  years  after  an  open  attempt  to  foreclose  it,  it  was  said  that 
it  would  require  a  very  strong  showing  to  authorize  a  redemp- 
tion." So  a  deia}"^  of  four  years  precludes  a  mortgagor's  redeem- 
ing as  against  subsequent  purchasers.^  Acquiescence  for  anj^ 
considerable  time  in  a  sale  which  is  voidable  only,  unless  ex- 
plained, is  deemed  a  waiver  of  all  mere  irregularities  attending  it ; 
and  ignorance  of  the  facts  which  are  claimed  as  vitiating  the  sale 
is  not  a  sutlicient  explanation  of  such  acquiescence,  when  such  ig- 
liorance  is  the  fault  or  negligence  of  the  party .^ 

Moreover  if  the  mortgagor  receives  the  surplus  money,  although 

1  Candee  v.  Burke,  1  Hun  (N.  Y.),  546;  «  Goldsmith  v.  Osborne,  1  Edw.  Ch.  (N. 

4  T.  &  C.  143;  Fairinnn  v.  Peck,  87  111.  Y.)  5G0. 

156.  '  Hoffman  r.  Harrington,  33  Mich.  .392. 

»  Robinson   v.   Ryan,    2.0    N.   Y.   320  ;  Sec  §  1674. 

Jackson    v.   Bowen,   7   Cow.   (N.  Y.)13;  »  Hamilton  u.  Lubukco,  51  111.415. 

Vroom  V.  Ditmas,  4  I'aige  (N.  Y.),  526.  »  Bush  v.  Sherman,  80  111.  ICO  ;  Fnrrar 

"  vStackpole   v.    Robbins,  47  Barb.  (N.  v.  Payne,  73  III.  82  ;  Wat.son  i'.  Sherman, 

Y.)  212.  84  III.  203;   Landrum   v.  Union  Bank  of 


*  Candee  v.  Burke,  supra.  Mo.  63  Mo.  48. 

6'Schwarz  i-.  Sears,  Walk.  (Mich.)  170. 


707 


§  1923.]       POWER   OF   SALE   MORTGAGES    AND   TRUST    DEEDS. 

he  ni;iv  not  be  estopped  from  questioning  the  validity  of  tlie  sale, 
it  is  a  matter  to  be  considered  in  passing  upon  the  validity  of  it ; 
and  he  would  be  required  to  refund  the  amount  received  before 
his  application  could  in  any  case  be  granted.^ 

15.   Costs  and  Expenses. 

1923.  Mortgagee  not  entitled  to  compensation.  —  A  mort- 
gagee with  a  power  of  sale  is  treated  as  a  trustee  for  sale,  and 
the  general  rule  applicable  to  trustees,  that  they  shall  not  profit 
by  the  trust,  excludes  him  from  claiming  compensation  for  his 
services  in  the  execution  of  his  power  of  sale.  He  is  to  consider 
not  only  his  obligation  to  the  purchaser,  but  his  liability  to  his 
cestui  que  trust  or  mortgagor. ^  The  same  rule  applies  to  a  trus- 
tee in  a  trust  deed.  But  the  mortgage  or  trust  deed  may  provide 
for  compensation  to  the  mortgagee  or  trustee,  and  then  the  agree- 
ment of  the  parties  will,  of  course,  govern.  A  provision  is  fre- 
quently inserted  in  mortgages,  allowing  the  mortgagee  on  a  sale 
to  charge  a  commission  for  his  services ;  and  in  such  case  it  would 
seem  that  a  charge  of  the  stipulated  commission  would  be  allowed 
in  addition  to  the  ordinary  expenses  and  counsel  fees.^  But  the 
mortgagee  may  charge  and  be  allowed  for  all  proper  expenses 
incurred  in  the  execution  of  the  power  of  sale,  whether  the  mort- 
gage expressly  provide  for  the  payment  of  such  expenses  or  not. 
He  may  charge  for  expenses  of  advertising,  for  auctioneers'  fees, 
and  for  counsel  fees  for  advice  as  to  the  proper  execution  of  the 
power.*  Such  expenses  are  properly  chargeable  under  the  mort- 
gage, though  the  attempted  sale  be  discontinued  and  the  prop- 
erty sold  in  some  other  way,  especially  if  such  sale  be  discontin- 
ued at  the  request  of  the  debtor  or  in  his  interest.^ 

In  Maryland,  where  the  power  of  sale  is  executed  under  the 
direction  of  the  court,  the  trustee  for  sale  is  allowed  a  commission 
of  five  per  cent.     But  in  a  case  where  the  owner  of  the  equity  of 

1  Candee  u.  Burke,  1  Hun  (N.  Y.),  546;  ulated  in  the  mortgage,  was  allowed  in 
4  Thomp.  &  C.  143;  Joyner  v.  Farmer,  addition  to  the  expenses  and  counsel  fees 
78  N.  C.  196.  paid.      It   was   contended  that  this  cora- 

2  Sugden  on  Vendors,  55  ;  Allen  v.  mission  was  in  the  nature  of  a  penalty 
Robbins,  7  R.  I.  .33.  which  the   court  should  relieve  against; 

'  Lime  Rock  Bank  v.   Phetteplace,   8  but  it  was  allowed  as  compensation  to  the 

R.  1. 56.                                                         ^  mortgagee.     See  §  1606. 

In   this  case  a  commission  of  five  per  *  Allen  v.  Bobbins,  7  R.  I.  33. 

cent,  on  the  gross  proceeds  of  sale,  as  slip-  ^  Allen  v.  Robbins,  supra. 

708 


COSTS   AND   EXPENSES.  [§§  1924,  1925. 

redemption  requested  an  adjournment  of  the  sale,  and  agreed  to 
pay  the  usual  commissions  for  sale  and  the  expenses  of  the  ad- 
journment, a  claim  for  commissions  in  addition  to  those  for  the 
actual  sale  was  disallowed,  though  the  expenses  of  the  ineffectual 
sale  were  allowed.^ 

The  mere  fact  that  one  is  named  as  trustee  in  a  deed  of  trust 
raises  no  implied  promise  on  the  part  of  the  beneficiary  to  pay 
him  for  his  services.^ 

1924.  Reasonable  expenses  inciirred  in  advertising  a  sale 
under  a  power  are  always  allowed  ;  but  when  a  sale  has  been  en- 
joined after  it  was  advertised,  and  the  mortgagee  or  trustee,  in  an- 
ticipation of  the  action  of  the  court,  incurs  expense  in  advertising 
an  adjournment,  he  is  not  entitled  to  have  this  allowed  to  him  on 
the  dissolution  of  the  injunction  ;  but  reasonable  attorney's  fees 
for  preparing  the  advertisement  may  be  allowed.^  If  the  person 
who  obtains  an  injunction  against  a  sale  allows  the  advertisement 
to  continue,  he  is  chargeable  with  the  whole  expense  of  the  pub- 
lication.* The  expenses  of  an  abortive  sale  must  generally  be 
borne  by  the  mortgagor.^ 

1925.  If  the  power  provides  that  the  mortgagee  may  retain 
all  costs  and  expenses  of  sale,  he  may  retain  a  reasonable  sum 
for  legal  advice  respecting  it,  and  also  for  his  own  time  and 
trouble.^  If,  however,  the  sale  is  not  completed,  but  the  adver- 
tisement, being  imperfect,  is  withdrawn  after  a  single  publication, 
no  attorney's  fees  or  costs  can  be  collected.  A  tender  of  the  full 
amount  of  the  debt  is  good.^  If  after  a  defective  foreclosure  the 
mortgagee  for  any  purpose  of  his  own  deems  it  important  to  pro- 
ceed to  a  new  foreclosure  for  the  correction  of  an  error  in  his  own 

1  Neptune  Ins.  Co.  v.  Dorscv,3  Md.  Ch.  Exch.  249  ;  S.  C  3  Exch.  407  ;  Neptune 
334.  '  Ins.  Co.  V.  Dorsey,  3  Md.  Ch.  334.     See 

2  Catlin  V.  Glover,  4  Tex.  151.  §  1607. 

8  Marsh  v.  Morton,  7.5  111.621.  «  Varnum  v.  Mescrve,  8  Alien  (Mass.), 

In  this  case  the  trustee  advertised  sales  158. 

under  nine  tr^ist  deeds  securing  debts  to  In  this  case  the  judge  of  the  Superior 

the  amount  of  S.-JO.OOO,  and  $150  was  al-  Court  found  to  he  reasonable  in  amount  a 

lowed  for  preparing  them.  charge  of   thirty  dollars   for  legal    advice 

♦  Collins  V.  Standish,  6  How.  (N.  Y.)  and    making    the    deed,  and   another  of 

Pr.  493.     See  opinion  of  Harris,  J.,  in  this  twenty  dollars  for   the    mortgagee's  own 

case  for  »  hill  of  costs,  such  as  is  properly  time  and  trouble  in  relati(m  to  tiie  sale, 

allowable  in  New  York.  ^  Collar  v.  Harrison,  30  Mich.  66. 

6  Sutton  V.  Kawlings,   18  L.  J.  (N.  S.) 

709 


§§  1926,  1027.]       I'OWKR   (W   SALK    MORTGAGES   AND   TRUST    DKKDS. 

procoodiuifs:,  ho  can  noitlior  li'gally  nor  equitably  charge  his  inort- 
gag(n-  with  tlie  expense,^ 

1926.  When  the  bankruptcy  court  orders  the  mortgaged 
property  to  be  sold,  and  the  mortgage  debt  to  be  paid  out  of 
the  proceeds,  with  leave  to  the  mortgagee  to  buy  at  the  sale,  the 
costs  and  expenses  are  properly  payable  out  of  the  proceeds  of 
the  sale,  although  these  are  not  sufficient  to  satisfy  the  debt, 
rather  than  out  of  the  other  assets  of  the  bankrupt  estate.  Such 
cost's  do  not  pertain  to  the  general  administration  of  the  bank- 
rupt's estate,  but  result  from  the  enforcement  of  a  specific  lien 
in  large  part  for  the  benefit  of  the  mortgagee,  the  proceeding 
being  substantially  one  mode  of  foreclosing  the  mortgage.^ 

16.    The  Surplus. 

1927.  Generally  the  mortgage  with  a  power  of  sale  provides 
for  the  disposal  of  the  surplus.  Different  terms  are  used  for  this 
purpose,  and  they  should  conform  to  the  disposal  that  the  law 
would  make  irrespective  of  the  provision  itself ;  ^  though  if  this 
provision  be  imperfect  in  not  meeting  the  circumstances  of  any 
particular  case,  or  if  the  direction  be  different  from  the  disposal 
that  would  be  made  of  the  surplus  under  general  principles  of 
law,  the  direction  in  the  deed  must  yield  to  the  equitable  rights 
of  the  persons  interested.     This  provision  may  be  very  short  and 

.comprehensive;  and  in  the  best  forms  of  conveyances  it  is  simply 
that  the  surplus  shall  go  to  the  mortgagor,  his  heirs  and  assigns.* 
A  direction  that  it  be  paid  to  the  executors  or  administrators  of 
the  mortgagor  is  objectionable,  because  if  the  sale  takes  place 
after  the  death  of  the  mortgagor,  the  land  has  already  passed 
to  his  heirs  or  devisees,  and  the  surplus  then  belongs  to  them, 
notwithstanding  such  direction  ;  the  mortgage  cannot  alter  the 
character  of  the  surplus  as  between  the  personal  representatives 
of  the  mortgagor  and  his  real  representatives.  Objection  has  also 
been  made  to  the  direction  that  the  surplus  shall  be  payable  to 
the  mortgagor,  his  heirs  or  assigns  ;  because  if  the  sale  should  be 
made  in  his  lifetime,  but  his  death  should  occur  before  the  pay- 

^  Clark  V.  Stilson,  36  Mich.  482.  dined  the  proposition  in  the  hope  of  real- 

2  In  re  Eilerhorst,  2  Sawyer,  219.  izing  more. 

The  mortgagee  in  this  case  had  previ-  8  gee  Forms  of  Mortgages,  §  60. 

ously  offered  to  take  the  property  in  sat-  *  Wright  v.   Rose,   2   Sim.  &  St.  323 ; 

isfaction  of  the  debt,  but  the  assignee  de-  Bourne  v.  Bourne,  2  Hare,  35 ;  In  re  Smith, 

710  7  Jur.  (N.  S.)  903. 


THE  SURPLUS.  [§§  1928,  1929. 

ment  of  the  surplus,  this  would  then  go  to  his  personal  represent- 
atives, because  the  land  had  been  converted  into  personalty  at 
the  time  of  his  death.  This  form  is  also  open  to  the  objection 
of  not  being  strictly  correct  in  the  case  of  a  sale  made  after  the 
death  of  the  mortgagor,  when  he  has  by  his  will  directed  his  ex- 
ecutor to  convert  his  real  estate  into  personalty.  The  terms  of 
the  mortgage  in  these  cases  would  have  to  yield  to  these  circum- 
stances under  which  they  do  not  meet  the  equities  of  the  parties. 
Although  the  direction  that  the  surplus  shall  be  paid  to  the  mort- 
gagor, his  heirs  or  assigns,  does  not  fully  meet  these  exceptional 
cases,  no  harm  can  come  from  this,  because  the  surplus  is  in  all 
cases  bound  by  the  actual  rights  and  equities  of  the  parties  inter- 
ested. No  form  of  words  can  be  used  which  will  in  every  case 
fully  point  out  to  the  mortgagee  the  persons  to  whom  he  is  to  pay 
the  surplus  ;  and  that  form  which  is  correct  generally,  and  is  the 
most  concise,  is  the  best.^  The  mortgagee  cannot  be  relieved  of 
the  responsibility  of  determining  who  are  th^  persons  entitled  ac- 
cording to  law,  unless  in  cases  of  doubt  he  refers  the  determi- 
nation of  this  question  to  the  courts.  Complications  may  arise 
which  may  make  such  a  reference  the  only  safe  course ;  but  usu- 
ally there  is  no  difficulty  in  determining  who  are  entitled  under 
the  law,  and  the  direction  to  pay  to  the  heirs  or  assigns  of  the 
mortgagor  affords  as  much  aid  as  any  other,  however  elaborate. 

1928.  If  the  surplus  in  the  hands  of  the  mortgagee  remains 
unproductive  while  adverse  claims  are  made  upon  him  by  differ- 
ent persons,  he  is  not  chargeable  with  interest  pending  the  de- 
termination of  their  rights.^  It  may  happen  that  on  account  of 
adverse  claims,  or  on  account  of  the  absence  or  death  of  the  mort- 
gagor or  other  person  entitled  to  the  surplus,  that  much  time  may 
elapse  before  payment  of  the  surplus  can  be  made,  in  which  case 
it  is  advisable  either  to  pay  the  money  into  court,  or  to  safely  in- 
vest it  as  a  trust  fund  pending  the  settlement  of  the  question 
to  whom  it  shall  be  paid,  or  the  appearance  of  the  rightful 
claimant. 

1929.  The  surplus  proceeds  must  be  applied  according  to 
the  title  of  the  respective  parties  in  the  property  itself.     If  the 

1  The  statutory  power  of  sale  in  Enp-     istrators,   or   assitriis,   nccordinir   to  their 
land  directs  the  payment  of  the  surplus  to     respective  rights  and  intirests  therein, 
the  mortgagor,  his  heirs,  executors,  admin-         "^  Muthison  v.  Chirk,  25  L.J.   (Ch.)  N. 

S.  29  ;  4  W.  U.  30. 

Til 


§§  1930,  1931.]       POWER    OF   SALE   MORTGAGES   AND   TRUST   DEEDS. 

salt'  lu'  uiuliT  the  first  mortgage  tlie  holders  of  the  second  iiiort- 
gago  are  lirst  entitled,  and  then  the  next  subsequent  mortgagees 
in  their  order,  and  last,  the  mortgagor  or  owner  of  the  equity  of 
redemption.  The  purchaser  of  the  equity  of  redemption  stands 
in  place  of  the  mortgagor  in  respect  to  this  right.^  But  the  con- 
sent of  a  second  mortgagee,  that  the  surplus  arising  from  a  sale 
nnder  the  first  mortgage  may  be  paiii  to  a  purchaser  of  the  equity 
of  redemption,  will  not  authorize  such  payment  as  against  the 
mortgagor,  without  discharging  the  debt  secured  by  the  second 
mortgage  ;  because  the  mortgagor  is  entitled  to  have  the  mort- 
gage debts  on  which  he  is  personally  liable  satisfied  before  any- 
thing is  paid  over  to  one  who  purchased  only  the  equity  to  redeem 
both  mortgages.^ 

The  right  of  the  surplus  passes  to  the  grantee  of  the  mortgagor 
by  a  conveyance  of  the  equity  of  redemption,^  or  by  a  mortgage 
of  it.  But  if  the  lien  of  a  subsequent  mortgagee  is  not  affected 
by  the  sale,  by  reason  of  any  irregularity  in  it,  such  as  a  want  of 
notice  to  him  of  the  proceeding,  when  this  was  required  by  the 
power  or  by  statute,  he  has  no  claim  upon  the  surplus.  His  claim 
is  in  such  case  upon  the  land.* 

1930.  Notice  of  claims  to  the  surplus  money  must  be  given 
to  the  mortgagee,  or  he  must  have  actual  notice  of  the  incum- 
brances on  which  such  claims  may  be  founded,  or  he  will  not  be 
responsible  for  not  applying  the  surplus  towards  the  payment  of 
them.''' 

1931.  A  surplus  arising  on  the  sale  of  real  estate  under  a 
power  after  the  death  of  the  mortgagor  belongs,  under  the  rule 
in  England,*^  adopted  also  in  New  York,"  and  other  states,^  to  his 

1  §  1688;  Cook  v.  Basley,  123  Mass.  mortgagor,  then  the  surplus  moneys  would 
396;  Buttrick  v.  Wentworth,  6  Allen  have  been  personal  estate  of  the  mort- 
(Mass.),  79;  Foster  v.  Potter,  37  Mo.  534;  gagor,  and  the  plaintiffs  would  have  been 
Reid  V.  Mullins,  43  Mo.  306  ;  Ballinger  v.  entitled.  But  the  estate  being  unsold  at 
Bourland,  87  111.  513.  the  death  of  the  mortgagor,  the  equity  of 

2  Andrews  v.  Fiske,  101  Mass.  422.  redem]>tion  descended  to  his  heir,  and  he  is 
2  Buttrick     v.     Wentworth,     6    Allen     now  entitled  to  the  surplus  produce."    Per 

(Mass.),  79.  the  Vicc-Chancellor.     See,  also,  Polley  v. 

*  Winslow  V.  McCali,  32  Barb.  (N.  Y.)  Seymour,  2  Yo.  &  Coll.  721  ;  Bourne  v. 

241.  Bourne,  2  Hare,  35,  39. 

''  M'Lean   v.   Lafayette   Bank,    4    Mc-  ''  Dunning  v.  Ocean  Nat.  Bank,  61  N. 

Lean,  4.'iO.  Y.  497  ;   Sweezy  v.  Thayer,  1  Duer  (N. 

«  See  §  1695;  Wright  v.  Rose,  2  Sim.  Y.)  286. 

&  Stu.  323.     "  If  the  estate  had  been  sold  «  Chaffee   v.  Franklin,    11    R.    I.    578  ; 

by  the  mortgagee  in  the  lifetime  of   the  Shaw  v.  Hoadley,  8  Blackf.  (Ind.)  165. 

712 


THE   SURPLUS.  [§  1932. 

heirs  or  devisees,  and  not  to  his  administrator,  who  cannot  main- 
tain an  action  to  recover  it,  although  the  mortgage  itself  provides 
that  the  surplus  shall  be  paid  to  the  mortgagor,  his  executor,  or  ad- 
ministratoi'.  The  heirs  or  devisees  are  also  entitled  to  the  profits 
of  the  surplus  in  the  mortgagee's  hands  until  legal  measures  be 
taken  by  the  administrator  of  the  estate  to  apply  the  surplus  to 
the  payment  of  the  debts  of  the  mortgagor.^  In  support  of  this 
view,  it  is  urged  that  the  provision  in  the  mortgage  for  the  pay- 
ment of  the  surplus  should  be  construed  that  the  payment  is  to  be 
made  to  the  executor  or  administrator  whenever  it  might  have 
been  collected  by  the  mortgagor,  as  for  example  when  the  land  is 
sold  in  his  lifetime.  Moreover,  it  is  to  be  observed  that  in  New 
York  the  equity  of  redemption  is  the  legal  estate,  and  the  mort- 
gage only  a  lien. 

In  Massachusetts,  on  the  other  hand,  it  is  held  that  the  action 
in  such  case  should  be  maintained  by  the  administrator,  who  will, 
however,  hold  the  money  when  collected  in  trust  for  the  persons 
who  would  have  been  entitled  to  the  land  if  no  sale  had  been 
made.2  All  the  cases  recognize  the  doctrine,  that  the  surplus  is 
equitable  real  estate,  and  should  go  to  the  persons  who  would  be 
entitled  to  the  equity  of  redemption.  They  differ  as  to  the  mode 
in  which  the  parties  in  interest  shall  obtain  their  rights,  rather 
than  as  to  the  rights  themselves.  One  reason  why  the  administra- 
tor should  be  entitled  to  recover  is,  that  if  the  equity  of  redemp- 
tion had  not  been  sold  it  would  have  remained  subject  to  the  debts 
of  the  deceased,  and  might  have  been  sold  under  a  license  to  the 
administrator,  if  required  for  that  purpose  ;  and  therefore  the  ad- 
ministrator should  take  the  sur[)lus  and  liold  it  until  it  is  certain 
that  it  will  not  be  required  for  the  payment  of  debts.  Moreover, 
there  is  force  in  the  fact  that  the  right  of  the  mortgagor's  per- 
sonal representative  to  recover  is  direct  under  the  contract. 

1932.  In  case  of  the  insolvency  or  bankruptcy*  of  the  mort- 
gagor,   a  provision  that    the   surplus,   after  satisfying  the   debt, 

»  Allen  V.  Allen    (K.  I.   187'J),  Index  to  stead  ;  second,  for  the  piiyinont  of  debts; 

Decisions,  J,  102.  ""d  third,  to  the  use.s  of  the  will. 

2  Varnum  v.  Mcserve,  8  Allen  (Mass.),  In  Michigan  it  is  held  that  the  surpliiB 

158.     The  surplus  in  such  caHe  belon(,'s  to  is  ].ers<)iiiil   estate,  and  eon-setjnently  that 

the  executor,  althonf,'h  the  mortua>,'or  hy  the  personal  representatives  of  the  owner 

will  devised  the  land  to  others  ;  and  he  will  of  the  equity  should  be  made  parties  to  a 

hold  such  surplus,  first,  to  the  u.se  of  the  petition  for  the  surplus.     Smith  v.  Smith, 

widow  haviuf,'  a  paramount  right  of  home-  1.3  Mich.  2.58. 

713 


§§  1933, 1934.]     POWER  of  salk  mortgages  and  trust  deeds. 

sliall  bo  paiil  to  the  mortgagor  without  naming  his  assigns,  does 
not  create  any  trust  for  his  hcnclit,  but  the  surphis  will  go  to  his 
assignee  in  bankruptcy.^ 

When  a  mortgage  is  foreclosed  after  the  death  of  the  mortgagor, 
and  his  estate  is  insolvent,  the  mortgagee  cannot  retain  a  surplus 
in  his  hands  and  apply  it  to  the  payment  of  a  simple  contract 
debt  due  him  from  the  mortgagor,  as  this  would  give  him  a  pref- 
erence over  other  creditors,  but  he  must  hand  it  over  to  the  per- 
sonal representatives  of  the  deceased.  The  mortgagee  is  merely 
a  trustee  of  the  surplus.^ 

1933.  Dower  in  surplus.  —  By  the  foreclosure  sale  the  mort- 
gagor's right  of  redemption  is  converted  into  a  claim  upon  the 
surplus  money  in  the  mortgagee's  hands.  It  is  personalty,  and 
belongs  to  those  who  are  entitled  to  his  personal  estate.  The  wife 
of  the  owner  of  the  estate,  subject  to  a  mortgage  valid  against 
her,  has  no  claim  to  any  part  of  the  surplus  proceeds  of  a  fore- 
closure sale  under  the  mortgage,  as  against  her  husband  or  his 
assignees  in  bankruptcy.^  The  sale  is  as  effectual  in  barring  all 
claim  or  possibility  of  dower  in  the  property,  as  if  the  foreclosure 
had  been  by  entry  for  breach  of  condition  and  lapse  of  time.  The 
death  of  the  husband  after  the  sale,  but  before  the  distribution  of 
the  money,  would  not  avail  to  endow  the  widow  of  the  surplus, 
as  the  rights  of  all  parties  are  fixed  at  the  time  of  the  sale.  If 
the  sale  take  place  after  the  death  of  the  mortgagor,  then  his 
widow  is  entitled  to  dower  in  the  surplus.^ 

Some  courts  have  held  that  if  there  be  a  surplus  after  a  fore- 
closure sale,  the  wife's  inchoate  right  of  dower  will  be  protected 
either  by  investing  one  third  of  the  amount  to  await  the  perfec- 
tion or  cessation  of  such  right,  or  by  calculating  the  present  value 
of  her  chance  of  surviving  her  husband,  and  paying  to  her  at 
once  such  sum.''     But  this  is  an  exceptional  holding. 

1934.  When  the  equity  has  been  sold  under  execution  or 
attached. —  The  mortgage  usually  provides  that  the  surplus,  after 
payment  of  the  mortgage  debt  and  expenses,  shall  be  paid  to  the 
mortgagor  or  his  assigns  ;  and  in  such  case  the  surplus  belongs  to 

1  Callowaj  V.  People's  Bank  of  Belle-         «  ChaflFee  v.  Franklin,  11  R.  I.  578. 
fontaine,  54  Ga.  441,  450.  ^  §  1694;  De  Wolf  v.  Murphy,  II  R. 

2  Talbot  1-.  Frere,  L.  R.  9  Ch.  D.  5(J8.         I.  630. 
8  §§  1693,  1694  ;  Newhall  v.  Lynn  Five 

Cents  Sav.  Bk.  101  Mass.  428. 

714 


THE   SURPLUS.  [§  1934. 

the  person  who  is  at  the  time  of  the  sale  the  owner  of  the  equity 
of  redemption.  If  the  equity  of  redemption  has  been  sold  on 
execution  before  a  sale  of  the  land  under  a  power  in  the  mort- 
gage, the  surplus  then  belongs  to  the  purchaser  at  the  execution 
sale,  for  the  sale  and  conveyance  on  execution  constitute  such 
purchaser  the  owner  of  the  equity  of  redemption.  But  if  the 
equity  of  redemption  be  attached,  and  pending  the  suit  the  mort- 
gagee sells  under  such  a  power  in  the  mortgage,  and  judgment  and 
execution  follow,  and  the  execution  be  levied  by  a  sale  of  the 
land,  the  levy  is  a  nullity  so  far  as  respects  the  title  to  the  land ; 
and  as  respects  the  surplus  in  the  hands  of  the  mortgagee  of  the 
proceeds  of  the  sale  under  the  mortgage,  it  gives  the  purchaser 
no  right  or  title  ;  and  he  cannot  maintain  either  an  action  at  law 
for  money  had  and  received,  or  a  bill  in  equity  to  recover  such 
surplus,  if  brought  or  filed  more  than  thirty  days  after  judgment 
was  recovered.^ 

Whether  by  any  form  of  process  at  law  or  in  equity  brought 
within  the  period  after  judgment  during  which  the  attachment 
continues  a  lien,  the  creditor  could  reach  and  apply  to  his  claim 
the  surplus  in  the  mortgagee's  hands,  is  a  question  which  was  not 
decided  in  the  case  last  cited,  but  was  determined  in  a  case  which 
arose  in  the  same  court  soon  afterwards  ;  and  it  was  there  decided 
that  when  land  subject  to  a  mortgage  is  attached  on  mesne  proc- 
ess, and  before  judgment  is  recovered  the  land  is  sold  under  a 
power  of  sale  in  the  mortgage,  for  more  than  enough  to  pay  the 
debt  and  expenses  of  sale,  the  attaching  creditor  may  by  a  bill 
in  equity,  brought  within  thirty  days  after  judgment  in  the  ac- 
tion in  which  the  attachment  was  made,  enforce  his  lien  against 
the  surplus.^ 

If  at  the  time  of  the  sale  under  a  trust  deed  the  property  has 
been  sold  under  a  junior  judgment,  and  the  title  has  become  ab- 
solute in  the  ptirchaser  by  the  expiration  of  tiic  time  allowed  for 
redemption,  so  that  he  has  received  a  deed  of  the  i)r()perty,  or  is 
entitled  to  one,  he  is  then  entitled  to  receive  the  whole  of  any 
surplus  there  may  be  after  discharging  the  debt  secured  by  the 
trust  deed  and  the  expenses  ;  but  if  the  land  has  been  sold  under 
execution,  and  the  time  for  redemption  has  not  expired,  and  the 
purchaser  is  not  entitled  at  tiie  time  of  the  sale  under  the  trust 

1  Gardner  r.  Barnes,  106  Mass.  505.  Judge  v.    Herbert,    124   Muss.   330;    De 

2  Wiggin  V.  Ilejwood,   118  Mass.  514;     Wolf  v.  Murphy,  11  R.  I.  C30. 

715 


§§  19o5,  1036.]     rowr.n  of  sale  moutgages  and  trust  deeds. 

iloed  to  a  dd'd  oonfcrring  the  title  upon  him,  ho  thou  has  only  a 
lien  upon  the  surplus,  and  is  entitled  to  only  so  much  of  it  as  will 
satisfy  the  amount  of  his  bid  and  the  interest  thereon  allowed  by 
statute.  In  the  latter  case  the  grantor  in  the  trust  deed  is  enti- 
tled to  the  remainder  after  satisfying  the  judgment  lien,  although 
his  right  to  redeem  has  expired,  but  the  purchaser's  right  has  not 
become  absolute  by  the  expiration  of  the  time  within  wiiich  there 
can  be  a  redemption  from  him  by  any  ojie  else  ;  as  where  twelve 
months  are  allowed  the  debtor  for  redemption,  and  three  months 
more  for  redemption  by  a  creditor,  and  the  sale  under  the  trust 
deed  takes  place  during  these  three  months.' 

1935.  Judgment  lien.  —  The  sale  cuts  off  all  right  of  redemp- 
tion, and  prevents  any  levy  of  execution  upon  the  land  by  virtue 
of  the  attachment.  The  land  is  turned  into  money,  which  is  to 
be  applied  in  the  first  instance  to  the  payment  of  the  debt  and 
expenses  of  the  mortgagee,  and  any  surplus  to  the  same  persons 
the  land  belonged  to  before  the  sale.  Their  respective  rights  in 
the  fund  are  not  affected  by  the  sale  ;  and  the  court  will  apply 
the  money  according  to  the  rights  of  the  parties  as  they  existed 
before  the  real  estate  was  turned  into  money.^  If  there  be  a 
judgment  lien  upon  the  equity  of  redemption,  this  must  be  satis- 
fied before  tlie  owner  can  claim  anything.^ 

1936.  Where  the  payment  of  a  mortgage  debt  has  been 
charged  upon  a  portion  of  the  mortgaged  premises,  by  reason 
that  the  mortgagor  has  given  a  warranty  deed  of  the  other  por- 
tion, the  charge  in  equity  attaches  to  the  surplus  arising  from  the 
sale  of  the  land  by  a  prior  mortgagee.* 

If  there  are  sureties  upon  part  of  the  debt  secured  by  the 
mortgage,  upon  a  sale  of  the  property  the  mortgagee  becomes  a 
trustee  for  them  to  the  amount  of  the  funds  provided  for  their 
indemnity,  and   must  see  that  their  just  proportion  of  the  pro- 

1  Hart  V.  Wingate,  83  111.  282.  A  pre-  Fry's  Appeal,  76  Pa.  St.  82 ;  Douglass's 
vious  judgment  in  this  case  under  the  Appeal,  48  Pa.  St.  222;  De  Wolf  v. 
name  of  Solt  v.  Wingate,  8  Chicago  Legal  Murphy,  11  R.  I.  630;  Bartlett  v.  Gale, 
News,  179;  2  N.  Y.  Weekly  Dig.  98,  4  Paige  (N.  Y.),  503;  Barber  v.  Gary,  11 
which  was  clearly  contrary  to  principle  Barb.  (N.  Y.(  549. 

and  authority,  was  with  drawn.     In  sup-         ^  Eddy  v.   Smith,    13    Wend.    (N.   Y.) 

port  of  the  text  see,  also,  Snyder  v.  Staf-  488  ;  Hall  v.  Gould,   79  111.  16.     See  §§ 

ford,  11  Paige  (X.  Y.),  71.  1687,  1688. 

2  Astor  V.  Miller,  2  Paige  (N.  Y.),  68 ;         *  Beard  v.  Fitzgerald,  105  Mass.  134. 

716 


THE  SURPLUS.  [§§  1937,  1938. 

ceeds  is  applied  to  the  discharge  of  the  debt  upon  which  they  are 
bound. ^ 

1937.  "When  property  is  sold  under  a  mortgage  or  deed  of 
trust  to  satisfy  one  instalment  of  the  debt  before  the  others 
have  matured,  and  there  is  no  provision  that  the  whole  debt  shall 
be  due  and  payable  upon  a  default  upon  any  part  of  it,  the  trus- 
tee holds  any  surplus  there  may  be,  after  satisfying  the  expenses 
and  the  part  of  the  debt  then  due,  subject  to  the  same  lien  as  the 
property  was.^  The  mortgagor  has  no  claim  to  it.  When  the 
mortgage  provides  that  the  whole  debt  shall  become  due  upon 
any  default,  either  the  mortgagor  or  his  assignee  is  authorized  to 
exercise  the  option  to  declare  due  all  the  notes  secured  by  the 
mortgage,  and  to  advertise  and  sell  the  premises  in  payment  of 
the  whole  debt.^  The  trustee  in  a  deed  of  trust  has  the  same 
right,  and  is  not  bound  to  give  any  notice  to  the  debtor  of  his 
election  to  treat  the  whole  debt  as  due.* 

1938.  Payment  of  whole  debt  on  a  sale  for  an  instalment. 
—  It  is  not  necessary,  in  order  to  authorize  a  sale  under  a  power 
and  the  payment  of  the  whole  debt  upon  default  in  the  payment 
of  an  instalment  of  the  debt,  before  the  whole  of  it  has  matured, 
that  there  should  be  an  express  provision  that  the  whole  may  in 
such  event  become  due  and  be  collected.^  Although  it  is  true 
that  a  power  to  sell  the  property  in  the  event  of  any  default,  and 
out  of  the  proceeds  to  retain  the  principal  and  interest  then  due, 
while  it  authorizes  the  sale  of  the  entire  property,  does  not  make 
the  entire  debt  due  and  collectible  upon  the  first  default ;  yet  if 

1  §  1706 /Fielder u.  Varner,  45  Ala.  429.     same,  and    all   benefit   and  equity  of   re- 

2  §§  1699-1703 ;  Iluffard  i;.  Gottberg,  54  demption,  &c.,  and  to  make  and  deliver  to 
Mo.  27 1 .  the  purchaser  or  purchasers  thereof  a  good 

8  Heath  v.  Hall,  60  111.  344.  and  sufficient  deed  for  the  same,  in  fee  sim- 

♦  Princeton  I-x>an  &.  Trust  Co.  v.  Mun-  pie,  and  out  of  the  money  arising  from 

son,  60  III.  371.  such  sale  to  retain  the  principal  and  in- 

6  Olcott  V.  Byuum,  17  Wall.  45.  terest  which  shall  then  be  due  on  the  said 

The    power  was  as  follows  :  "  That  if  bond  or  obligation,  together  with  the  costs 

default  shall  be  made  in   the  payment  of  and  charges  of  advertising  and  sale  of  the 

the  said  sum  of  money,  or  the  interest  that  same  premises,  rendering  the  overplus  of 

may  grow  due  thereon,  or  of    any  part  the  purchase  money,  if  any  there  shall  be, 

thereof,  that  then,  and  upon  failure  of  the  unto  the  said  Ilovey,"   the  grantor.     Mr. 

grantor  to  pay  the  first  or  any  subsequent  Justice  Swayne  said   that  the  mortgagee 

instalment,   as    hereinbefore   specified,   it  in  this  case  having  applied  the  fund  as  a 

shall  be  lawful  for  the   trustee  to  enter  court  of    e*}uity  would    have   apjjlied    it, 

upon  all  and  singular  the  premises  hereby  there  was  no  ground  for  complaint. 

granted,  and  to  sell  and   dispose  of    the 

717 


§  1030.]      POWER   OF   SALE    MORTGAGES   AND   TRUST   DEEDS. 

the  property  be  incapable  of  division  without  injury,  and  is  sold 
upon  the  first  dtf;iult,  aiul  yields  a  fund  suflicient  to  pay  the 
whole  debt,  it  may  be  so  applied  at  once,  so  as  to  stop  interest 
and  extinguish  the  whole  liability. 

Generally  the  power  of  sale  authorizes  the  mortgagee,  upon 
making  a  sale,  to  retain  from  the  proceeds  the  whole  amount  of 
his  demand,  whether  it  be  due  or  not.  In  several  states,  as  in 
Michigan,  Minnesota,  New  York,  and  Wisconsin,  the  statutes  reg- 
ulating sales  under  powers  provide  that  if  the  premises  consist  of 
distinct  parcels  or  lots,  no  more  shall  be  sold  than  is  sufficient  to 
satisfy  the  amount  due  on  the  mortgage  with  interest  and  costs.^ 
When  it  is  proper  to  sell  the  whole  mortgaged  premises  together, 
the  whole  debt  may  be  retained  from  the  proceeds.  These  stat- 
utes do  not  contemplate  a  sale  subject  to  instalments  not  due  at 
the  time  of  the  sale.^  The  powers  are  never  drawn  with  a  view 
to  such  a  proceeding.  In  this  respect  the  effect  of  the  sale  in  the 
payment  of  the  debt  is  quite  different  from  that  of  a  foreclosure 
sale  in  equity,  where  provision  may  be  readily  made  for  further 
sales  to  meet  future  instalments,  or  for  the  care  of  the  money  re- 
ceived in  excess  of  the  amounts  due,  and  the  payment  of  the  in- 
stalments as  they  mature.  Except  under  the  statute  there  can 
be  no  sale  of  the  mortgaged  estate  to  pay  the  amount  already  due, 
subject  to  the  future  instalments.  The  mortgage  is  extinguished 
by  such  sale,  though  relief  might  be  had  in  equity  against  the 
purchaser. 

1939.  If  a  sale  is  made  when  only  part  of  the  mortgage 
notes  have  matured,  under  a  notice  of  a  sale  to  be  made  subject 
to  another  note  specified,  the  presumption  is  conclusive  that  the 
land  sold  for  the  amount  of  the  unpaid  notes  less  than  it  would 
otherwise  have  done.  The  mortgagor  may  then  insist  that  pay- 
ment of  such  notes  shall  be  made  out  of  the  land  upon  which  they 
have  become  by  the  mortgage  and  sale  an  express  charge.  There- 
fore there  can  be  no  action  against  him  for  these  notes.  The 
fact  that  the  mortgagees  became  purchasers  under  the  foreclosure 
sale  places  them  in  no  better  position,  in  regard  to  collecting  the 
notes  of  the  mortgagor,  than  if  a  third  party  had  purchased  sub- 
ject to  the  notes.     If  the  mortgagor  should  be  compelled  to  pay 

1  See  Statutes,  §§  1340,  1343,  1351,  248;  Jencks  v.  Alexander,  11  lb.  619; 
1364.  Bunce   v.    Heed,    16   Barb.  (N.  Y.)  347; 

2  Cox   V.   Wheeler,   7   Paige   (N.  Y.),     Barber  r.  Gary,  1 1  lb.  549. 

718 


THE   SURPLUS.  [§  1940. 

the  note  he  would  be  subrogated  to  the  mortgage  security,  and 
might  proceed  to  collect  the  amount  of  these  notes  out  of  the 
land.  To  prevent  cii'cuity  of  action,  a  suit  upon  the  notes  against 
the  mortcragor  is  not  allowed.^ 

As  already  noticed,  it  is  a  settled  rule  of  law  in  several  states 
that  where  a  mortgage  or  deed  of  trust  has  been  given  to  secure 
the  payment  of  several  notes,  which  become  due  at  different 
times,  the  notes  have  priority  of  lien,  in  the  order  in  which  they 
become  due  and  payable.^  Accordingly,  where  the  first  note  fall- 
ing due  of  a  series  of  notes  secured  by  a  trust  deed  belonged  to 
one  party,  and  the  other  notes  to  another,  and  the  trustee,  at  the 
request  of  the  holder  of  the  note  first  due,  advertised  the  prop- 
erty for  sale  to  pay  his  note,  and  afterwards,  at  the  request  of  the 
holder  of  the  other  notes,  advertised  and  sold  the  property  at  an 
earlier  day  to  the  latter,  and  then  upon  the  day  of  sale  under  the 
first  advertisement  sold  the  property  again  to  the  holder  of  the 
first  maturing  note,  it  was  held  that  although  the  purchaser  at  the 
first  sale  took  the  legal  title,  a  court  of  equity  woukl  set  aside 
the  first  sale  and  order  another,  from  the  proceeds  of  which  the 
several  notes  should  be  paid,  according  to  the  order  of  their  ma- 
turity.^ 

1940.  The  rights  of  different  claimants  of  the  surplus 
money  may  be  determined  in  suits  brougJit  by  them  against  the 
mortgagee  for  money  had  and  received  ;^  or  he  may  himself  by 
bill  of  interpleader  bring  the  claimants  into  court  and  ask  for  its 
direction  to  whom  to  pay  it.  He  is  in  some  sort  a  trustee  of  the 
money  in  his  hands  for  those  entitled  to  it,  and  should  retain  it 
until  the  rights  of  tlie  parties  are  determined.^ 

If  a  second  mortgagee,  instead  of  selling  the  title  mortgaged  to 
him,  sells  with  the  assent  of  the  prior  mortgagee  the  entire  title  in 
the  land,  the  surplus  remaining  after  paying  the  first  and  second 
mortgages  belongs  to  the  next  subsequent  parties  in  intei-est,  and 

1  Shermer  v.  Merrill,  S.'J  Mich.  284.  Cook  v.  Basley,  12.3  Mass.  396.  As  to 
See  §  1469.  proceedings  in  New  York,  to  determine  to 

2  §  1699;  Flower  v.  IClwood,  66  111.  whom  the  surplus  lielongs,  see  Kirhy  v. 
438;  Ilerrington  v.  McCoilum,  73  III.  Fitzgerald,  31  N.  Y.  417;  Matthews  v. 
476.  Duryce,  45  IJurb.  69.     But  now  provision 

8  Koester  v.  Burke,  81  111.  438.  is  made  by  statute,  which  see,  §  1761. 

♦  Co|)e  i;.  Wheeler,  41  N.  Y.  .303;  t>  Blecker  v.  Graham,  2  Kdw.  (N.  Y.) 
Matthews  i;.  Duryee,  45  Barb.  (N.  Y.)  69;  647;  People  v.  Ulster  Com.  Pleas,  18 
Bevier  I'.  Schoonmaker,  29  How.  (N.  Y.)  Wend.  (N.  Y.)  628;  Bevior  v.  bchoon- 
Pr.  411  ;  Webster  v.  Singley,  53  Ala.  208;     maker,  29  How.  (N.  Y.)  411. 

719 


§  1940.]       rOWKK    OF    SALK    MOIMCJAGKS    AND    I  laLST    DKEDS. 

;i  third  niortgagi'o  iiiiiy  niaiiitiiin  an  action  lor  money  had  and  re- 
ceived. The  fact  that  the  sale  was  not  made  subject  to  the  first 
mortgage  does  not  affect  the  rights  of  the  third  mortgagee.^ 

Suit  for  the  surphis  by  the  person  entitUul  to  it  is  at  law  and 
not  in  equity.^  Assumpsit  lies  against  the  mortgagee  for  the 
surplus  arising  from  the  sale,  unless  his  obligation  to  [)ay  it  is  in 
the  form  of  a  covenant  or  agreement  under  seal.^  Where  by  stat- 
ute the  mortgagee  is  autliorized  to  pay  the  surplus  into  court, 
or  to  the  sheriff"  or  other  officer  who  makes  the  sale,  such  payment 
is  a  good  defence  to  a  suit  brougiit  against  him  to  recover  the  sur- 
plus.* 

It  has  been  held  that  an  agreement  of  the  mortgagee  to  pay 
tlie  surplus  to  the  mortgagor  does  not  extend  to  subsequent  incum- 
brancers, so  as  to  give  them  any  right  of  action  for  a  surplus  not 
actually  received  by  the  mortgagee,  but  allowed  by  him  to  be  re- 
tained by  the  purchaser  under  a  claim  of  his  own  upon  the  prop- 
erty. The  court  say  that  although  a  trust  would  in  such  case 
arise  in  favor  of  the  mortgagor,  yet  he  cannot  be  regarded  as  a 
trustee  for  subsequent  incumbrancers  until  the  surplus  money  has 
actually  been  received  by  him.^  The  purchaser,  however,  would 
be  liable  to  the  incumbrancer  entitled  to  the  surplus. 

1  Cook  V.  Baley,  123  Mass.  396.  *  Bailey  v.  Meriitt,  7  Minn.  159. 

2  Bailinger  v.  Bourland,  87  111.  513.  &  Russell    v.   Duflon,  4  Lans.   (N.   Y.) 
8  Stoever  v.  Stoever,  9  Serg.  &  R.  (Pa.)     399. 

434;  Cope  v.  Wheeler,  41  N.  Y.  303. 
720 


INDEX. 


Reference  is  to  Sections. 

ABSOLUTE  CONVEYANCE,  made  for  security,  is  a  mortgage,  264. 

delivered  in  payment  of  an  existing  debt,  267. 

parol  evidence  to  show  mortgage,  282-342. 

true  character  of,  inquired  into,  324. 

based  on  preexisting  debt,  326. 

delay  in  asserting  it  to  be  a  mortgage,  330. 

immaterial  that  it  is  made  by  debtor,  331. 

when  a  trust,  332. 

grantor  redeeming  must  do  equity,  336. 

election  to  treat  conveyance  as  absolute,  358. 

as  to  third  persons  grantee  is  owner,  339. 

grantee's  liability  for  land  sold,  341. 

bill  in  equity  to  redeem  as  from  mortgage,  342. 

an  alienation  within  terms  of  an  insurance  policy,  423. 

record  of  separate  defeasance,  548. 

purchaser  may  rely  upon  apparent  title,  548. 

grantor  in  may  redeem,  when  a  mortgage,  1060. 

grantee  in  possession  liable  to  account,  1117. 
ABSTRACT  OF  TITLE,  mortgage  of,  148. 
ACCEPTANCE  OF  MORTGAGE,  essential  to  its  execution,  84. 

subsequent,  85. 

by  cestui  que  trust  presumed,  88. 
ACCESSIONS  to  mortgaged  property,  when  covered  by  mortgage,  149 

products  of  the  soil,  150. 

growing  crop,  151. 

to  the  franchise  of  a  corporation,  155. 

of  vendor  in  f)Osscssion,  231. 
ACCIDENT  Oli  MISTAKE,  ground  for  relief  from  foreclosure,  1275. 

ground  for  setting  aside  foreclosure  sale,  1675. 
ACCOUNT,  of  mortgagee  in  possession,  1 1 14-1143. 

reference  to  state,  1104. 

wholly  a  matter  of  equitable  jurisdiction,  1 115. 

mortgagee  chargeable  only  upon  redemption,  1116. 
VOL.  u.  4G  721 


INDKX. 
Rercreiice  is  to  Sections. 

ACCOUNT  —  coiifiiiiicl. 

ojrantee  in  possession  under  absolute  deed,  1117. 
who  is  liable  to  account,  1]  18. 

assij;nee  stands  in  place  of  assignor  respecting,  1119. 
no  liability  unless  possession  be  taken,  1120. 
What  the  mortgagee  is  chargeable  with,  1121-1125. 

when  mortgagor  remains  in  possession,  1121. 
when  mortgagee  himself  occupies,  1122. 
accountable  only  for  actual  rents,  1123. 
except  in  case  of  wilful  default  or  negligence,  1123. 
when  he  has  kept  no  proper  accounts,  1124. 
working  of  a  mine,  1125. 
Allowances  for  repairs  and  imjyrovements,  112G-1131. 
rule  as  to  repairs,  1126. 
rule  as  to  improvements,  1127. 
exception  to  rule,  1128. 
necessary  and  ornamental  repairs,  1129. 
when  property  intermingled,  1130. 
expenses  of  running  a  church,  1131. 
Allowance  of  compensation,  1132,  1133. 

mortgagee  not  entitled  to,  for  his  own  services,  1132. 
rule  in  Massachusetts,  1133. 
rule  in  Connecticut,  1133. 
Allowance  for  disbursements,  1134-1138. 
taxes  paid  by  mortgagee,  1134. 
insurance  premiums,  1135. 
prior  incumbrances  paid,  1137. 
counsel  fees  paid,  1138. 
Annual  rests,  1139-1143. 

rule  for,  in  stating  account,  1139. 
when  there  is  a  surplus  of  rents,  1140. 
binds  subsequent  incumbrancers,  1142. 
may  be  opened  for  fraud,  1143. 
ACCOUNTING,  payment  by,  919-923. 
ACKNOWLEDGMENT  essential  to  admit  to  record,  83. 
before  deed  is  written,  not  valid,  83. 
a  requisite  to  registration,  527,  533. 
by  attorney,  533. 

officer  taking  must  be  qualified,  534. 
is  a  ministerial  act,  535. 
certificate  of  official  character  of  officer,  536. 
certificate  of  officer's  personal  acquaintance,  537. 
722 


INDEX. 
Reference  is  to  Sections. 

ACKNOWLEDGMENT  —  co«^»2«erf. 

certificate  of  not  conclusive,  538. 
a  mistake  in,  538. 
as  to  statements  of  facts,  538. 
fraud  in,  538. 

of  right  of  redemptio7i,  by  mortgagee  in  possession,  11G2,  1171. 
ACTION  when  right  of  accrues  on  mortgage  debt,  76, 1174-1191, 1289. 

right  of  subject  to  mortgage,  159. 

defence  that  right  of  has  not  accrued,  1301. 

bill  to  foreclose  should  show  it  has  accrued,  1471. 
ADJOURNMENT  of  sale  under  decree  of  court,  1634. 

discretionary  power  of  officer  as  to,  1634. 

sale  may  be  kept  open  when,  1635. 

of  sale  under  power,  1873-1875. 

mortgagee  may  exercise  discretion,  1873. 

whether  notice  of  required,  1874. 
ADMINISTRATOR.     (See  Executor.) 
ADVERSE  CLAIMANTS  canuot  be  made  parties  to  foreclosure  suit, 

1440,  1445,  1474,  1589. 
ADVERSE  POSSESSION.     (See  Possession.) 
ADVERTISEMENT,  foreclosure  by.     (See  Power  of  Sale.) 

in  Maine,  1240. 

in  New  Hampshire,  1241. 
AFFIDAVIT  of  sale  under  power,  1904,  1905. 

omission  of  does  not  invalidate  title,  1904. 

what  required  to  make  it  presumptive  evidence,  1905. 
AFTER-ACQUIRED  PROPERTY,  when  subject  to  mortgage,  152. 

rule  as  to,  153. 

of  railroad  companies,  154,  156. 

of  corporation,  whether  incident  to  the  franchise,  155. 

when  mortgage  passes  without  particular  mention,  157. 

mortgage  of  attaches  sul)ject  to  existing  liens,  158. 

as  affected  by  registration,  561. 
AFTER-ACQUIRED  TITLE,   of  mortgagor  enures   to   mortgagee, 
679,  825. 

by  tax  sale,  680. 

not  a  defence  in  foreclosure  suit,  1305. 

when  decree  of  sale  covers,  1581,  1656. 
AGENT.     (See  ArTojiNKV.) 

notice  to  affects  principal,  584. 

notice  to  director  of  corporation,  590. 

when  fraud  of  avoids  mortgage,  612. 

723 


INDKX. 
Rererence  is  to  Sections. 

AGENT  —  eoiitiiiiifd. 

taking  ooimnission  from  mortjragor  wlictlior  usury,  642. 

authority  of  to  receive  payment  may  be  inferred  from  possession 
of  securities,  UG4. 
AGREEMENT  to  give  a  mortgage  is  in  equity  a  mortgage,  163. 
need  not  be  in  writing,  1G4. 
by  corporation  entered  on  its  records,  165. 

affecting  a  mortgage  should  be  recorded,  478. 

fixing  priority  of  mortgages,  608. 

to  pay  taxes  on  mortgage  debt  not  usury,  636. 

of  grantor  to  discharge  a  mortgage,  766. 
AGREEMENT  TO  RECONVEY,  in  connection  with  deed,  is  a  mort- 
gage when,  241-281. 
ALABAMA,  nature  of  a  mortgage  in,  18. 

power  of  a  married  woman  to  mortgage,  117. 

vendor's  lien  adopted,  191. 

vendor's  lien  assignable,  212. 

parol  evidence  to  prove  a  mortgage,  286. 

provisions  respecting  registration,  481. 

provisions  respecting  mechanics'  liens,  481. 

usury,  law  of,  633. 

assignment  of  debt  without  mortgage  in,  817. 

provisions  for  entering  satisfaction  of  record,  992. 

redemption  after  foreclosure,  1051,  1322. 

statute  of  limitations,  ten  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1322. 

strict  foreclosure  in,  1541.    • 

power  of  sale  mortgages  and  trust  deeds  in,  1723. 
ALIENS  may  hold  mortgages,  132. 
ALTERATIONS  of  mortgage,  what  are  material,  94. 

which  do  not  change  legal  effect,  95. 

verbal  after  execution,  96. 
ANGLO-SAXONS,  mortgages  used  by,  1,  2. 
ANNUAL   RESTS,  in  stating  mortgagee's  account,  1139,  1140. 
ANSWER  in  foreclosure  suit,  1479-1515. 

APPROPRIATION  OF  PAYMENT.     (See  Payment,  904-912.) 
ARIZONA  TERRITORY,  provisions  respecting  registration  in,  481  a. 

provisions  respecting  mechanic's  liens,  481  a. 

provisions  for  entering  discharge  of  record,  992  a. 

statutory  provisions  relating  to  foreclosure,  1322  a. 

usury  laws  in,  633. 

compound  interest  allowed  in,  650. 
724 


INDEX. 

Reference  is  to  Sections. 

ARKANSAS,  nature  of  a  mortgage  in,  19. 
written  authority  for  filling  blanks,  90. 
vendor's  lien  adopted,  191. 

not  assignable,  212. 
parol  evidence  to  prove  a  mortgage,  287. 
provisions  respecting  registration  in,  482. 
provisions  respecting  mechanics'  liens,  482. 
usury  laws  in,  633. 
compound  interest  in,  650. 
entering  discharge  of  record,  992. 
no  redemption  after  foreclosure,  1051,  1323. 
statute  of  limitations,  five  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1323. 
power  of  sale  mortgages  and  trust  deeds  in,  1724. 
ASSIGNEE  of  bankrupt  mortgagor  has  only  the  rights  of  the  mort- 
gagor, 468. 
ASSIGNEE  OF  MORTGAGE  is  a  purchaser,  475. 
priority  between  different  assignees,  476. 
should  notify  owner  of  estate  of  his  rights,  791. 
stands  in  place  of  assignor  in  respect  to  accounting,  1119. 
party  to  foreclosure  suit,  1371-1373. 
holding  as  collateral  security  may  foreclose,  1374-1375. 
of  mortgage  without  note  cannot  foreclose,  1376. 
of  note  may  foreclose,  1377. 

of  note  of  junior  mortgage,  party  defendant  to  foreclosure  suit,  1427, 
title  of  must  be  shown  on  foreclosure,  1457. 
defences  against,  in  foreclosure  suit,  1485. 
need  not  have  paid  value,  1486. 
when  he  takes  free  from  equities,  1487. 
equitable  cannot  execute  power,  1789. 
ASSIGNMENT  of  rents  and  profits,  an  equitable  mortgage,  171. 

of  contract  of  purchase,  an  equitable  mortgage,  172,  173,  174. 

of  certificate  of  public  lands,  176. 
ASSIGNMENT  OF  MORTGAGE,  with  agreement  to  reassign,  280. 

absolutely  as  collateral  security,  333. 

of  contract  of  purchase  as  security,  334. 

recording  acts  apply  to,  472. 

consequences  of  omitting  record  of,  474. 

record  of  not  notice  to  mortgagor,  473. 

assignee  is  a  purchaser  within  recording  acts,  475. 

delivery  of  note  essential  to,  476. 

manner  of  recording,  477. 

725 


INDEX. 

Reference  is  to  Sections. 

ASSIGNMENT  OF  MORTGAGE  —  continued. 
cftcct  of  recording,  5G6. 
a  formal  assignment,  786. 
legal  title  transferred  by  deed  only,  787. 
consideration  of,  788. 

possession  of  mortgagor  does  not  prevail,  789, 
delivery  is  essential  to.  790. 

whether  it  may  be  compelled  on  payment,  792,  1064. 
when  it  may  be  compelled  in  equity,  793. 
Who  may  make,  794-803. 

a  joint  mortgagee,  794. 
one  of  several  trustees  cannot,  795. 
one  of  several  executors  may,  796. 
foreign  executor  cannot,  797. 
whether  officer  of  corporation  may,  796. 
by  unincorporated  association,  799. 
by  partnership,  800. 
by  attorney,  801. 

when  a  mortgage  of  indemnity  is  subject  to,  802. 
of  mortgage  conditioned  to  support,  803. 
What  constitutes,  804-812. 

of  mortgage  without  the  debt,  804. 
of  mortgage  generally  carries  the  debt,  805. 
delivery  of  mortgage  without  note  is  not,  806. 
assignment  of  mortgage  and  delivery  of  note  is,  807. 
deed  of  release  or  quitclaim  is,  808. 
deed  of  heir  before  settlement  of  estate,  809. 
deed  by  mortgagee  constitutes,  810. 
deed  by  mortgagee  of  part  of  the  estate  is,  811. 
an  ineffectual  foreclosure  operates  as,  812,  1678. 
Equitable,  813-822. 

what  constitutes,  813. 

mortgagee  cannot  discharge  after,  814. 

of  bond  for  a  deed,  815. 

by  power  of  attorney,  816. 

of  debt  without  mortgage,  817. 

does  not  carry  legal  estate,  817. 
legal  interest  of  mortgagee,  818. 
mortgagee  holds  legal  estate  in  trust,  819. 
effectual  as  to  whom,  820. 
assignment  of  part  of  debt,  821. 
when  assignee  of  one  note  has  priority,  822. 
726 


INDEX. 
Reference  is  to  Sections. 

ASSIGNMENT  OF  MORTGAGE  — continued. 
Construction  and  effect  of  assignment,  823-833. 

law  of  place,  823. 

passes  nothing  beyond  the  mortgage  title,  824. 

passes  after-acquired  title  when,  825. 

carries  power  of  sale,  826. 

as  collateral  security,  827. 

induced  by  fraudulent  representations,  828. 

made  in  fraud  of  creditors,  828. 

passes  all  the  securities,  829. 

whether  it  carries  a  separate  contract  of  guaranty,  830. 

covenant  that  assignor  will  not  collect,  831. 

usury  in,  832. 

cancellation  of,  833. 
Whether  subject  to  equities,  834-847,  1507. 

of  negotiable  note  before  due  free  from  equities,  834,  1487. 

although  consideration  of  mortgage  void,  835. 

when  made  subject  to  rights  of  mortgagor,  836. 

when  note  indorsed  and  mortgage  delivered,  837. 

doctrine  that  assignee  takes  subject  to  equities,  838. 

ground  of  this  doctrine,  839. 

doctrine  of  United  States  Supreme  Court,  840. 

when  note  is  overdue,  841. 

of  bond  is  subject  to  equities,  842. 

whether  rule  limited  to  equities  between  original  parties,  843, 

equities  in  favor  of  third  persons,  844. 

doctrine  approved  in  New  York,  845. 

no  parol  trust  can  attach,  846. 

equities  arising  after  assignment,  847. 

of  mortgage  to  one  co-tenant  no  merger,  849. 

to  wife  of  mortgagor  no  merger,  850. 

when  it  operates  as  a  discharge,  801,  804. 

to  one  who  has  assumed  the  mortgage,  865. 
cannot  be  compelled  upon  payment,  1086. 

doctrine  f)lherwise  in  New  York,  1087. 
after  entry  does  not  stay  foreclosure,  126G. 
writ  of  entry  after  assignment  as  collateral,  1282. 
pending  foreclosure  suit,  1488. 

amount  of  decree  after  assignment  as  collateral,  1;)92. 
whether  priority  of  assignment  gives  priority,  1701. 
when  legal,  passes  power  of  sale,  1787. 

727 


INDEX. 

Reference  Is  to  Sections. 

ASSIGNMENT  OF  MORTGAGE  —  confinued. 
equitable,  does  not  pass  the  power,  178!). 
after  advertisement  under  power  of  sale,  1832. 
invalid  sale  under  power  operates  as,  11(02. 
ASSUMPTION  OF  3I0RTGAGE,  by  married  woman,  116,  753. 
by  purchaser  of  equity  of  redemption,  740-770. 
n)ort<j;a<j[or  becomes  surety  for  purchaser,  741. 
of  proportionate  i)art  of  mortgage,  743. 
agreement  to  pay  mortgage,  749. 
verbal  promise  to  assume,  750. 
grantee  bound  by  accepting  deed,  752. 
married  woman  bound  on  her  covenant  to  assume,  753. 
ground  on  which  mortgagee  may  take  advantage  of,  755. 
junior  mortgagee  not  liable  on  agreement  for,  756. 
in  absolute  deed  which  is  in  fact  a  mortgage,  757. 
ground  on  which  mortgagee  may  have  benefit  of,  758,  759. 

that  it  is  a  promise  for  his  benefit,  758. 

grantor  need  not  be  liable  for  debt,  760. 

promise  must  be  express,  761. 

doctrine,  New  York  and  other  states,  762. 
whether  grantor  can  release  the  purchaser,  763. 
when  grantor  may  release  the  purchaser,  763. 
condition  to  pay  or  assume,  765. 
remedy  of  grantor  an  agreement  of,  768. 
when  agreement  may  be  enforced,  769. 
measure  of  damages  for  breach  of  agreement,  770. 
ATTxVCIOIENT  of  equity  of  redemption  may  be  enforced  upon  sur- 
plus, 665. 
none  of  mortgagee's  interest,  701. 
ATTORNEY  must  execute  deed  in  name  of  principal,  130. 
fees  of,  secured  by  mortgage,  359,  1606. 
acknowledgmeTit  by,  533. 
delivery  to,  539. 
notice  to  affects  principal  when,  584. 

on  what  principle  the  doctrine  rests,  585. 

must  be  in  the  same  transaction,  586. 

must  be  of  matter  material  to  the  transaction,  586. 

when  same  attorney  is  employed  by  both  parties,  588. 

when  agent  himself  is  a  party,  589. 
provision  for  payment  of  fees  for  foreclosure  not  usurious,  635. 
assignment  of  mortgage  by,  801. 
728 


INDEX. 
Reference  is  to  Sections. 

ATTORNEY  —  continued. 

authority  of  to  receive  payment,  964. 

mortgagee  allowed  fees  paid  for  collecting  rents,  1138. 

BANKRUPTCY  does  not  affect  vendor's  lien,  202. 

assignee  in,  has  only  debtor's  rights  as  regards  unrecorded  mort- 
gages, 468. 

mortgagee  may  prove  claim  in  or  not,  729. 

effect  of  upon  redemption  by  debtor,  1073. 

discharge  does  not  prevent  foreclosure  suit,  1231. 

in  what  court  lien  may  be  enforced,  1232. 

suit  in  state  court  not  suspended,  1233. 

when  bankruptcy  proceedings  are  in  another  state,  1234. 

court  may  order  sale  subject  to  mortgage,  1235. 

how  mortgagee  may  prove  his  claim  in,  1236. 

assignee  in,  should  be  made  party  to  foreclosure  suit,  1438. 

sale  without  leave  of  court  in,  1908. 

surplus  proceeds  of  sale  under  power  belong  to  assignee,  1932. 
BANKS,  national,  prohibited  loaning  on  mortgages,  134. 

remedy  for  violation  of  this  prohibition,  134. 
BEQUEST  of  mortgage,  700. 

BILL  OF  INTERPLEADER,  answer  to  foreclosure  suit  by,  1515. 
BLANKS  IN  MORTGAGE,  authority  to  fill,  90,  91. 
BOND  subject  to  equities  in  hands  of  assignee,  842. 
BONUS  paid  for  extension  of  mortgage,  647,  648. 

application  of,  912. 
BUILDING,  mortgage  of,  as  part  of  the  realty,  142. 

removal  of  from  mortgaged  land,  143. 

floated  off  the  mortgaged  land,  144. 

on  leased  land,  mortgage  of,  146. 

on  mortgaged  land  a  fixture,  433. 
BURDEN  OF  PROOF  that  a  mortgage  is  usurious,  643. 

CALIFORNIA,  nature  of  u  mortgage  in,  20. 
form  of  mortgage,  6L 
written  authority  for  filling  blanks,  90. 
vendor's  lien  adopted,  191. 

not  assignable,  212. 
vendee's  lien  in,  223. 
parol  evidence  to  show  a  mortgage,  288. 
record  of  assignment  not  notice  to  morigagor,  473. 
provisions  respecting  registration  in,  'IM. 

729 


INDEX. 

Reference  is  to  Seclions. 

CALIFORNIA  —  cfliifinuril. 

provisions  respecting  incclmnics'  liens  in,  483. 
usury  law  in,  683. 
compound  interest  allowed  in,  GoO. 
assignment  of  debt  without  mortgage  in,  817. 
entering  satisfaction  of  record,  994. 
redemption  after  foreclosure,  1051,  1324. 
when  ri^ht  to  redeem  barred  in,  1145, 
statute  of  limitations,  four  years,  1193. 
mortgage  barred  when  debt  is  barred,  1207. 
statutory  provisions  relating  to  foreclosure,  1324. 
strict  foreclosure  in,  1543, 

power  of  sale  mortgages  and  trust  deeds  in,  1725. 
CERTIFICATE  of  purchase  by  officer  making  foreclosure  sale,  mis- 
take in,  1051. 
of  witnesses  to  entry  for  foreclosure,  1259,  1260. 
of  mortgagor  to  entry  for  foreclosure,  1261. 
record  of,  1263. 
CESTUI  QUE  TRUST,  suit  of  foreclosure  by,  1384. 

when  should  be  made  parties  to  suit  by  trustee,  1397-1399. 
CHANGES  IN  FORM  OF  DEBT.     (See  Payment,  924-942.) 
COLORADO,  nature  of  a  mortgage  in,  21. 
vendor's  lien  adopted,  194. 
provisions  respecting  registration  in,  484. 
provisions  respecting  mechanics'  liens  in,  484. 
usury  law  in,  633. 
entering  discharge  of  record,  995. 
redemption  after  foreclosure,  1051,  1325. 
statute  of  limitations,  six  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1325. 
power  of  sale  mortgages  and  trust  deeds  in,  1726. 
COMPENSATION  of  mortgagee  in  possession,  1132,  1133. 
COMPOUND  INTEREST.     (See  Interest.) 
COMPUTATION  of  interest,  G55. 

CONDEMNATION  of  land  for  street,  effect  upon  mortgage,  708. 
CONDITION,  in  mortgage,  4, 
form  of,  69,  242. 
must  give  reasonable  notice,  70. 
illegal,  249. 

strict  performance  of  revests  title,  887. 
upon  what  breach  the  right  to  foreclose  accrues,  1174-1191. 
of  promptness  of  payment,  1179. 
730 


INDEX. 
Reference  is  to  Sections. 

CONDITION  —  continued. 

default  at  election  of  mortgagee,  1182. 

provisions  against  forfeiture,  1184. 

court  will  not  relieve  against  forfeiture,  1185. 

waiver  of  default  of  credit,  1186. 

to  pay  or  save  harmless,  1188. 
CONDITIONAL   SALE  distinguished  from  a  mortgage,  256-281. 

in  equity  the  tendency  is  to  make  the  transaction  a  mortgage, 
257. 

intention  is  the  criterion,  258. 

in  doubtful  cases  the  transaction  is  regarded  as  a  mortgage,  258, 
279. 

will  be  upheld  when  clearly  intended,  259. 

the  evidence  should  be  clear,  260. 

the  intent  may  appear  by  the  instrument,  261. 

the  purchaser's  rights  are  to  be  regarded,  262. 

character  of  the  transaction  fixed  at  its  inception,  263. 

the  existence  of  a  debt  the  test,  265. 

where  the  contract  is  made  upon  an  application  for  a  loan,  266. 

when  an  existing  debt  is  not  cancelled,  267. 

purchase  for  benefit  of  another,  268. 

a  continuing  debt  shows  a  mortgage,  269. 

agreement  that  grantee  may  buy,  270. 

agreement  that  grantee  may  sell,  271. 

when  there  is  no  obligation  for  the  payment  of  any  debt,  272. 

payment  of  interest,  273. 

continued  possession  of  grantor,  274. 

inadequacy  of  price,  275. 

recording  as  a  mortgage,  276. 

intention  may  be  shown  by  parol  evidence,  277. 

slight  circumstances  determine,  278. 

assignment  with  agreement  to  reassign,  280. 
CONFIRMATION  OF   SALE.      (See   Fokeclosure   Sale,    1637- 

1641,  1670.) 
CONFLICT  OF  LAWS  as  to  usury,  656-663. 
CONNECTICUT,  nature  of  a  mortgage  in,  22. 

vendor's  lien  not  adopted,  191. 

parol  evidence  to  show  a  mortgage,  289. 

statutory  provisions  as  to  fixtures,  443. 

provisions  respecting  registration  in,  485. 

provisions  respecting  mechanics'  liens  in,  485. 

usury  in,  633. 

731 


INDEX. 
ReCeicnce  is  to  Sections. 

CONNECTICUT  —  coniiniwd. 

entering  dischiirge  of  record,  996. 
rodeinption  after  foreclosure,  1051,  1326, 
statute  of  limitations,  fifteen  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1326. 
strict  foreclosure,  the  usual  form  in,  1544. 
power  of  sale  mortgages  and  trust  deeds  in,  1727. 
CONSIDERATION,  description  of  in  mortgage,  64. 
mortgage  made  without,  to  raise  money,  86. 
mortgage  without  placed  in  escrow,  87. 
defence  of  want  or  failure  of,  610-616. 
none  need  pass  at  time  of  execution,  611. 
implied  from  seal,  613. 
of  accon)modation  mortgage,  615. 
when  mortgagor  estopped  to  deny,  616. 
illegal,  avoids  mortgage,  617. 

who  may  take  advantage  of,  619. 
when  it  can  be  separated,  620. 
burden  of  proof  of,  622. 
want  of  in  mortgage  assumed  no  defence,  744. 
of  assignments,  788. 
proof  of,  in  foreclosure  suit,  1470. 
want  of  a  defence  in  foreclosure  suit,  1297, 1490. 
one  buying  subject  to  mortgage  cannot  set  up  want  of,  1491. 
CONSOLIDATING  MORTGAGES,  the  English  doctrine,  1083. 
not  applied  in  America,  1083. 

redemption  of  other  claims  cannot  be  compelled,  1081. 
CONSTRUCTION,  note  and  mortgage  construed  together,  71. 

principles  of,  101 
CONTRIBUTION  TO  REDEEM,  1089-1092. 
when  the  right  arises,  1089. 
the  general  rule  respecting,  1090. 
portion  retained  by  mortgagor  first  liable,  1091. 
portions  sold  liable  in  inverse  order,  1092. 
according  to  value  is  rule  where,  1626. 
valuation  to  be  made  of  what  time,  1627. 
sale  not  enjoined  to  allow,  1812. 
CORPORATION,  designation  in  mortgage  to,  63. 
habendum  in  mortgage  to,  67. 
may  make  a  mortgage,  102,  124. 
power  of  alienation  restrained,  124. 
limitation  of  railroad  companies  to  mortgage,  125. 
732 


INDEX. 
Reference  is  to  Sections. 

CORPORATION  —  continued. 

religious,  may  mortgage,  126. 

the  power  to  mortgage  resides  in  the  stockholders,  127. 
must  use  corporate  seal,  128. 
may  take  mortgages,  134. 

natioual  banks  restricted  as  to  real  estate  security,  134. 
not  bound  by  notice  to  director  of,  590. 
authority  of  treasurer  of  to  assign,  798. 
assignment  by  unincorporated  associations,  799. 
COSTS,  incurred  by  refusal  of  sufficient  tender,  902. 
of  previous  foreclosure  upon  redemption,  1084. 
rule  respecting  in  bill  to  redeem,  886, 1111. 

of  suit  brought  without  previous  tender,  1112. 
when  mortgagee  has  refused  tender,  1113. 
on  decree  of  strict  foreclosure,  1568. 
of  previous  action  at  law  included  in  decree,  1598. 
In  equitable  suit  for  foreclosure,  1602-1607. 
discretionary  with  court,  1603. 
of  subsequent  incumbrancers,  1604. 
of  defendants  who  appear  and  answer,  1605. 
counsel  fees,  1606. 
stipulation  for  in  mortgage,  1606. 
of  irregular  attempt  to  foreclose,  1607. 
of  subsequent  mortgagees,  1908. 
of  sale  under  power,  1923-1926. 
COUNSEL  FEES.     (See  Attorney.) 
COUPONS  for  interest  653. 

draw  interest  after  maturity,  1141. 
COVENANT,  in  mortgage,  68,  1225. 
importance  of,  68. 
for  payment  of  the  debt,  72,  1225. 
for  payment  of  taxes,  77. 
of  mortgagor  to  pay  debt,  none  implied,  678. 
implied  in  assignment,  M31. 
in  purchase  money  mortgages,  1501-1505. 
CREDIT,  foreclosure  sale  on,  1615. 

on  sale  under  power,  1868-1872. 
CROPS,  growing,  may  be  mortgaged,  150. 
not  sown,  how  mortgaged,  151. 
registry  laws  apply  to  mortgage  of,  479. 
mortgagee  entering  may  appropriate,  1116. 
purcliaser  at  foreclosure  sale  entitled  to,  1658. 

733 


INDEX. 
Reference  is  to  Sections. 

DAKOTA  TKKUITORY,  n:itiire  of  a  mortgage  in,  23. 

form  of  mortgage,  tU. 

parol  evidence  to  show  a  mortgage,  290. 

provisions  rcspi-cting  registration  in,  486. 

provisions  respecting  meclianics'  liens  in,  486. 

usury  in,  633. 

entering  discharge  of  record,  997. 

statnte  of  limitations,  twenty  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1327. 

power  of  sale  mortgages  and  trust  deeds  in,  1728. 
DAMAGES  for  mortgaged  land  taken  in  the  exercise  of  the  right  of 
eminent  domain,  681,  708. 

measure  of  for  breach  of  agreement  to  pay  a  mortgage,  770. 
DATE  not  essential,  89. 
DEBT,  secured,  description  of,  70,  343-395. 

requisites  of  description,  70. 

note  and  mortgage  construed  together,  71. 

covenants  to  pay,  72,  1225. 

time  of  payment  of,  75. 

provision  that  whole  shall  become  due  on  any  default,  76, 
on  default  in  payment  of  taxes,  77. 
on  default  in  payment  of  insurance  premium,  78 

general  description  sufficient,  343. 

amount  of  ascertained  debt  should  be  stated,  344. 

must  come  fairly  within  terms  used,  345. 

unliquidated,  346. 

antecedent,  347. 

when  mortgage  is  larger  than,  348. 

description  of  note,  349. 

not  necessary  to  give  all  particulars  of,  350. 

notes  are  evidence  of  amount  of,  351. 

parol  evidence  to  identify  note,  352. 

mistakes  in  description  of,  354. 

several  mortgages  securing  one  debt,  356. 

enlarging  terms  of  mortgage,  357. 

taxes  and  assessments,  358. 

solicitor's  fee,  359. 

tacking  other  debts,  360. 

increasing  rate  of  interest,  361. 

a  further  debt  secured,  363. 

future  advances,  364-378. 

indemnity,  379-388. 
734 


INDEX. 

Reference  is  to  Sections. 
DEBT  —  continued. 

recital  of  in  mortgage,  677. 
no  covenant  of  implied,  678. 

remedy  for  debt  and  upon  lien  concurrent,  1215-1220. 
foreclosure  suit  no  bar  to  suit  for  debt,  1222,  1223. 
personal  remedy  excluded  wben,  1226. 
personal  remedy  after  foreclosure,  1227. 
description  of,  nuist  be  set  out  in  bill  to  foreclose,  1466. 
DECREE  in  suit  to  redeem,  1106. 

should  fix  time  for  redemption,  1107. 

failure  to  pay  works  foreclosure,  1108. 
in  suit  for  strict  foreclosure,  1561,  1569,  1572. 
Of  sale,  1571-1607. 

by  court  of  equity  without  the  aid  of  statute,  1 573. 
Form  and  requisites  of,  1574—1586. 

may  follow  terms  of  mortgage,  1575. 

should  provide  order  of  sale,  1576. 

where  only  part  of  debt  is  due,  1577. 

of  sale  subject  to  part  of  debt  not  due,  1577. 

for  only  the  relief  sought  for,  1578. 

should  protect  other  interests,  1579. 

when  junior  mortgagee  forecloses,  1580. 

after-acquired  title  when  covered,  1581. 

debt  not  apportioned  between  co-tenants,  1582. 

where  there  are  two  mortgages,  1583. 

death  of  mortgagor  as  affecting,  1584. 

death  of  plaintiff  as  affecting,  1585. 

no  time  for  redemption  allowed,  1586. 
Conclusive7iess  of,  1587-1589. 

cannot  be  attacked  collaterally,  1587. 

while  unreversed,  1588. 

prior  and  adverse  rights  not  affected,  1589. 
Amount  of  1590-1601. 

should  be  fixed,  1590. 

when  part  not  due,  1591. 

when  mortgage  held  as  collateral,  1592. 

may  exceed  penalty  of  bond,  1593. 

interest,  1594. 

exchange,  1595. 

insurance,  1596. 

taxes,  1597. 

costs  of  previous  action  to  foreclose,  1598. 

735 


INDEX. 
Reference  is  to  Sections. 

DECREE  —  continued 

disbursements  by  plaiiitill",  1599. 
iinal,  when,  1600. 

no  stay  of  on  account  of  controversy  between  subsequent  in- 
cumbrancers, IGOl. 
costs,  1G02-1G07. 
DEED,  and  passing  of  title  under  foreclosure  sale,  1652. 
delivery  of  deed,  lG5o. 

title  relates  back  to  execution  of  mortgage,  1654. 
errors  in  deed,  1 655. 
certificate  of  purchase,  1661. 
Under  fower  of  sale,  1889-1903. 

holder  of  legal  title  should  make  deed,  1889. 
married  woman  may  make  deed,  1890. 
mortgagee  may  make  deed  to  himself,  1892. 
title  passes  by  delivery  of,  1894. 
not  evidence  of  recitals  in  it,  1895. 
DEED  OF  TRUST,  legal  effect  of,  62. 

omission  of  words  of  in)portance  in,  67. 

to  secure  all  creditors  of  the  grantor,  how  enforced,  1448. 

is  a  mortgage  in  legal  effect,  1769. 

often  preferred  to  mortgage,  1770. 

trustee  is  agent  of  both  parties,  1771. 

debt  belongs  to  beneficiary,  1772. 

when  Court  will  appoint  new  trustee,  1774. 

when  court  executes  the  power,  tiie  sale  is  by  virtue  of  that,  not 

of  the  decree,  1775. 
when  debt  is  unliquidated,  1776. 
acceptance  of  trust,  1780. 
cannot  be  assigned  without  authority,  1788. 
to  two  or  more  must  be  executed  by  all,  1790. 
insolvency  of  trustee  no  ground  for  enjoining,  1816. 
trustee  should  be  personally  present  at  sale,  1862. 
trustee  buying  at  sale  under  power,  1880. 
sale  under  must  be  fairly  executed,  1906. 
DEFAULT,  meaning  of  term,  1191. 
DEFEASANCE,  form  of,  69,  242. 
separate  instrument  of,  241. 
must  be  to  grantor,  not  to  a  third  person,  241. 
separate,  objections  to,  243. 

and  deed  constitute  a  mortgage,  244. 
when  part  of  one  transaction,  245. 
736 


INDEX. 
Reference  is  to  Sections. 

DEFEASANCE  —  continued. 

when  delivered  at  same  time,  246. 
delivered  as  an  escrow,  247. 
parol  evidence  to  connect  with  deed,  248. 
illegal  condition,  249. 

when  once  established  gives  right  of  redemption,  250. 
grantee  cannot  renounce  redemption  beforehand,  251. 
cancellation  of,  252. 
substitution  of  new  defeasance,  252. 
recording  of,  253,  548. 

when  not  recorded  grantee  may  convey  good  title,  549. 
surrender  of,  928,  977. 
DEFECT  in  title  excuses  purchaser  when,  1645,  1646. 
DEFENCES,  to  bill  to  redeem,  1105. 

to  writ  of  entry  to  foreclose,  1296-1305. 
to  bill  in  equity  for  foreclosure,  1479-1515. 
DEFICIENCY  after  foreclosure,  liability  of  married  woman  for,  111. 
suit  at  law  for,  after  sale  under  power,  1227. 
suit  at  law  for,  after  foreclosure  sale,  1228. 
personal  judgment  for,  must  be  asked  for,  1477. 
judgment  for,  in  equitable  suit,  1709-1721. 
statutory  provisions  in  several  states,  1709. 
third  persons  liable  may  be  joined,  1710. 
court  of  equity  cannot  generally  give  judgment  without  aid  of 

statute,  1711. 
one  who  has  bought  subject  to  the  debt  not  liable  for,  1712. 
when  purchaser  is  bound  to  pay  the  debt,  1713. 
though  conveyance  be  merely  for  security,  1714. 
when  there  is  no  bond  or  note,  1715. 
no  judgment  for  parts  of  debt  not  due,  1719- 
when  judgment  for  becomes  a  lien,  1720. 
personal  remedy  may  be  enforced  without  foreclosure,  1721. 
DELAWAKK,  nature  of  a  mortgage  in,  24. 

provisions  respecting  registration  in,  487. 
provisions  respecting  mechanics'  liens  in,  487. 
usury  in,  G.'j3. 

entering  satisfaction  of  record,  998. 
no  redemption  after  foreclosure,  1051,  1328. 
statute  of  limitations,  twenty  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1328. 
power  of  sale  mortgages  and  trust  deeds  in,  1729. 
DKLIN'EKY  of  mortgage  essential,  84,  85,  539. 

VOL.  II.  47  73J 


INDEX. 
Referencb  is  to  Sections. 

DELIVERY  —  continued. 

t)f  mortoarjc  iiindo  for  purpose  of  sale,  86. 

in  escrow,  87. 

registration  docs  not  operate  as,  539. 

to  an  agent,  aJJO. 

after  recording,  540, 

to  a  stranger,  5 10. 

presumption  as  to,  540. 

subsequent,  when  becomes  operative,  541. 

essential  to  assignment,  790. 
DEPOSIT  of  money  required  on  foreclosure  sale,  1614. 

forfeiture  of,  1644. 

at  sale  under  power,  1866. 
DEPOSIT  OF  TITLE  DEEDS,  an  equitable  mortgage,  179-li 
DESCRIPTION,  of  tlie  parties,  63. 

of  the  debt.     (See  Debt.) 
Of  the  premises,  what  is  requisite,  65,  528. 
uncertainty  in,  66. 
apparent  error  in,  529. 
must  be  set  out  in  bill  to  foreclose,  1462. 
of  property  in  notice  of  sale,  1840. 
DESTRUC HON  of  record  of  mortgage,  559. 
DEVISEE  should  redeem  when,  10 G2. 

necessary  party  defendant  to  foreclosure  suit,  1418. 
DISABILITIES  of  insanity,  infancy,  &c.,  103-105. 

none  to  prevent  the  taking  of  a  mortgage,  131. 
DISBURSEMENTS  by  mortgagee  in  possession,  1134-1138. 

by  plaintiff  in  foreclosure  proceedings,  1599. 
DISCHARGE,  mortgagee  cannot  make  after  assignment,  814. 

operates  as  an  assignment  when,  858. 

when  payment  operates  as,  888,  889. 

who  may  make,  956-965. 

owner  of  debt  should  make,  956. 

when  made  by  person  other  than  mortgagee,  957. 

when  mortgage  is  held  by  two  or  more  jointly,  958. 

one  of  two  executors  may  make,  959. 

one  of  two  trustees  cannot  make,  959. 

whether  foreign  executor  can  make,  960. 

assignee  may  make,  961. 

assignee  holding  as  collateral  may  make,  963. 

obtained  through  fraud  or  made  by  mistake,  966. 

fraudulent,  is  not  payment,  967. 
738 


INDEX. 

Reference  is  to  Sections. 
DISCHARGE  —  continued. 

personal  judgment  when  mortgage  cannot  be  reinstated,  968. 
when  made  through  mistake  of  fact  may  be  cancelled,  969. 
when  assignment  was  intended,  970. 

when  new  mortgage  is  substituted  in  ignorance  of  an  intervening 
lien,  971. 
Form  and  construction  of  discharge,  972-988. 
mode  of  effecting,  972. 
deed  of  release  or  quitclaim,  972. 
after  payment,  mortgagee  trustee  of  legal  title,  973, 
where  mortgage  is  regarded  as  a  mere  lien,  974. 
in  case  of  a  mortgage  of  indemnity,  975. 
whether  a  general  release  discharges  mortgage,  976. 
by  foreclosure  of  prior  mortgage,  978. 
verbal  agreement  to  release,  979. 
may  be  limited  in  its  operation,  980. 
of  a  portion  of  the  mortgaged  premises,  981. 
effect  of  release  of  personal  liability  of  mortgagor,  983. 
release  of  security  does  not  necessarily  release  debt,  984. 
effect  of  upon  title  of  person  to  whom  it  is  made,  985. 
through  representations  or  conduct  of  mortgagee,  986. 
wrongfully  obtained,  987. 
debtor  should  tender  the  instrument,  988. 
Entry  of  record,  989-991. 

penalty  for  neglecting  to  make,  990. 
when  holder  of  mortgage  liable  to  penalty,  991. 
Statutory  provisions  for  entering  of  record  in  the  several  states,  992- 
1037. 
defence  of,  must  be  clearly  set  up,  1512. 
DISTKICT  OF  COLUMBIA,  provisions  respecting  registration  in,  488. 
provisions  respecting  mechanics'  liens  in,  488. 
usury  in,  633. 

entering  satisfaction  of  record,  999. 
statutory  provisions  relating  to  foreclosure,  1329. 
power  of  sale  mortgages  and  trust  deeds  in,  1730. 
DOWEU,  fraudulent  release  of  after  execution,  95. 
purchase  money  mortgage  not  subject  tq,  464. 
mortgagor's  widow  entitled  to,  666. 
principle  of  merger  as  applied  to,  866,  867. 
gives  right  to  redeem  mortgage!,  1067. 
in  surplus  proceeds  of  foreclosure  sale,  1693,  1694. 
in  sur])lus  proceeds  of  sale  under  power,  1933. 

739 


INDEX. 
Reference  is  to  Sections. 

DURESS  avoids  mortgnge  obtained  by,  020. 

in  obtaining  wife's  acknowledgment  to  deed,  538. 

EAKNINGS  of  railroad  may  be  mortgaged,  100. 

KJKCTiNIENT,  mortgagor  cannot  maintain  against  mortgagee,  074. 

mortgagee  may  recover  possession  by,  719. 
ELECTION  of  mortgagee  to  consider  mortgage  due,  1182. 
EMBLEMENTS,  mortgagor's  riglit  to  until  possession  taken,  097. 
ceases  wben  be  surrenders  possession,  097. 
mortgagee  may  waive  right  to,  098. 

mortoagor's  tenant  has  no  right  to  against  mortgagee,  780. 
purchaser  under  foreclosure  sale  entitled  to,  1058. 
ENFORCEMENT  of  mortgage,  when  right  of  accrues,  1174-1191. 
remedies  for,  1215-1230. 

of  foreclosure  sale  against  purchaser,  1042-1051. 
ENTRY  to  foreclose  mortgage,  1240-1257. 
ENTRY  AND  POSSESSION.     (See  Foreclosure  by.) 
EQUITABLE  ASSIGNMENT  of  mortgage,  813-822. 
EQUITABLE  MORTGAGE,  various  kinds  of,  102-188. 
by  agreement  to  give  a  mortgage,  103. 
by  parol  agreement,  104. 

by  entry  of  agreement  on  records  of  company,  105. 
by  informal  deeds,  100,  108. 
by  deed  defectively  executed,  1 09. 
by  implied  trust,  170. 
by  an  assignment  of  rents,  171. 
by  assignment  of  contract  of  sale,  172,  173. 
although  conditional,  174. 
or  a  partial  interest,  175. 
by  assignment  of  certificate  of  public  land,  170. 
by  preemptor  of  public  land,  177. 
by  deposit  of  title  deeds,  179. 
how  enforced,  188. 
within  the  recording  acts,  469. 
for  precedent  debt,  470. 
EQUITY  OF  REDEMPTION,  growth  of  the  doctrine  of,  0. 
an  estate  in  the  land,  6. 
when  first  established,  7. 
what  it  is,  8. 
ESCROAV^  delivery  in,  87. 

ESTATE  TAIL,  may  be  the  subject  of  a  mortgage,  137. 
740 


INDEX. 
Reference  is  to  Sections. 
ESTOPPEL  of  mortgagor  to  take  advantage  of  irregular  filling  up  of 
deed,  92. 
when  it  may  be  set  up  in  such  case,  93. 

grantor  by  absolute  deed  may  show  true  character  of  it,  323. 
to  deny  consideration,  616. 
to  claim  invalidity  of  mortgage,  631. 
to  claim  it  was  made  to  defraud  a  creditor,  632. 
to  set  up  defence  of  usury,  by  certificate,  645. 
to  deny  his  title,  682,  1483. 
to  deny  validity  of  mortgage,  683, 1482. 
of  mortgagee  to  assert  his  mortgage,  734. 
of  assignee  to  claim  a  merger,  853. 
of  purchaser  to  claim  merger,  854. 
of  mortgagor  to  redeem,  1049. 
of  mortgagee  to  foreclose,  1189. 
of  mortgagor  to  deny  his  title,  1483. 

by  his  declaration  or  agreements  to  take  defences,  1484. 
of  purchaser  subject  to  mortgage  to  set  up  usury,  1494. 
EXCHANGE,  payment  of  not  usurious,  637. 

not  allowed  on  mortgage  debt,  1595. 
EXECUTION  OF  MORTGAGE,  81-99,  527-541. 

proof  of,  1455. 
EXECUTION    SALE  of  equity  of  redemption,  effect  of,  665. 
of  mortgaged  premises  for  same  debt,  1229. 
may  be  made  of  other  land,  1230. 
EXECUTORS  AND  ADMINISTRATORS,  mortgages  by,  102. 
assignments  by,  796. 
foreign  assignments  by,  797. 
paying  mortgage  by  accounting,  919-923. 
purchasing  mortgage  on  estate  of  deceased,  921. 
mortgagee  administering  mortgagor's  estate,  922. 
one  of  two  executors,  tfcc,  may  discharge,  959. 
whether  foreign  executor,  &c.,  may  discharge,  960. 
may  maintain  writ  of  entry  to  foreclose,  1288. 
projjcr  parties  to  maintain  equitable  suit  for  foreclosure,  1388. 
foreign,  caimot  maintain  foreclosure  suit,  1389. 
mortgage  to,  how  foreclosed,  1390. 
of  mortgagee,  may  exercise  power,  1786. 
EXONERATION  from  mortgage  debt  in  favor  of  heir,  751. 
EXTENSION  of  mortgage,  husband  has  no  presumptive  authority  to 
make  in  behalf  of  wife,  115. 
makes  a  valuable  consideration,  459,  619. 

741 


INDKX. 

Reference  Is  to  Sections. 

EXTENSION  —  continued. 

agreeinont  for  should  be  recorded,  r)G  1. 

usury  paid  for  to  be  crediU-d,  (MS. 

when  agreement  for  is  void  on  account  of  usury,  649. 

by  purchaser,  whon  it  discharges  the  mortgagor,  742. 

when  it  does  not  impair  security,  942. 

extends  right  of  redemption,  lOoS. 

estops  mortgagee  to  foreclose,  1189,  1190. 

a  consideration  necessary  to  support,  1190. 

by  parol  agreement,  1191. 

effect  of  upon  homestead  right,  1196. 

FIXTURES,  severed  from  the  realty,  whether  personal  property,  144. 
what  are  covered  by  mortgage,  428. 
intention  largely  determines,  429. 
enumeration  of  some  excludes  others,  430. 
mortgaged  before  attached  to  realty,  431. 
hired,  not  subject  to  mortgage,  432. 
buildings  erected  on  mortgaged  land,  433. 
trees  and  shrubs  in  a  nursery,  434. 
annexed  before  mortgage,  434. 
annexed  after  mortgage,  436. 
under  an  equitable  mortgage,  437. 
agreement  of  parties  as  affecting  rule,  438. 
annexed  by  tenant  of  mortgagor,  439. 

lessee's  surrender  of  term,  440. 
rule  as  to  trade  fixtures  not  applicable,  441. 
rule  in  Vermont  exceptional  as  to,  442. 
statutory  provisions  in  Vermont  and  Connecticut,  443. 
in  mill,  rule  of  intention  respecting,  444. 
mortfraf^e  of  realty  preferred  to  one  of  fixtures,  445. 
steam-engine  and  boiler,  446.  » 

shingle  machine,  447. 
looms  in  mills,  448. 
cotton  looms,  449. 
machinery  of  silk-mill,  450. 
rolls  of  iron-mill,  451. 
rolling  stock  of  railways,  452. 
remedies  for  removal  of,  453,  695. 
action  for  damages  from  removal  of,  454,  695. 

by  mortgagee  not  in  possession,  455, 
pass  to  purchaser  under  foreclosure  sale,  1657. 
742 


INDEX. 
Reference  is  to  Sectioas. 

FLORIDA,  nature  of  a  mortgage  in,  25. 
vendor's  lien  adopted  in,  191. 
parol  evidence  to  show  a  mortgage,  291. 
provisions  respecting  registration  in,  489. 
provisions  respecting  mechanics'  liens  in,  489. 
usury  in,  633. 

entering  satisfaction  of  record,  1000.. 
no  redemption  after  foreclosure,  1051,  1330. 
statute  of  limitations,  twenty  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1330. 
power  of  sale  mortgages  and  trust  deeds  in,  1731. 
FORCIBLE  ENTRY  AND  DETAINER,  not  applicable  to  recovery 

of  possession  by  mortgagee,  720. 
FORECLOSURE,  does  not  constitute  payment,  950-955. 
strict  foreclosure  is  not  payment,  950. 
by  entry  and  possession  is  payment  jaro  tanto  only,  952. 
sale  is  payment  joro  tanto,  953. 
sale  under  power  is  payment  pro  tanto,  953. 
redemption  after  imperfect,  1048. 
redemption  after  foreclosure  of  part,  1074. 
redemption  after  sale  under,  1051,  1075. 
results  from  failure  to  redeem  according  to  decree,  1108. 
and  redemption  reciprocal,  114G.  , 

When  the  right  of  action  accrues,  1174-1191,  1289. 

upon  what  breaches  of  condition  it  accrues,  1175. 

default  in  payment  of  interest,  1170. 

when  whole  debt  becomes  due,  1177. 

when  default  in  interest  not  enough,  1178. 

promptness  of  payment  a  condition,  1179. 

whole  debt  due  on  any  default,  1180,  1181. 

default  at  election  of  mortgagee,  1182. 

who  may  take  advantage  of  default,  1183. 

provisions  against  forfeiture,  1184. 

court  will  not  relieve  from  default,  1185. 

waiver  of  default,  1186. 

guarantor  must  pay  principal  debt,  1187. 

when  condition  is  to  pay  or  save  harmless,  1188. 

mortgagee  estopped  by  agreement,  1189. 

when  time  of  payment  is  extended,  1190. 

by  parol,  1191.  , 

When  the  right  of  is  barred,  1192-1214. 

statute  of  limitations  applies  by  analogy,  1192. 

743 


IXDKX. 
Reference  is  to  Sections. 

FORECLOSURE  —  amtimici. 

tendency  to  sliorten  period  of  limitation,  1103. 
periods  of  limitation  in  the  several  states,  1193. 
presumption  of  payment  not  conclusive,  119G. 
presumption  of  payment  repelled  by  circumstances,  1197. 
payment  of  interest  renews,  1198. 

by  one  tenant  in  common,  1199. 
payment  of  taxes,  1200. 

purchaset  assuming  payment  recognizes  mortgage,  1201. 
purchaser  has  no  greater  rights  than  mortgagor,  1202. 
mortgage  lien  enforced  though  the  debt  is  barred,  1204. 

rule  otherwise  in  what  states,  1207. 
statute  runs  from  time  the  right  of  action  accrues,  1210. 
not  waived  by  the  recovery  of  judgment  for  debt,  1218. 
Statutory  prorisions  of  the  several  states  relating  to,  1317-1366. 
the  statutes  generally,  1317. 
codes  of  procedure,  1318. 
by  special  statute  not  allowed,  1320. 
law  in  force  when  mortgage  was  made  governs,  1321. 
Alabama,  1322. 
Arizona  Territory,  1322  a. 
Arkansas,  1323. 
California,  1324. 
Colorado,  1325. 
Connecticut,  1326. 
Dakota  Territory,  1327. 
Delaware,  1328. 
District  of  Columbia,  1329. 
Florida,  1330. 
Georgia,  1331. 
Idaho  Territory,  1332. 
Illinois,  1333. 
Indiana,  1334. 
Iowa,  1335. 
Kansas,  1336. 
Kentucky,  1337. 
Louisiana,  1338. 
Maine,  1339. 
Maryland,  1340. 
Massachusetts,  1341. 
Michigan,  1342. 
Minnesota,  1343. 
744 


INDEX. 

Reference  is  to  Sections. 

FORECLOSURE—  continued. 

Mississippi,  1344. 

Missouri,  1345. 

Montana  Territory,  1346. 

Nebraska,  1347. 

Nevada,  1348. 

New  Hampshire,  1349.  , 

New  Jersey,  1350. 

New  York,  1351. 

North  Carolina,  1352. 

Ohio,  1353. 

Oregon,  1354. 

Pennsylvania,  1355. 

Rhode  Island,  1356. 

South  Carolina,  1357. 

Tennessee,  1358. 

Texas,  1359. 

Utah  Territory,  1360. 

Vermont,  13G1. 

Virginia,  1362. 

"Washington  Territory,  1363. 

"West  Virginia,  1364. 

Wisconsin,  1365. 

"Wyoming  Territory,  1366. 
FORECLOSURE  BY  ENTRY  AND  POSSESSION,  1237-1267. 
is  payment  pro  tanto  of  mortgage  debt,  952. 
nature  of  the  remedy,  1237. 
where  used,  1 238. 
statutory  provisions  in  Maine,  1239. 

foreclosure  by  advertisement,  1240. 
statutory  provisions  in  New  Hampshire,  1241. 

when  mortgagee  is  in  possession,  1242. 

provisions  of  statute  must  be  strictly  followed,  1243. 
statutory  provisions  in  Massachusetts,  1244. 
statutory  provisions  in  Rhode  Island,  1245. 
Tlie  entry,  1216-1257. 

should  be  by  holder  of  legal  title,  1247. 

by  executor,  «fec.,  of  mortgagee,  1248. 

foreclosure  of  part  of  the  premises,  1249. 

assignment  of,  1  250. 

by  second  mortgagee,  1251. 

by  manit'd  woman,  1252. 

745 


INDEX. 
Referpiice  is  to  Sections. 

FORECLOSURE   HY   ENTRY  AND  POSSESSION —con/r/uierf. 

inav  be  made  at  any  time  after  breach,  12.>3. 

upon  a  jiart  of  the  land,  1254. 

manner  of  makin<^,  12.')5. 

what  is  peacoable,  12JG. 

what  is  open,  1257. 
llie  possession,  1258. 

constructive  only,  1258. 
77ie  rertifjrote  of  witnesses,  1259,  1260. 

wliat  it  must  state,  1259. 

is  conclusive,  12G0. 
the  certificate  of  mortgagor,  12G1. 
when  the  limitation  of  three  years  commences,  12G2. 
record  of  the  certificate,  1263. 

effect  of  the  foreclosure  upon  the  mortgage  debt,  12G4. 
aivei  of  entry  and  possession,  12G5-1275,  1569. 

by  express  or  implied  agreement,  1265. 

assignment  of  mortgage  after  entry,  126G. 

waiver  must  be  by  holder  of  mortgage,  1267. 

previous  purchase  under  power  not  waived  by  entry,  1268. 

payment  is  a  waiver,  1269. 

when  the  intention  of  the  parties  is  doubtful,  1270. 

rendering  account,  1271. 

conditional  waiver,  1272. 

writ  of  entry  no  waiver,  1273,  1286. 

recovery  of  judgment  for  debt  opens,  1274. 

relief  in  case  of  accident  or  mistake,  1275. 
FORECLOSURE  BY  WRIT  OF  ENTRY,  1276-1316. 
nature  of  process  and  where  used,  1276-1279. 
Who  may  maintain,  1280-1289. 

a  legal  interest  essential,  1280. 

after  assignment,  1281. 

after  assignment  as  collateral,  1282. 

joint  mortgagees  or  assignees,  1283. 

two  mortgages  held  by  one  person,  1284. 

junior  mortgagee,  1285. 

existence  of  homestead  no  objection,  1286. 

prior  entry  to  foreclosure  no  objection  to,  1287. 

executor  or  administrator  of  mortgagee,  1288. 

when  right  of  action  accrues,  1289. 
Against  whom  the  action  may  he  brought,  1290-1292. 

the  tenant  of  the  freehold,  1290. 
746 


INDEX. 
Reference  is  to  Sections. 
FORECLOSURE  BY  WRIT  OF  ENTRY  —  continued. 
the  wife  of  the  mortgagor,  1291. 

mortgagor  may  be  joined  after  he  has  conveyed  his  equity 
of  redemption,  1292. 
Pleadings  and  evidence^  1293-1295. 
the  dechiration,  1293. 
answer,  1294. 
evidence,  1295. 
The  defences,  1296-1305. 

equitable  defences  allowed,  1296. 
want  of  consideration,  1297. 
payment,  1298. 

surrender  obtained  by  fraud,  1299. 
usury,  1300. 

right  of  action  not  accrued,  1301. 
defence  as  to  part  of  premises,  1302. 
purchaser  subject  to  mortgage,  1303. 
promise  not  to  enforce,  1304. 
after-acquired  superior  title,  1305. 
The  conditional  judgment,  130G-1315. 

condition  to  pay  within  two  months,  1306. 
action  to  try  title,  1307. 
note  should  he  produced,  1308. 
amount  of  judgment,  1309. 

when  condition  is  not  for  payment  of  money,  1310. 
sums  paid  to  protect  the  estate,  1311. 
in  case  of  an  indemnity  mortgage,  1312. 
set-off,  when  allowed,  1313. 
in  case  of  joint  tenants,  1314. 
when  nothing  is  due,  1315. 
judgment  may  be  assigned,  1316. 
FORECLOSURE  BY  EQUITABLE  SUIT. 

parties  to,  13G7-M42.     (See  Paktiks,  Etc) 
jurisdiction  and  object  of  suit,  1443-1450. 

courts  of  equity  have  iiiliorent  jurisdiction  of,  1443. 

venue,  1444. 

claim  of  paramount  title  cannot  be  tried,  1445. 

right  of  mortgagee  to  remove  building  determined,  1446. 

stay  of  proceedings  when  process  improperly  used,  1447. 

trust  deed  for  security  of  all  grantor's  creditors  should  be 

enforced  in  equity,  1448. 
title  bond  may  be  foreclosed  in  equity,  1449. 

747 


INDEX. 
Reference  is  to  Sections. 

FORECLOSURE  in'  EQUITABLE  ^^.lUT  —  confmued. 

toiuU'r  of  payment  not  accepted  does  not  prevent  foreclosure 
suit,  ILK). 
T/ie  bill  or  roiiipldiiif,  L151-1478. 

general  principles,  \4f)\. 

general  requisites  of  complaint,  1452. 

facts  not  inconsistent  with  bill  may  be  proved,  1453. 

what  allegation  of  execution  and  delivery  sufficient,  1454. 

proof  of  execution,  1455. 

complainant  must  show  title,  1456. 

assignee's  title,  1457. 

complainant  having  two  mortgages  on  same  premises,  1458. 

foreclosure  for  instalment,  1459. 

bill  by  holder  of  one  of  several  mortgage  notes,  1460. 

when  one  mortgagor  is  not  liable  for  the  debt,  1461. 

description  of  the  property,  1462. 

may  omit  part,  1463. 

reforming  description,  1464. 

averment  of  record,  1465. 

description  of  debt,  1466. 

reference  to  determine  amount  of  debt,  1467. 

renewal  of  note  should  be  alleged,  1468. 

proof  of  note,  1469. 

proof  of  consideration,  1470. 

must  show  that  right  of  action  has  accrued,  1471. 

payment  of  indemnity  secured  should  be  alleged,  1472. 

allegation  that  defendant  has  a  subsequent  lien,  1473. 

•must  show  that  defendant's  interest  is  subordinate,  1474, 

all  relief  sought  should  be  prayed  for,  1475. 

essential  grounds  of  relief  should  be  set  out,  1476. 

personal  judgment  for  deficiency,  1477. 

when  some  of  the  notes  are  not  due,  1478. 
Answer  and  defence,  1479-1515. 

founded  on  written  instrument  should  be  set  out,  1480. 

denial  of  allegation  must  be  explicit,  1481. 

mortgagee's  title  cannot  be  questioned,  1482. 

mortgagor  estopped  to  deny  his  own  title,  1483. 
by  his  declarations,  &c.,  1484. 

defences  against  assignee,  1485. 

assignee  need  not  have  paid  value,  1486. 

when  assignee  takes  free  from  equities,  1487. 

transfer  of  mortgage  pending  suit,  1488. 
748 


INDEX. 
Reference  is  to  Sections. 

FORECLOSURE  BY  EQUITABLE  SUIT  —  continued. 
indemnity  mortgage,  1489. 
want  of  consideration,  1490. 
want  of  consideration  in  a  mortgage  assumed,  cannot  be  set 

up,  1491. 
fraud  is  a  good  defence,  1492. 
usury  is  a  defence,  1493. 
usury  cannot  be  set  up  by  one  who  has  bought  subject  to 

mortgage,  1494. 
mortgagor  may  be  estopped  from  setting  up  usury,  1495. 
set-off,  149G,  1497. 
what  debt  may  be  set  off,  1498. 
illegal  interest  previously  paid,  1499. 
defence  to  purchase  money  mortgage,  1500. 
defence  of  outstanding  incumbrance  rests  on  the  covenants, 

1501. 
eviction  necessary  before  failure  of  title  will  avail,  1502. 
cases  exceptional  to  rule,  1503. 
breach  of  covenant  of  seisin,  1504. 
breach  of  independent  covenant  no  defence,  1505. 
when  sale  was  effected  by  vendor's  fraud,  1506. 
this  defence  not  good  against  assignee  of  mortgage  before 

due,  1507. 
validity  of  title   may  be  a  condition  precedent  to   the  pay- 
ment of  a  purchase  money  mortgage,  1508. 
statute  of  limitations,  1509. 
insanity  of  mortgagor,  1510. 

recovery  of  judgment  on  mortgage  note  no  defence,  1511. 
defence  of  discharge  nuist  be  clearly  set  out,  1512. 
agreement  of  parties  subsequent  to  the  mortgage,  1513. 
want  of  service  on  another  defendant,  1514. 
bill  of  interi)leader,  1515. 
FORECLOSURE     WITHOUT     SALE,     OR     STRICT     FORE- 
CLOSURE.    (See  DiccuKii  ok  Sale,  1571-1 607.) 
is  payment  pro  tanto,  950. 

failure  to  pay,  decree  of  redemption  operates  as,  1108. 
nature  and  use  of  this  remedy,  1538-1541,  1572. 
historical,  1538. 
when  proper,  1540. 
in  case  of  land  contract,  1541. 
in  what  states  it  is  used,  1542-1556. 
Pleadings  and  practice,  1557-15G8. 

749 


INDKX. 
RefertMirc  Is  to  Sections. 

FOKECLOSURK    "WnilOUT    SALE,    KVC.  — continued. 

whole  ilebl  imisl  be  clue,  1557. 
parties  to  llie  bill,  1558. 
heirs  of  mortgagee  iieeessary  parties,  1559. 
pleadings,  15GU. 

jiulginent  bars  equity  of  redemption,  15G1. 
delivery  of  possession,  15G2. 
time  allowed  for  redemption,  15G3. 
when  defendant  is  an  infant  heir,  1564. 
time  for  redemption  always  allowed,  1565. 
dismissal  of  bill  to  redeem  works,  1566. 
effect  is  not  to  extinguish  debt,  1567. 
costs,  1568. 
Setting  aside  and  opening,  1569,  1570. 

for  want  of  service  on  defendant,  1570. 
FORECLOSURE  SALE,  ineffectual,  operates  as  an  assignment,  812. 
irregular,  must  be  taken  advantage  of  when,  1054. 
a  substitute  for  strict  foreclosure,  1571. 
court  of  ecpiity  may  decree  without  aid  of  statute,  1573. 
form  and  requisites  of  decree  for,  1574-1586. 
when  part  only  of  debt  is  due,  1577. 
conclusiveness  of  decree  for,  1587-1590. 
Mode  and  terms  of  sale,  1608-1615. 
nature  of,  1 608. 
what  may  be  sold,  1609. 

when  subsequent  incumbrances  provided  for,  1610. 
when  questions  of  priority  should  be  settled,  1611. 
notice  of,  1612. 
terms  of,  1613. 
deposit  required,  1614. 
on  credit,  1615. 
Sale  in  parcels,  1616-1619. 

may  be  required  by  statute  or  court,  1616. 
when  wishes  of  mortgagor  to  be  followed,  1617. 
when  determined  by  court  or  reference,  1618. 
on  subsequent  default,  1619. 
Order  of  sale,  1620-1 63 2. 

when  mortgagor  has  made  successive  sales  in  distinct  par- 
cels, 1620. 
rule  of  inverse  order,  1621. 
in  what  states  this  rule  prevails,  1621. 
applies  to  mortgages  as  well  as  sales,  1622. 
760 


INDEX. 
Reference  is  to  Sections. 
FORECLOSURE  SALE  —  continued. 

when  portions  have  been  sold  under  judgment,  1623. 
record  of  subsequent  deed  not  notice  to  mortgagee,  1G24. 
when  the  mortgage  is  made  a  common  charge,  1625. 
contribution  according  to  vahie,  1626. 
valuation  to  be  made  as  of  what  time,  1627. 
when  other  security  to  be  first  applied,  1628. 
wh^re  mortgagee  has  a  lien  upon  other  property,  1629. 
when  mortgagee  holds  two  mortgages,  1630. 
when  mortgagee  has  released  part  primarily  liable,  1631. 
when  part  of  premises  is  homestead,  1632. 
Conduct  of  sale,  1633-1636. 

officer  conducting  should  be  present,  1633. 
adjournment,  1634. 
sale  may  be  kept  open,  1635. 
objection  to  mortgagee's  buying,  1636. 
mortgagee  may  generally  purchase,  1636. 
Confirmation  of  sale,  1637-1641. 

sale  incomplete  until  confirmed,  1637. 

usury  not  taken  advantage  of  in  this  way,  1637. 

rests  wholly  in  discretion  of  court,  1638. 

resale  may  be  asked  for  by  whom,  1639. 

court  may  reopen  biddings  before  confirmation,  1640. 

great  inadequacy  of  price  may  be  urged  against,  1641. 
Enforcement  of  sale  against  purchaser,  1642-1651. 

purchaser  becomes  quasi  party,  1642. 

performance  enforced  by  attachment,  1643. 

forfeiture  of  deposit,  1644., 

when  there  is  a  defect  in  title,  1645. 

defect  in  title  prior  to  mortgage,  1646. 

errors  in  decree  or  proceedings,  1647. 

reference  as  to  title,  1648. 

incumbrance  of  taxes,  1649. 

purchaser  may  be  concluded  by  his  conduct,  1650. 

on  what  ground  purchaser  may  refuse  to  complete  sale,  1651. 
Deed,  and  passing  of  title,  1 652-1 C62. 

another  person  may  be  substituted  for  purcliaser,  1652. 

delivery  of  deed,  1653. 

title  of  purchaser  relates  back  to  execution  of  mortgage,  1  654. 

errors  in  deed,  1  655. 

after-acquired  title,  1656. 

fixtures,  1657. 

751 


INDEX. 
Iteferencc  is  to  Sections. 

POKE  CLOSURE  SWjE —co»(i>itu;f. 

eiubleiiieiUs,  IGitS. 

rents  accruing,  1G50. 

when  mortgagee  purchases,  no  deed  required,  IGGO. 

purchaser's  certilicatc  of  purchase,  Kidl. 

appeal  does  not  afl'ect  sale  already  made,  1GG2. 
Delivery  of  possession  to  purchaser,  1G63-1GG7. 

may  be  compelled  by  writ  of  assistance,  1G63^ 

against  one  who  has  entered  pending  suit,  1GG4. 

when  person  in  possession  shows  paramount  title,  IGGf). 

purchaser  not  entitled  to  order  for  possession  until  he  has 
complied  with  terms,  1GG6. 

sunnnary  proceedings  do  not  preclude  remedy  by  suit,  1667. 
Setting  aside  of  sale,  1668-1681. 

when  fraudulently  conducted,  1G68. 

application  for  resale  must  be  by  party  in  interest,  1669. 

after  confirmation,  inadequacy  of  price  not  sufficient,  1670. 

when  holder  of  mortgage  becomes  purchaser,  1671. 

neglect  of  officer  selling,  1672. 

rights  of  purchaser  always  taken  into  account,  1673. 

waived  by  delay,  1674. 

mistake  or  accident,  1675. 

mortgagor's  absence,  1676. 

few  bidders,  1677. 

invalid  sale  transfers  mortgage,  1678. 

second  action  to  foreclose,  1679. 

redemption  can  be  had  only  by  satisfying  debt,  1680. 

title  of  purchaser  vacated  when  sale  is  set  aside,  1681, 
Application  of  proceeds  of  1682-1708. 

according  to  decree  of  court,  1682. 

prior  liens  and  charges  paid  by  mortgagee,  1683. 
Disposition  of  surplus,  1684-1698. 

usually  paid  into  court,  1684. 

court  may  appoint  referee  to  settle  claims,  1685. 

upon  filing  of  referee's  report  exceptions  maybe  taken,  1686. 

only  claims  that  are  absolute  liens  can  be  considered,  1687. 

several  liens,  discharged  according  to  priority,  1688. 

simultaneous  mortgages,  1689. 

complainant  himself  may  present  claim,  1690. 

equities  of  subsequent  incumbrancers  to  be  regarded,  1691. 

prior  unrecorded  mortgage  preferred  to  judgment,  1692. 

dower  in  surplus,  1693. 
752 


INDEX. 

Reference  is  to  Sections. 
FORECLOSURE  SA"L^  —  continued. 

inchoate  right  of  dower,  1694. 
surplus  of  sale  after  death  of  mortgagor,  1695. 
lessee  for  years  not  entitled  to  any  part,  1696. 
attachment  of  proceeds  of  sale,  1697. 
surplus  of  sale  under  junior  mortgage,  1698. 
Priorities  between  holders  of  several  notes,  1699-1707. 
.  note  first  maturing  to  be  paid  first,  1699. 
of  notes  not  due,  1700. 

whether  priority  of  assignment  gives  priority,  1701. 
parties  may  change  order  of  priority  by  agreement,  1702. 
pro  rata  distribution,  1703. 
when  mortgagor  has  right  of  set-off,  1704. 
rights  of  sureties,  1706. 
costs  of  subsequent  mortgagees,  1708. 
FORFEITURE.     (See  Interest.) 

of  credit  under  mortgage,  1179-1186. 
provision  for  is  not  a  penalty,  1181. 
who  may  take  advantage  of,  1183. 
provisions  against,  1184. 
court  cannot  relieve  from,  1185. 
waiver  of,  1 186. 
FORM  of  covenant  in  mortgage  to  pay  debt,  72. 

of  interest  clause  or  agreement  that  whole  debt  shall  become  due 

on  any  default,  76. 
of  purchaser's  agreement  to  assume  mortgage,  735. 
of  assignment  of  mortgage  used  in  New  England,  786. 
in  New  York,  786. 
in  Maryland,  786. 
of  discharge  of  mortgage,  972. 
in  Maryland,  1010. 
in  Wisconsin,  1036. 
of  certificate  by  witnesses  of  mortgagee's  entry,  1260. 
of  certificate  of  mortgagor  of  mortgagee's  entry,  1260. 
FORM  OF  MORTGAGE,  60. 

of  power  of  sale  mortgage,  60. 
statutory  forms  of  mortgage,  61. 
description  of  the  parties,  63. 
designation  of  junior,  63. 
married  woman,  03. 
description  of  consideration,  64. 
•VOL.  II.  48  753 


INDEX. 
Reference  is  to  Sections. 
FRAUD,  ground  of  constructive  notice,  [y[)2. 

as  art'ecting  priority.  (U>2-()(>  1. 

in  concealing  incumbrance,  G02. 

in  inducing  another  to   purchase  the  property  as  unincumbered, 
Gilo. 

not  tiie  same  as  negligence,  603. 

negligence  may  be  evidence  of,  604. 

in  obtaining  mortgage  avoids  it,  624,  968.  • 

intent  of  on  part  of  mortgagee,  625. 

in  obtaining  mortgage  from  wife,  626. 

as  respects  creditors,  627. 

as  respects  a  particular  creditor,  628. 

in  preference  of  a  creditor,  629. 

who  may  take  advantage  of,  630. 

mortgagor  may  be  estopped  from  setting  up,  631. 

in  obtaining  discharge  of  mortgage,  966,  967,  1299. 

a  defence  in  foreclosure  suit,  1303,  1492. 
FURTHER  ADVANCKS,  redemption  after,  1079. 
FUTURE  ADVANCES,  mortgage  may  secure,  364-378. 

sanctioned  by  the  common  law,  365. 

statute  requirement  that  amount  be  expressed  in  mortgage,  366. 

description  of  the  intended  advances,  367. 

after  notice  of  subsequent  liens,  368. 

wlien  mortgagee  is  not  bound  to  make,  369. 

when  obligatory,  mortgage  is  a  lien  from  its  execution,  370. 

the  English  rule,  371. 

mortgage  for,  not  affected  by  the  record  of  subsequent  liens,  372. 

mortgage  for  definite  advances  has  priority,  373. 

mortgage  need  not  disclose  that  it  is  for,  374. 

verbal  agreement  for,  sufficient,  375. 

amounts  and  times  of  may  be  shown,  376. 

express  limitations  must  be  observed,  377. 

when  only  part  of  the  advances  are  made,  378. 

redemption  of  mortgage  given  to  secure,  1079. 

GEORGIA,  nature  of  a  mortgage  in,  26. 

written  authority  for  filling  blanks,  90. 
vendor's  lien  abolished,  191. 

not  assignable,  212. 
parol  evidence  to  show  a  mortgage,  292. 
mortgage  for  future  advances  in,  366. 

provisions  respecting  mechanics'  liens,  490.  * 

7o4 


INDEX. 
Reference  is  to  Sections. 

GEORGIA  —  continued. 

usury  in,  633. 

entering  satisfaction  of  record,  1001. 

no  redemption  after  foreclosure,  1051,  1331. 

statute  of  limitations,  twenty  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1331. 

power  of  sale  mortgages  in,  1732. 
GIFT  of  mortgage,  614,  700. 
GRACE  allowed  on  mortgage  note,  75. 
GUARANTY.     (See  Surety.) 

Whether  assignment  carries  separate  contract  of,  830. 

does  not  give  right  to  foreclose  until  after  payment  of  the  prin- 
cipal debt,  1187. 

guarantor  not  proper  party  to  foreclosure  suit,  1432. 
GUARDIAN  may  redeem,  1062. 

HABENDUM,  office  of,  67. 

in  mortgage  to  a  corporation,  67. 
HEIRS  of  mortgagee  cannot  make  an  effectual  entry  to  foreclose,  1054. 
HOMESTEAD,  subject  to  vendor's  lien,  193. 

subject  to  purchase  money  mortgage,  466. 

release  of  wife  obtained  by  fraud,  626. 

included  with  other  realty  in  mortgage,  731,  1286. 

cannot  be  incumbered  except  by  wife's  joining,  91. 

acknowledgment  of  wife  required  in  some  states,  538. 

as  affecting  order  of  foreclosure  sale,  1632. 

sale  under  execution  does  not  affect,  665. 

none  intervenes  between  discharge  of  old  and  taking  new  mort- 
gage, 927. 

revivor  or  renewal  of  mortgage  as  affecting,  949. 

holder  of  may  redeem,  1067. 

no  defence  to  a  writ  of  entry  to  foreclose  a  mortgage,  1286. 

whether  it  makes  wife  a  necessary  party  to  foreclosure  suit,  1423. 

in  surplus  proceeds  of  foreclosure  sale,  1693. 
HUSBAND,  whetlier  necessary  party  to  suit  to  foreclose  mortgage  given 
by  his  wife,  1  124. 

IDAHO  TERRITORY,  provisions  respecting  registration  in,  491. 
provisions  respecting  mechanics'  liens  in,  491. 
usury  in,  633. 

compound  interest  not  allowed  in,  650. 
entry  of  satisfaction  of  record,  1002. 

755 


INDEX. 
Reference  is  to  Sections. 

IDAHO  TEKKTTOKY  — r()«^t«»r</. 

statute  of  liinitutions,  five  years,  11 'J3. 
statutory  provisions  relating  to  foreclosure,  1332. 
ILLINOIS,  nature  of  a  mortgage  in,  27. 

written  authority  for  filling  blanks,  90. 
vendors  lien  adopted  in,  161. 

not  assignable,  212. 
parol  evidence  to  show  a  mortgage,  293. 
provisions  respecting  registration  in,  492.  • 
provisions  respecting  mechanics'  liens  in,  492. 
usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 
entry  of  satisfaction  of  record,  1003. 
redemption  after  foreclosure,  1051,  1333. 
statute  of  limitations,  ten  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1338. 
strict  foreclosure  in,  1545, 

power  of  sale  mortgages  and  trust  deeds  in,  1733. 
IMPR0VEMP:NTS,  mortgage  of,  146. 
mortgage  covers,  147. 
by  mortgagor  enure  to  mortgagee,  681. 
mortgagor's  tenants  not  allowed  compensation  for,  779. 
by  mortgagee  in  possession,  1126-1131. 

what  he  may  be  allowed  for,  1127,  1128. 
INCOME.     (See  Rknts  and  Profits.) 
INDEMNITY,  description  of  in  mortgage,  379. 
general  description  of  sufficient,  380. 
limitations  must  be  observed,  381. 
mortgage  for,  a  continuing  security,  382. 
lien  from  time  of  execution,  383. 
evidence  to  fix  amount  secured,  384. 
when  principal  creditor  is  entitled  to  the  security,  385. 
whether  surety  may  release  security,  386. 

not  after  liability  is  fixed,  387. 
mortgage,  assignment  of,  802. 
performance  of  condition  of,  887. 
discharge  of  mortgage  for,  934,  975. 
mortgage  for  covers  successive  renewals,  934. 
when  right  of  action  on  accrues,  1213. 
conditional  judgment  upon  mortgage  for,  1312. 
bill  to  foreclose  mortgage  of,  1472. 
defence  that  mortgage  was  given  for,  1489. 
756 


INDEX. 
Reference  is  to  Sections. 

INDEX,  no  part  of  the  record,  553. 

damages  for  errors  in,  554. 

descriptive,  errors  in,  555. 
INDIANA,  nature  of  a  mortgage  in,  28. 

form  of  mortgage,  61. 

verbal  authority  to  fill  blanks,  90. 

vendor's  lien  adopted  in,  191. 
assignable,  212. 

parol  evidence  to  show  a  mortgage,  294. 

record  of  assignment  not  notice,  472. 

record  of  assignment  not  notice  to  mortgagor,  473. 

provisions  respecting  registration  in,  493. 

provisions  respecting  mechanics'  lien,  493. 

usury  in,  633. 

assignment  of  debt  passes  mortgage,  817. 

entry  of  satisfaction  of  record,  1004. 

redemption  after  foreclosure,  1051,  1334. 

statute  of  limitations,  twenty  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1334. 

power  of  sale  mortgages  and  trust  deeds  in,  1734. 
INDORSEMENTS  of  payments  are  merely  admissions,  918. 
INDORSER,  failure  to  charge  does  not  affect  mortgage,  941. 

when  entitled  to  foreclose  mortgage  to  indemnify,  1187. 

not  proper  party  to  suit  to  foreclose  mortgage,  1434. 
INFANCY,  disability  of,  104,  105. 

as  affecting  a  purchase  money  mortgage,  104. 

ratification  of  mortgage  voidable  for,  105. 

certificate  of  magistrate  that  wife  is  of  age,  538. 
INFORMAL  MORTGAGE,  may  be  good  in  equity,  168. 

executed  in  name  of  agent,  169. 
INJUNCTION  against  waste  by  mortgagor,  684. 

not  against  removal  of  timber  cut,  685. 

no  duty  on  part  of  mortgagee  to  obtain,  686. 

against  exercise  of  power  of  sale,  1801-1820. 
INJURY    to    mortgaged   property,    mortgagee's    right   of    action    for, 

695. 
INSANITY,  disability  of,  103. 

of  mortgagor,  defence  in  foreclosure  suit,  1510. 
docs  not  revoke  power,  1793. 
INSTALMENT,  foreclosure  for,  1459. 

decree  for,  1577,  1591. 

surplus  proceeds  of  sale  ap])licd,  how,  1707. 

757 


INDEX. 
Itefcrencc  is  to  Sections. 

INSURANCE,  condition  to  efieot,  78. 
a  contract  of  indeinnity,  31)6. 
interests  covered  by,  397. 

aiij)lication  for  should  disclose  incunibrance,  ^00. 
by  mortgagor  for  benefit  of  mortgagee,  400. 
when  no  covenant  to  insure  for  the  benefit  of  mortgagee,  401. 
mortgagee's  equitable  lien  for,  402. 

how  far  others  affected  by,  403. 

valid  against  mortgagor's  assignee  in  bankruptcy,  404. 

statutory  provision  for  in  Maine,  405. 
loss  payable  to  mortgagee,  406. 

equivalent  to  assignment,  407. 

who  may  sue  for,  408. 
mortgagee  must  apply  to  debt,  409,  1136. 

when  debt  not  due,  410. 
insurers  not  subrogated  to  mortgagee's  rights,  411. 
agreement  to  assign  to  insurers,  412. 
acts  of  owner  in  derogation  of  policy,  413. 
when  mortgagee  may  charge  for  insurance,  414,  1135,  1596. 

under  a  condition  to  insure,  415. 
when  mortgagee  liable  as  insurer,  416. 
return  premium,  417. 

obtained  by  mortgagee  presumed  to  be  under  mortgage,  418. 
of  niortgagee's  interest,  not  of  the  debt,  419. 
when  insurer  subrogated,  420. 
King  V.  State  Mut.  Fire  Lis.  Co.  421. 
mortgage  not  an  alienation,  422. 

unless  by  deed  absolute,  423. 

entry  to  foreclose,  424. 

when  title  becomes  absolute,  425. 
alteration  of  ownership,  426. 
assignment  of  policy  with  consent,  427. 
INTEREST,  form  of  provision  to  pay,  73,  75,  76. 
when  rate  not  named,  74. 
increasing  rate  of,  361. 
as  shown  by  record,  565. 
rates  of  in  the  several  states,  633. 
compound,  whether  usurious,  650. 

provisions  as  to  in  the  several  states,  650. 

while  agreement  for  is  executory,  651. 

accrued  interest  is  a  debt,  652. 

coupons  for,  653,  1141. 
768 


INDEX. 
Reference  is  to  Sections. 

mTEREST  —  co7it{mied. 

compound,  may  be  enforced  as  it  matures,  654. 

computation  of,  655. 

ceases  from  time  of  sufficient  tender,  899. 

payments  appropriated  to  before  principal,  911. 

no  presumption  of  payment  of,  914. 

taking  new  note  for,  932. 

rate  allowed  in  stating  mortgagee's  account,  1141. 

when  default  in  payment  of  authorizes  foreclosure,  1176-1178. 

payment  of  prevents  running  of  statute  of  limitations,  1198. 

decree  of  sale  should  include,  1594. 
INVERSE  ORDER,  of  liability  of  purchasers  of  portions  of  mortgaged 
premises,  1092. 

an  equitable  rule,  1620. 

where  the  rule  prevails,  1621. 

rule  applies  to  mortgages,  1622. 

record  of  subsequent  deed  not  notice  to  mortgagee,  1724. 

when  mortgage  made  a  common  charge,  1625. 

contribution  according  to  value,  1626. 

valuation  as  of  what  time,  1627. 

mortgagee  having  other  security,  1628,  1629. 

release  of  part  primarily  liable,  1631. 

when  part  of  preniises  is  a  homestead,  1632. 
IOWA,  nature  of  a  mortgage  in,  29. 

form  of  mortgaoje,  61. 

vendor's  lien  adopted  in,  191. 

defeated  by  vendor's  conveyance,  198. 

vendor's  lien  by  contract  how  enforced,  239. 

parol  evidence  to  show  a  mortgage,  295. 

provisions  respecting  registration  in,  494. 

provisions  respecting  mechanics'  liens  in,  494. 

usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 

entry  of  satisfaction  of  record,  1005. 

redemption  after  foreclosure,  1051,  1335. 

statute  of  limitations,  ten  years,  1193. 

statutory  provisions  rolatinj,'  to  foreclosure,  1335. 

strict  foreclosure  not  known  in,  1546. 

power  of  sale  sale  mortgages  and  trust  deeds  in,  1735. 

JOINT  MORTGAGEES,  1.^5. 

writ  of  entry  by,  to  foreclose  mortgage,  1283. 

759 


INDEX. 
Reference  is  to  Sections. 
JOINT  MORTrrAOEES  —coiiffnucd 

equitable  suit  to  foreclose  by,  l.'J81,  1382. 
parties  to  foreclosure  suit,  1435. 
JUDGIMENT,  for  nu)rtga«;c  debt  does  not  discharge  it,  936. 
for  portion  of  mortgage  debt,  937. 
under  trustee  process  payment  j[>ro  tanto,  938. 
release  of  discharges  debt,  940. 
for  the  mortgage  debt  does  not  waive  the  right  to  foreclose, 

1218. 
recovery  of  opens  foreclosure,  1274. 

conditional,  in  suit  to  foreclose  by  writ  of  entry,  1306-1316. 
may  be  assigned,  1316. 

on  note  or  bond  no  defence  to  foreclosure  suit,  1511. 
in  foreclosure  suit  when  final,  1600. 
For  deficiency,  1709-1721. 

statutory  provisions  concerning,  1709. 
third  person  may  be  joined  when,  1710. 
court  of  equity  acting  without  authority  of  statute,  1711. 
if  there  be  no  bond  or  note,  1715. 
against  non-resident,  1716. 
upon  decease  of  mortgagor,  1717. 
personal  judgment  against  wife  erroneous,  1718. 
when  it  becomes  a  lien,  1720. 
JUDGMENT  CREDITOR,  may  show  absolute  deed  to  be  a  mortgage, 
337. 
not  a  purchaser  within  the  recording  acts,  460. 
mortgagee  has  priority  of,  when,  461,  462,  463. 
notice  of  unrecorded  mortgage,  582. 
may  redeem  mortgage,  1069. 
proper  party  to  foreclosure  suit,  1436. 
.JURISDICTION  of  suits  to  foreclose  mortgages,  1443. 

KANSAS,  nature  of  a  mortgage  in,  30. 

written  autliority  to  fill  blanks,  90, 
vendor's  lien  repudiated,  191. 
parol  evidence  to  show  a  mortgage,  296. 
record  of  assignment  not  notice  to  mortgagor,  473. 
provisions  respecting  registration  in,  495. 
provisions  respecting  mechanics'  liens  in,  495. 
entry  of  satisfaction  of  record,  1006. 
no  redemption  after  foreclosure,  1051,  1336. 
statute  of  limitations,  fifteen  years,  1193,  1207. 
760 


INDEX. 
Reference  is  to  Sections. 

KANSAS  —  continued. 

statutory  provisions  relating  to  foreclosure,  1336. 

power  of  sale  mortgages  and  trust  deeds  in,  1736. 
KENTUCKY,  nature  of  a  mortgage  in,  31. 

written  authority  to  fill  blanks,  90. 

vendor's  lien  in,  191. 

defeated  unless  stated  in  deed,  198. 
assignable,  212. 

parol  evidence  to  show  a  mortgage,  297. 

provisions  respecting  registration  in,  496. 

provisions  respecting  mechanics'  liens  in,  496. 

usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 

entry  of  satisfaction  of  record,  1007. 

no  redemption  after  foreclosure,  1051, 1337. 

when  right  to  redeem  barred  in,  1145. 

statute  of  limitations,  fifteen  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1337. 

strict  foreclosure  in,  1547. 

power  of  sale  mortgages  and  trust  deeds  in,  1737. 

LAND   CONTRACT.     (See  Title  Bond.) 
LAND   GRANT  subject  to  mortgage,  157. 
LAW  OF  PLACE,  as  regards  usury,  656-663. 

as  regards  assignnients,  823. 
LEASE,  mortgage  of  how  foreclosed  1449. 
LEASEHOLD  ESTATES,  mortgage  of,  within  recording  acts,  471. 

mortgagor  in  possession  entitled  to  rents,  670. 

when  mortgagee  liable  for  rent,  785. 

mortgagee  entitled  to  the  rents,  785. 
LESSI'^E  of  mortgaged  estate,  his  rights  and  liabilities,  771-785. 

mortgagor  in  possession  not  liable  for  rent,  771. 

made  before  mortgage  not  affected  by  it,  773. 

mortgage  of  premises  already  leased  is  an  assignment  of  the  re- 
version, 774. 

rent  accrued  does  not  pass  by  the  assignment,  774. 

rights  of  mortgagee  as  assignee  of  the  reversion,  774,  775. 

of  mortgagor  after  mortgage  is  subject  to  it,  776. 

attornment  by,  777,  778. 

mortgagee  may  treat  lessee  as  trespasser,  777. 

tenants  not  allowed  compensation  for  improvements,  779. 

emblements,  780. 

761 


INOKX. 
Reference  is  to  Sections. 

LESSEE  —  conduurd. 

no  one  but  moitfxngce  can  take  advantanje  of  invalid  lease,  781. 
provision  autlioriziiiL,^  mortgagor  to  bind  mortgagee  by  lease,  782. 
lease  by  nioit^Ui^ee  in  possession  terminated  by  redemption,  783. 
assignment  by  mortgagee  in  possession  does  not  transfer  rent  due, 

784. 
for  years,  not  entitled  to  any  part  of  surplus,  1G96. 
LIMITATIONS,  STATUTE  OF. 

As  affecting  vendor's  lien  by  contract,  237. 
when  mortgage  debt  barred  by,  915. 
applies  by  analogy  to  right  of  redemption,  1144. 
the  statute  in  force  governs,  1145. 
special  statutes  relating  to  redemption,  1145. 
when  mortgagee's  possession  not  adverse,  1149. 
adverse  possession  operates  against  married  woman,  1150. 
successive  disabilities  of  mortgagor,  1151. 
When  it  begins  to  run  against  redemption,  1152. 
not  while  mortgage  relation  exists,  1152. 
under  Welsh  mortgage,  1158. 
when  mortgagor  retains  possession  of  part,  1155. 
runs  from  time  of  entry  of  mortgagee,  1156. 
presumption  that  right  is  barred  after  twenty  years,  1157. 
constructive  possession  not  sufficient,  1158. 
when  notice  to  mortgagor  necessary,  1159. 
when  right  is  barred  after  imperfect  foreclosure,  1161. 
What  prevents  the  running  of,  1162-1173. 

acknowledgment  of  mortgagee,  1162. 
to  a  third  person,  1164. 
binding  upon  all  claiming  under,  1165. 
by  rendering  account,  1166. 
by  letter,  1167. 

by  assignment  of  mortgage,  1168. 
by  recital  in  deed,  1169. 
by  suit  to  enforce,  1170. 
verbal,  1171. 
filing  of  bill  to  redeem  stops,  1172. 
how  pleaded,  1173. 
When  the  right  to  foreclose  is  barred,  1192-1214. 

statute  applies  to  mortgages  by  analogy,  1192. 
tendency  to  shorten  period  of,  1193. 

presumption  of  payment  after  twenty  years  not  conclusive, 
1196. 
762 


INDEX. 
Reference  is  to  Sections. 

LIMITATIONS,  STATUTE  OF —co?itinued. 

presumption  repelled  by  circumstances,  1197. 
payment  of  interest  renews,  1198. 

by  one  tenant  in  common,  1199. 
payment  of  taxes,  1200. 
statute  does  not  discharge  the  debt,  1203. 
though  debt  be  barred  lien  may  be  enforced,  1204. 

in  what  states  rule  is  otherwise,  1207. 
adverse  possession  by  several  persons  successively,  1208. 
lien  for  purchase  money  barred  when  debt  is  barred,  1209. 
statute  runs  in  favor  of  mortgagor  from  time  mortgagee's 

right  of  action  accrues,  1210. 
possession  of  mortgagor  presumed  to  be  subordinate,  1211. 
special  statute  of  limitations,  1214. 
defence  of,  in  bill  to  foreclose,  1509. 
LIS  PENDENS,  doctrine  of  as  regards  registration  and  notice,  599. 

as  regards  new  parties  in  interest,  1411,  1442. 
LOSS  OF  MORTGAGE,  decree  for  making  a  new  one,  100. 
LOUISIANA,  notice  of  a  mortgage  in,  32. 

provisions  respecting  registration  in,  497. 
usury  in,  Go3. 

compound  interest  cannot  be  recovered,  650. 
assignment  of  debt  passes  mortgage  in,  817. 
entry  of  satisfaction  of  record,  1008. 
no  redemption  after  foreclosure,  1051,  1338. 
statutory  provisions  relating  to  foreclosure,  1338. 
power  of  sale  mortgages  and  trust  deeds  in,  1738. 
LUMPING  SALES.     (See  Salks  in  Paucels.) 

MAINE,  nature  of  a  mortgage  in,  33. 

verbal  authority  to  fill  blanks,  90. 
vendor's  lien  repudiated  in,  191. 
parol  evidence  to  show  a  mortgage,  298. 
statutory  provisions  as  to  insurance,  405. 
provisions  respecting  registration  in,  498. 
provisions  respecting  mechanics'  liens  in,  498. 
usury  in,  G33. 

assignment  of  debt  without  mortgage  in,  817. 
entry  of  satisfaction  of  record.  1009. 
redemption  after  entry  to  foreclose,  1051,  1339. 
statute  of  limitations,  twenty  years,  1193. 

provisions  respecting  foreclosure  by  entry  and  possession,  1239, 
1240.  T(i3 


INDKX. 
Referaiice  is  to  Sections. 

MAINE  —  continued. 

writ  of  entry  to  foreclose  mortgage,  1270,  1277. 

statutory  provisions  relating  to  foreclosure,  1339. 

power  of  sale  mortgages  and  trust  deeds  in,  1739. 
MARRIED  WOMAN,  description  of  in  mortgage,  G3. 

acknowledgments  by,  83. 

disability  of  at  common  law,  lOG. 

coverture  does  not  remove  disability  of  infancy,  106. 

liability  of  in  equity  for  her  contracts,  107. 

English  rule  of  liability  of  her  property,  108. 

American  rule,  lOit. 

can  bind  herself  personally  on  what  contracts,  110. 

liability  of  for  a  deficiency  after  foreclosure.  111. 

doctrine  of  her  liability  for  her  general  debts,  112. 

her  mortgage  to  secure  husband's  debt,  113. 

when  a  surety  for  her  husband,  114,  949. 

may  assume  a  mortgage,  116,  753. 

may  take  mortgages,  133. 

bound  by  lien  reserved  in  deed  to,  231. 

mortgage  of,  obtained  by  duress  or  fraud,  626. 

entitled  to  the  benefit  of  payments  on  her  mortgage,  949. 

equitable  assignment  of  mortgage  by,  813. 

holding  mortgage,  may  foreclose,  1393. 

wife  of  mortgagor  party  to  foreclosure  suit,  1420-1422. 

not  liable  to  personal  judgment  for  deficiency,  1718. 

may  confer  a  valid  power  of  sale,  1777  a. 
MARSHALLING  ASSETS,  as  between  different  creditors,  875. 

when  mortgagee  has  other  security,  1628,  1629. 

when  mortgagee  holds  two  mortgages,  1630. 

after  release  by  mortgagee  of  part  primarily  liable,  1631. 
MARYLAND,  nature  of  a  mortgage  in,  34. 

form  of  mortgage,  61. 

written  authority  to  fill  blanks,  90. 

vendor's  lien  adopted,  191. 
not  assignable,  212. 

parol  evidence  to  show  a  mortgage,  299. 

record  of  assignments  provided  for,  472. 

provisions  respecting  registration  in,  499. 

provisions  respecting  mechanics'  liens  in,  499. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1010. 

no  redemption  after  foreclosure,  1051,  1340. 
764 


INDEX. 

Reference  is  to  Sections. 

MARYLAND  —  continued. 

statutory  provisions  relating  to  foreclosure,  1340. 
power  of  sale  mortgages  and  trust  deeds  in,  IT-iO. 
MASSACHUSETTS,  nature  of  a  mortgage  in,  35. 
form  of  mortgage,  60. 
written  authority  to  fill  blanks,  90. 
vendor's  lien  repudiated,  191. 
parol  evidence  to  show  a  mortgage,  300. 
provisions  respecting  registration  in,  500. 
provisions  respecting  mechanics'  liens  in,  500. 
usury  in,  633. 

assignment  of  debt  without  mortgage  in,  817. 
entry  of  satisfaction  of  record,  1011. 
redemption  after  entry  to  foreclose,  1051,  1341. 
statute  of  limitations,  twenty  years,  1193. 

provisions  respecting  foreclosure  by  entry  and  possession,  1244. 
writ  of  entry  to  foreclose  mortgage,  1276,  1277. 

statutory  provisions  relating  to  foreclosure,  1341. 

power  of  sale  mortgages  and  trust  deeds  in,  1741. 
MECHANIC'S  LIEN,  vendor  reserving  legal  title  not  affected  by,  227. 

subject  to  purchase  money  mortgage,  466. 

mortgage  for  obligatory  advances  has  precedence,  370. 

purchase  money  mortgage  has  precedence,  509,  note,  568. 

attempt  to  defeat  by  fraudulent  mortgage,  628. 

mortgage  executed  before  commencement  of  building  has  prece- 
dence of,  609. 

general  view  of  statutes  affecting  priority  of  mortgages,  479  a. 

from  commencement  of  the  work,  479  a. 

what  the  commencement  of  a  building  is,  509,  note,  479  a. 

commencement  of  alteration,  479  a. 

for  repairs  not  paramount  to  existing  mortgage,  479  a. 

proof  requisite  to  establish,  479  a. 

upon  building  distinct  from  land,  479  a. 

synopsis  of  the  statutes  of  the  several  states,  480,  481-526,  notes. 
MERGER,  doctrine  of,  848-873. 

at  law  and  in  equity,  848. 

none  on  assignment  to  co-tenant,  849. 

none  on  assignment  to  wife  of  mortgagor,  850. 

none  on  marriage  of  mortgagor  and  tnortLja^ce,  851. 

none  when  equitable  estate  has  been  extinguished,  852. 

when  assignee  is  estopped  to  claim,  853. 

estopped  by  selling  the  estate  free  of  incumbrances,  854. 

70o 


INDKX. 
Reference  is  to   Sections. 

MERGER  —  contiiuicd. 

intention  governs  as  to,  805. 

intention  expressed,  856. 

intention  expressed  against  merger,  857. 

a  release  may  operate  as  assignment,  858. 

deed  of  quitclaim  from  mortgagee,  859. 

bequest  of  mortgage  to  mortgagor,  8G0. 

parol  evidence  of  intention,  8G1. 

in  new  security  or  judgment,  862. 

mortgage  will  not  be  kept  alive  to  aid  in  a  wrong,  863. 

when  debt  is  paid  by  one  bound  to  pay  it,  864. 

when  mortgage  assigned  to  one  who  has  assumed  it,  865. 

with  reference  to  right  of  dower,  866, 

payment  by  one  who  has  warranted  against  incumbrances,  867. 

assignment  to  subsequent  purchaser,  868. 

payment  by  purchaser,  869. 

acquisition  of  equity  of  redemption  by  mortgagee,  870. 

mortgagee  purchasing  and  giving  up  note,  871. 

purchaser  caimot  rely  upon  record  as  showing,  872. 

whether  extinguishment  of  equity  or  merger  of  mortgage,  873. 

merger  of  note  in  judgment  does  not  extinguish  debt,  936. 
MICHIGAN,  nature  of  a  mortgage  in,  36. 

vendor's  lien  adopted  in,  191. 

parol  evidence  to  show  a  mortgage,  301. 

record  of  assignment  not  notice  to  mortgagor,  473. 

provisions  respecting  registration  in,  501. 

provisions  respecting  mechanics'  liens  in,  501. 

usury  in,  633. 

compound  interest  allowed  in,  650. 

assignment  of  debt  passes  mortgage  in,  817. 

tender  of  payment  discharges  debt  in,  893. 

entry  of  satisfaction  of  record,  1012. 

redemption  after  foreclosure,  1051,  1342. 

statute  of  limitations,  fifteen  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1342. 

power  of  sale  mortgages  and  trust  deeds  in,  1742. 
MINNESOTA,  nature  of  mortgage  in,  37. 

vendor's  lien  adopted  in,  191. 

parol  evidence  to  show  a  mortgage,  302, 

record  of  assignment  not  notice  to  mortgagor,  473. 

provisions  respecting  registration  in,  5U2. 

provisions  respecting  mechanics'  liens  in,  502. 
766 


INDEX. 
Reference  is  to  Sections. 

MINNESOTA  —  continued. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1013. 

redemption  after  foreclosure,  1051,  1343. 

statute  of  limitations,  ten  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1343. 

strict  foreclosure  in,  1548, 

power  of  sale  mortgages  and  trust  deeds  in,  1743. 
MISSISSIPPI,  nature  of  mortgage  in,  38. 

written  authority  to  fill  blanks,  90. 

power  of  married  woman  to  mortgage,  118. 

vendor's  lien  adopted  in,  191. 

parol  evidence  to  show  a  mortgage,  303. 

provisions  respecting  registration  in,  503. 

provisions  respecting  mechanics'  liens  in,  503. 

usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 

entry  of  satisfaction  of  record,  1014. 

no  redemption  after  foreclosure,  1051,  1344. 

when  right  to  redeem  barred  in,  1145. 

statute  of  limitations  in,  1193. 

statutory  provisions  relating  to  foreclosure,  1344. 

power  of  sale  mortgages  and  trust  deeds  in,  1744. 
MISSOURI,  notice  of  a  niortgage  in,  39. 

form  of  mortgage,  Gl. 

vendor's  lien  adopted  in,  191. 
not  assignable,  212. 

parol  evidence  to  show  a  mortgage,  304. 

provisions  respecting  registration  in,  504. 

provisions  respecting  mechanics'  liens  in,  504. 

usury  in,  633. 

compound  interest  allowed  in,  650. 

assignnient  of  debt  passes  mortgage  in,  817. 

entry  of  satisfaction  of  record,  1015. 

no  redemption  after  foreclosure,  1051,  1345. 

statute  of  limitations,  ten  y<'ars,  1193. 

statutory  provisions  relating  to  foreclosure,  1345. 

strict  foreclosure  not  allowed  in,  1549. 

power  of  sale  mortgages  and  trust  deeds  in,  1745. 
MI.STAKKS,  in  drawing  mortgage,  97. 

in  describing  debt,  354. 

discharge  made  by,  966-971. 

767 


INDKX. 
Reference  is  to  Seetioiis. 

MISTAKES  —  cnuiinuciL 

only  mistake  of  fact  in  making  disciiarge  entitles  one  to  relief, 

GDI), 
in  making  discluugo  when  assignment  was  intended,  970. 
in  substiluliiig  new  mortgage  when  there  was  an  intervening  lien, 

971. 
when  ground  for  setting  aside  foreclosure  sale,  1G75. 
in  advertisement  of  sale,  1851. 
MONTANA  TERRITORY,  nature  of  a  mortgage  in,  39  a. 
provisions  respecting  registration  in,  505. 
provisions  respecting  mechanics'  liens  in,  505. 
usury  in,  633. 

entry  of  satisfaction  of  record,  1016. 
statute  of  limitations,  three  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1346. 
power  of  sale  mortgages  and  trust  deeds  in,  1746. 
MORTGAGE,  at  law  and  in  equity,  8-16,  59. 
common  law  doctrine  of,  11. 
not  a  mere  security,  12. 
the  different  theories  of,  14. 

practical  distinctions  between,  15. 
definition  of,  16. 

nature  of  in  the  different  states,  17-59. 
form  of,  60. 

description  of  the  parties,  63. 
consideration  named  in,  64.  ^ 

description  of  premises,  65. 
uncertainty  in  description,  66. 
habendum  in,  67. 
covenant  in,  68. 
condition  in,  69. 
description  of  debt  secured,  70. 
sealing  is  essential,  81. 
signing  is  requisite,  81. 
witness  to,  82. 
acknowledgment  of,  83. 
delivery  of  essential,  84. 
subsequent  acceptance  of,  85. 
executed  to  be  sold,  when  a  lien,  86. 
date  of,  89. 

filling  blanks  after  execution  of,  90. 
alteration  of,  94,  95. 
768 


INDEX. 

Reference  is  to  Sections. 

MORTGAGE  —  continued. 

cannot  be  varied  by  parol,  90. 
reforming  a  mortgage,  97-99. 
principles  of  construction,  101. 
legal  capacity  to  execute,  102. 
of  partnership  real  estate,  119-123, 
by  corporation,  124-128. 
who  may  make,  102-130. 
who  may  take,  131-135. 
what  may  be  the  subject  of,  136-161. 
of  a  mortgage,  138,  139. 
of  rents,  140. 

of  building  may  pass  the  land,  142. 
statutory,  178. 

by  absolute  deed  and  agreement  to  reconvey,  241-281. 
distinguished  from  conditional  sale,  241-281. 
cannot  be  shown  by  parol  to  have  been  intended  as  sale,  277. 
distinguislied  from  a  trust,  281,  332. 
parol  evidence  to  prove,  282-342. 
the  debt  secured  by,  343-395. 
redelivery  of  for  new  obligation,  362. 
to  secure  future  advances,  364^378. 
of  indenmity,  379-387. 
for  support,  388-395. 

not  an  alienation  within  terms  of  insurance  policy,  422. 
what  fixtures  covered  by,  428-452. 
registration  of,  456-569. 
for  purchase  money,  464,  466. 
void  and  voidable,  610-632. 
usurious,  633-663. 

before  foreclosure  is  personal  assets,  700. 
of  premises  leased  is  an  assignment  of  the  reversion,  774. 
for  support,  assignment  of,  803. 
assignment  of  without  debt,  805. 
payment  of,  886-942. 
revivor  of,  9  13-9  19. 
foreclosure  of  is  not  payment,  950-955. 
who  may  receive  payment  of,  956-965. 
discharge  of,  956-1037. 
redemption  of,  1038-1113. 
when  right  to  redeem  is  barred,  1144-1173. 
when  right  to  foreclosure  accrues,  1174-1191. 
VOL.  n.  40  Yg9 


INDEX. 
Reference  is  to  Sections. 

MORTGAGEE,  at  common  law  has  legal  estate,  11. 

his  right  of  possession  in  the  several  states,  17-59. 

lining  in  name  after  execution,  90,  91. 

insurable  interest  of,  .'>97. 

equitable  lien  of,  upon  insurance,  402. 

loss  payable  to,  406-410. 

when  liable  as  insurer,  41 G. 

insurance  obtained  by,  418-421. 

a  purchaser  within  the  recording  acts;  458. 

but  not  when  the  mortgage  secures  a  preexisting  debt,  45f 

further  time  is  a  good  consideration,  458. 
mortgagor's  possession  not  adverse  to,  672. 
not  liable  to  ejectment  by  mortgagor,  674. 
not  liable  to  trespass  by  mortgagor,  675. 
mortgagor's  personal  liability  to,  677. 
right  of  action  for  waste,  687-691. 
remedy  of,  for  injury  by  mortgagor,  695. 
remedy  for  wilful  injury  done  the  security,  696. 
His  rights  and  liabilities,  699-734. 

not  in  general  sense  owner  of  the  property,  699. 

his  interest  personal  assets,  700. 

cannot  be  levied  upon  or  attached,  701. 

when  entitled  to  possession,  702. 

cannot  be  disseised  by  mortgagor,  703. 

joint  tenancy,  704. 

when  may  have  partition,  705. 

when  bound  by  partition  between  mortgagors,  706. 
His  rights  against  mortgagor,  707-721. 

entitled  to  whole  security,  707. 

entitled  to  an  award  of  damages  to  property,  708. 

an  essential  party  to  proceedings  affecting  his  rights,  709. 

a  purchaser  to  extent  of  his  claim,  710. 

may  purchase  mortgagor's  equity,  711. 
although  in  possession,  712. 
lin)itation  of  this  right,  713. 

acquiring  tax  title,  714. 

cannot  be  divested  of  possession  until  payment,  715,  716. 
rule  otherwise  in  Michigan,  717. 

writ  of  entry  by,  718. 

ejectment  by,  718. 

forcible  entry  and  detainer  by,  720. 

trespass  for  mesne  profits,  721. 
770 


INDEX. 

Reference  is  to  Sections. 

MORTGAGEE  —  continued. 

His  liability  to  third  persons,  722-734. 

for  releasing  part  of  security,  722. 

what  notice  of  other's  rights  affects,  723. 

cannot  release  to  prejudice  of  surety,  724. 

nor  to  prejudice  of  junior  mortgagee,  725. 

principal  creditor  entitled  to  surety's  mortgage,  726. 

for  release  of  mortgagor  from  liability,  726, 

for  application  df  other  security,  728. 

proof  of  claim  in  bankruptcy,  729. 

cannot  change  terms  of  mortgage  as  against,  730,  732. 

when  homestead  is  included  in  mortgage,  731. 
junior  moi-tgagee's  rights,  725,  730,  732,  733,  756. 
when  estopped  to  assert  mortgage,  734. 
when  entitled  to  rents  of  mortgaged  premises,  772-775. 
lease  by  mortgagee  in  possession,  783. 
whether  liable  for  rent  of  leasehold  estate,  785. 
whether  he  can  be  compelled  to  assign  on  payment,  792,  793. 
legal  interest  of  after  assignment,  818,  819. 
purchasing  equity  of  redemption,  when  a  merger,  871. 
junior  may  redeem,  1064. 

liability  to  account  for  rents  and  profits,  1114-1143. 
his  remedies  for  enforcing  mortgage,  1215-1236. 
Buying  at  foreclosure  sale  under  decree,  1636. 

generally  no  objection  to,  1636. 

no  deed  necessary  to  pass  title,  1660. 

court  more  ready  to  open  sale,  1671. 
Buying  under  power  of  sale,  1876-1888. 

generally  not  allowed  to  buy,  1876. 

purchase  voidable  though  no  fraud  be  shown,  1877. 

rule  applies  to  mortgagee's  solicitor,  1878. 
or  agent,  1879, 

less  strictness  than  in  case  of  trustee,  1881. 

no  restriction  when  the  sale  is  judicial,  1882. 

provision  in  mortgaf^e  enabling,  1883. 

rule  has  no  application  to  subsequent  mortgagee,  1884, 

right  to  avoid  waived  by  delay,  1885. 
MORTGAGOR,  the  legal  owner  except  as  to  the  mortgagee,  11. 
where  his  interest  is  regarded  as  the  legal  estate,  13. 
provision  for  his  retaining  possession,  80. 
when  estopped  to  take  advantage  of  irregular  execution,  92, 
cannot  renounce  right  of  redemption  in  mortgage,  251. 

771 


INDEX. 
Refcrenco  is  to  Sections. 

MORTGAGOR  —  continued. 

interest  of  insurable,  397. 

how  long  it  remains  so,  398. 
insurance  by,  for  benefit  of  mort<;agee,  400. 
his  rii^hts  and  liabilities,  GG1-G98. 
his  right  of  possession  as  against  third  persons,  664. 
his  equity  of  redemption  may  be  sold  on  execution,  GG5. 
his  widow  entitled  to  dower  in  equity  of  redemption,  G66. 
his  right  of  possession  against  mortgagee,  G67. 

may  be  implied  when,  668. 

as  modified  by  statute,  669. 

his  right  to  rents  and  profits,  G70. 

whether  liable  to  mortgagee  for  rent,  671. 

his  possession  not  adverse  to  mortgagee,  672. 

remedy  of  to  recover  possession  from  mortgagee,  673. 
cannot  maintain  ejectment  against  mortgagee,  674. 
cannot  maintain  trespass  against  mortgagee,  675. 
has  perfect  right  to  convey  his  equity,  676. 
his  personal  liability  to  mortgagee,  677. 
no  covenant  to  pay  implied,  678. 
subsequently  acquired  title  of,  679. 
cannot  set  up  tax  title,  680. 
his  improvements  are  subject  to  mortgage,  681. 
is  estopped  to  deny  his  title,  682. 
when  estopped  to  deny  validity  of  mortgage,  683. 
viraste  by  may  be  restrained,  684-696. 
his  removal  of  timber  already  cut,  685. 
when  replevin  for  timber  cut  may  be  had,  688. 
may  have  license  to  cut  wood,  692. 
his  abuse  of  license  to  cut  wood,  693. 
his  right  to  wood  for  his  own  fires,  694. 
liability  of,  to  action  for  injury  to  property,  G95,  696. 
his  right  to  emblements,  697. 
may  waive  right  to  emblements,  698. 
release  from  personal  liability,  727. 
in  possession  entitled  to  the  rents,  771,  1120. 
lease  by,  after  mortgage,  776. 
not  bound  by  stipulation  not  to  redeem,  1039. 
MORTUUM  VADIUM,  2,  L 

NATIONAL  BANKS  prohibited  from   taking  mortgages   except   for 
prior  indebtedness,  134. 

772 


INDEX. 

Reference  is  to  Sections. 

NATURE  OF  A  MORTGAGE,  1-59. 
at  law  and  in  equity,  8-1  6. 
in  the  different  states,  17-59. 
NEBRASKA,  nature  of  a  mortgage  in,  40. 

parol  evidence  to  show  a  mortgage,  305. 
record  of  assignment  not  notice  to  mortgagor,  473. 
provisions  respecting  registration  in,  506. 
provisions  respecting  mechanics'  liens  in,  506. 
usury  in,  633. 

entry  of  satisfaction  of  record,  1017. 
no  redemption  after  foreclosure,  1051,  1347. 
statute  of  limitations,  ten  years,  1193. 
mortgage  barred  when  debt  barred,  1207. 
statutory  provisions  relating  to  foreclosure,  1347. 
strict  foreclosure  in,  1550. 

power  of  sale  mortgages  and  trust  deeds  in,  1747. 
NEGLIGENCE,  as  affecting  priority,  604. 
is  not  fraud  but  evidence  of  it,  604. 
in  cancelling  a  mortgage  and  taking  a  new  one,  605. 
in  taking  one  of  several  notes  secured,  606. 
NEVADA,  nature  of  a  mortgage  in,  41. 

parol  evidence  to  show  a  mortgage,  306. 
provisions  respecting  registration,  507. 
provisions  respecting  mechanics'  liens  in,  507. 
usury  in,  633. 

entry  of  satisfaction  of  record,  1018. 
redemption  after  foreclosure,  1015,  1348. 
statute  of  limitations,  four  years,  1193. 
mortgage  burred  when  debt  barred,  1207. 
statutory  provisions  relating  to  foreclosure,  1348. 
power  of  sale  mortgages  and  trust  deeds  in,  1748. 
NEW  HAMPSHIRE,  nature  of  a  mortgage  in,  42. 
vendor's  lien  in,  191. 
parol  evid(!nce  to  show  a  mortgage,  307. 
mortgage  for  future  advances  in,  366. 
mortgage  for  support,  how  regarded,  388. 
provisions  respecting  registration  in,  508. 
provisions  respecting  mechanics'  liens  in,  508. 
usury  in,  633. 

assignment  of  debt  passes  mortgage,  817. 
entry  of  satisfaction  of  record,  1019. 
redemption  after  entry  to  foreclose,  1051,  1349. 

773 


INDEX. 

Reference  Is  to  Sections. 

NEW  riAMrsiIIKK  — r,)//////^W. 

statute  of  liinitiitious,  twenty  years,  ir.)3. 

provisions  for  foreclosure  by  entry  and  possession,  1241-1243. 

writ  of  entry  to  foreclose  niortoaije,  1278. 

statutory  provisions  relating  to  foreclosure,  1349. 

power  of  sale  mortgages  and  trust  deeds  in,  1749. 
NEW  JP:RSEY,  nature  of  a  mortgage  in,  43. 

vendor's  lien  adopted  in,  191. 

parol  evidence  to  show  a  mortgage,  308. 

provisions  respecting  registration  in,  509, 

provisions  respecting  mechanics'  liens  in,  509. 

usury  in,  G33. 

rules  as  to  tender  of  payment  in,  892. 

entry  of  satisfaction  of  record,  1020. 

no  redemption  after  foreclosure,  1051,  1350. 

when  right  to  redeem  barred  in,  1145. 

statute  of  limitations,  twenty  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1350. 

power  of  sale  mortgages  and  trust  deeds  in,  1750. 
NEW  MEXICO  TERRITORY,  nature  of  a  mortgage  in,  43  a. 

provisions  as  to  registration  in,  510. 

provisions  respecting  mechanic's  liens  in,  510. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1021. 
NEW  PARTIES  may  be  joined  in  foreclosure  suit,  1442. 
NEW  PROMISE  to  take  mortgage  out  of  statute  of  limitations,  1196. 
NEW  YORK,  nature  of  a  mortgage  in,  44. 

vendor's  lien  adopted  in,  191. 
not  assignable,  212. 

parol  evidence  to  show  a  mortgage,  309. 

record  of  assignment  not  notice  to  mortgagor,  473. 

provisions  respecting  mechanics'  liens  in,  511. 

usury  in,  G33. 

assignment  of  debt  passes  mortgage  in,  817. 

tender  of  payment  discharges  debt  in,  893. 

entry  of  satisfaction  of  record,  1 022. 

no  redemption  after  foreclosure,  1051,  1351. 

redemption  liarred  in  ten  years  in,  1147. 

statute  of  limitations,  twenty  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1351. 

strict  foreclosure  in,  1551. 

power  of  sale  mortgages  and  trust  deeds  in,  1751. 
774 


INDEX. 
Reference  is  to  Sections. 

NORTH   CAROLINA,  nature  of  a  mortgage  in,  45. 
written  authority  to  fill  blanks,  90. 
vendor's  lien  denied  in,  191. 
parol  evidence  to  show  a  mortgage,  310. 
provisions  respecting  registration  in,  512. 
provisions  respecting  mechanics'  liens  in,  512. 
doctrine  of  notice  under  the  registry  laws,  573. 
usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 
entry  of  satisfaction  of  record,  1023. 
no  redemption  after  foreclosure,  1051,  1352. 
when  right  to  redeem  barred  in,  1145. 
statute  of  limitations,  ten  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1352. 
strict  foreclosure  in,  1552. 

power  of  sale  mortgages  and  trust  deeds  in,  1752. 
NOTE  secured  construed  with  mortgage,  71. 

parol  evidence  to  identify,  71,  352. 

secured  by  express  lien,  order  of  payment,  236. 

description  of  all  particulars  not  necessary,  350. 

is  evidence  of  amount  of  debt,  351. 

not  essential  to  a  mortgage,  353. 

renewal  does  not  affect  security,  355. 

assignment  of  mortgage  without,  804—807,  817-822. 

negotiable  before  due  not  subject  to  equities,  834. 
overdue  subject  to  equities,  841. 

substituted  in  place  of  original  note  secured,  925-927. 

incorporating  additional  loan  in  new  note,  930. 

new  note  for  different  amount,  931. 

new  note  for  interest,  932. 

consideration  of  new  note,  933. 

renewal  of  note  for  which  mortgage  is  indemnity,  934. 

surrender  of,  983. 

should  be  produced  in  foreclosure  suit,  1308. 

renewal  of  should  be  alleged  in  bill  to  foreclose,  1468. 

proof  of  in  foreclosure  suit,  11 69. 
NOTICE,  of  partnership  equities,  119. 

of  vendor's  lien,  204. 

by  recitals  in  deed,  205. 

purchase  without,  200. 

of  separate  defeiisance  by  record,  254. 
by  possession,  255,  GOO. 

775 


INDKX. 
Reference  is  to  Sections. 

NOTICE  —  coftdniird. 

by  registration,  456-569. 

takes  effect  from  filing  deed  for  record,  542. 
record  is  constructive,  557. 

of  contents  of  deed,  557-563. 
subsequent  records  are  not,  to  prior  mortgagee,  562,  723. 
As  affecting  priority,  570-609. 

under  the  registry  acts,  507-577. 
ground  of,  570. 
policy  of,  571. 
doctrine  of,  572. 
exception  in  some  states,  573. 
practical  effect  of,  574. 
examination  of  record,  576. 
of  secret  trust,  577. 
different  kinds  of,  578. 
Actual,  579. 

degrees  of  actual,  580. 

has  effect  if  received  before  completion  of  trade,  581. 
one  with,  may  acquire  good  title  from  one  without,  582. 
one  without,  may  require  good  title  from  one  with,  583. 
Implied,  584-590. 

notice  to  principal,  from  notice  to  agent,  584. 
upon  what  principle  doctrine  rests,  585. 
must  be  in  same  transaction,  586. 
must  be  matter  material  to  transaction,  587. 
when  agent  is  employed  by  both  parties,  588. 
when  agent  is  a  party,  589. 
Constructive,  591-598. 

is  imputed  on  ground  of  fraud  or  negligence,  592. 
of  existence  of  lien  without  particulars,  593. 
from  recitals  in  deeds,  594. 

recital  that  premises  are  subject  to  a  mortgage,  595. 
what  sufficient  to  put  upon  inquiry,  596. 
from  conveyance,  subject  to  mortgage,  597. 
Lis  pendens,  what  is,  599. 
possession  is,  how  far,  GOO. 

occasional  or  temporary,  601. 
what  affects  mortgagee,  723. 
assignee  should  give  notice  to  mortgagor,  791. 
of  payment  not  required,  890,  1071. 
of  foreclosure  sale  under  decree  of  court,  1612. 
776 


INDEX. 

Reference  is  to  Sections. 

NOTICE  —  continued. 

want  of,  under  power,  no  ground  for  enjoining  sale,  1810. 
Personal  of  sale  under  poiver.    (See  Power  of  Sale  Mortgages, 

&c.,  1821-1827.) 
Under  power  of  sale,  publication  of,  1828-1839. 
what  notice  should  contain,  1839-1856. 

OHIO,  nature  of  a  mortgage  in,  46. 

written  authority  to  fill  blanks,  90. 
vendor's  lien  adopted  in,  191. 

not  assignable,  212. 
parol  evidence  to  show  a  mortgage,  311. 
provisions  respecting  registration  in,  513. 
provisions  respecting  mechanics'  liens  in,  513. 
doctrine  of  notice  under  the  registry  laws,  573. 
usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 
entry  of  satisfoction  of  record,  1024. 
no  redemption  after  foreclosure,  1051. 
statutory  provisions  relating  to  foreclosure,  1353. 
strict  foreclosure  in,  1553. 

power  of  sale  mortgages  and  trust  deeds  in,  1753. 
ONCE  A  MORTGAGE  ALWAYS  A  MORTGAGE,  7,  340. 

when  rule  not  applicable,  247. 
OPENING  BIDDINGS  at  foreclosure  sale,  1640. 
ORDER  OF  SALE.      (See  Inverse  Order  of  Sale,  1091,  1092, 
1620-1632.) 
decree  should  provide  for,  1576, 
OREGON,  nature  of  a  mortgage  in,  47. 
vendor's  lien  adopted  in,  191. 

record  of  assignment  not  notice  to  mortgagor,  473. 
provisions  respecting  registratioif  in,  514. 
provisions  respecting  mechanics'  liens  in,  514. 
usury  in,  633. 

entry  of  satisfaction  of  record,  1025. 
redemption  after  foreclosure,  1051,  1354. 
statutory  provisions  relating  to  foreclosure,  1354. 
power  of  sale  mortgages  and  trust  deeds  in,  1754. 
OVERPAYINIKNT,  may  be  recovered,  903. 
to  prevent  foreclosure,  1085. 

PARCELS.     (See  Sai.k,  1616-1619.) 

777 


IXDFX. 
Reference  is  to  Sections. 

PAROL   AGKKKMKNT  to  vary  terms,  i)0. 
PAROL  AUTIIOIUTY  to  till  blanks,  00,  OL 
PAROL  EVIDENCE,  as  to  existence  of  vendor's  lien,  196. 
to  connect  deed  and  separate  defeasance,  248. 
to  show  a  conditional  sale,  "111. 
To  prore  (tn  absolute  deed  a  mortgage,  282-342. 
there  must  be  equitable  (^rounds,  283. 
the  doctrine  in  England,  284. 
the  doctrine  in  the  United  States  courts,  285. 
the  doctrine  in  the  several  states,  286-321. 
fraud,  accident,  and   mistake,  as  grounds  for  admission  of, 

321. 
intention  as  ground  for  admission  of,  321. 
the  statute  of  frauds  does  not  stand  in  way,  322. 
grantor  not  estopped  to  show  character  of  conveyance,  323. 
what  facts  are  considered,  324. 
evidence  of  continuance  of  debt,  325. 
when  there  was  a  preexisting  debt,  326, 
when  application  was  for  a  loan,  327. 
continued  possession  of  grantor,  328. 
inadequacy  of  price,  329. 
strict  proof  required,  335. 
To  identify  note  secured,  71,  352. 

to  fix  amount  secured  by  indemnity  mortgage,  384. 
that  an  assignment  was  intended  as  a  discharge,  861. 
does  not  affect  mortgagee's  lien  upon  residue,  722. 
effect  of  as  to  subsequent  purchasers,  723. 
effect  of  as  to  surety,  724,  726. 
PARTIAL  PAYMENTS,  provision  for,  79. 

application  of,  to  usurious  mortgage,  012. 
PARTIAL  RELEASE,  covenant  to  make,  effect  of,  79,  981. 

effect  when  mortgagee  has  notice  of  subsequent  incumbrances, 
982. 
PARTIES  to  a  mortgage,  description  of,  63. 
who  may  make  a  mortgage,  102. 

to  what  proceedings  mortgagee  an  essential  party,  709. 
To  a  hill  to  redeem,  1007-1103. 
PARTIES   TO  AN   EQUITABLE    SUIT  FOR  FORECLOSURE, 
general  principles,  1369. 
Proper  parties  plaintiff,  13G8-1303. 

all  interested  in  mortgage  should  be,  1368. 
joinder  of  plaintiffs,  1369. 
778 


INDEX. 
Reference  is  to  Sections. 

PARTIES  TO  AN  EQUITABLE  SUIT,  ^TC— continued. 
real  party  in  interest,  1370. 
must  have  some  interest,  1371. 
assignee  bj'  informal  assignment,  1372. 
after  absolute  assignment,  1373. 
after  assignment  as  collateral,  1374. 
assignee  for  collateral  security,  1375. 
assignee  of  mortgage  without  bond  or  note,  1376. 
assignee  of  mortgage  note,  1377. 
holder  of  one  of  several  notes  secured,  1378. 
partner,  1379.  , 

surety,  1380. 
joint  mortgagee,  1381. 
survivor  of  joint  mortgagees,  1382. 
nominal  trustee,  1383. 
Cestui  que  trust,  1384. 

bondholders,  1385. 

trustee  for  creditors,  1386. 

executor  or  administrator  of  mortgagee,  1387,  1388. 

foreign  executor  or  administrator,  1389. 

mortgage  to  executor,  1390. 

holder  of  two  or  more  mortgages,  1391. 

mortgage  to  person  in  official  capacity,  1392. 

wife  holding  mortgage  as  her  separate  property,  1393. 
Necessary  or  proper  parlies  defendant,  1394-1442. 

general  principles,  1394. 

omission  of  party  in  interest  does  not  make  sale  void,  1395. 

all  persons  in  interest  should  be  joined,  1396. 

trustees  and  beneficiaries,  1397. 

when  beneficiaries  are  numerous,  1398. 

trustee,  1399. 

equitable  interest,  1400. 

remainder-men,  1401. 

mortgagor  a  necessary  party,  1 402. 

when  he  retains  any  interest,  14<»3. 

when  not  a  necessary  party,  1401. 

when  he  has  conveyed  a  portion  of  the  premises,  1405. 

holder  of  equity  of  redemption  a  necessary  party,  1406. 

purchaser  who  has  assumed  a  mortgage,  1407. 

mesne  purchaser,  1  40H. 

tenants  in  common,  1409. 

objection  to  nonjoinder  when  taken,  1410. 

779 


IXDKX. 
Refereiico  is  to  Sections. 

PARTIES  TO  AN  EQUITABLE  SUIT,  ETC.  — continued. 

yturchnscr  pendente  lite,  1111. 

when  deed  to  purchaser  has  not  been  recorded,  1412. 

a  more  occupant,  1413. 

heirs  of  niort<j;agor,  1414,  1417. 

heir  of  purchaser,  1415. 

heirs  of  partner,  1410. 

devisees,  1 4 1 S. 

legatees,  1410. 

mortgagor's  wife,  1420. 

when  \Yife  did  not  join  in  mortgage,  1421. 

when  there  is  no  dower,  1422. 

wife's  homestead,  1423. 

husband,  1424. 

all  subsequent  mortgagees,  1425. 

mortgagee  who  has  assigned  without  the  note,  1426. 

assignee  of  note,  1427. 

personal  representative  of  junior  mortgagee,  1428. 

parties  who  make  default  cannot  complain,  1429. 

junior  mortgagee  who  has  received  payment,  1430. 

redemption  only  remedy  of  one  not  made  a  party,  1431. 

guarantor  not  a  proper  party,  1432,  1433. 

indorser  of  note,  1434. 

joint  mortgagees,  1435. 

judgment  creditors,  1436. 

judgment  after  decree,  1437. 

bankruptcy  as  affecting,  1438. 

prior  parties  in  interest,  1439. 

adverse  claimants,  1440. 

priority  between  mortgages,  1441. 

new  parties,  1442. 
To  bill  for  strict  foreclosure,  1557. 

heirs  of  mortgagee  necessary  parties,  1559. 
PARTITION,  when  mortgagees  may  have,  705. 

between  mortgagors,  when  mortgagee  bound  by,  706. 
in  case  of  a  mortgage  of  one  of  several  parcels  held  in  common 
706. 
PARTNERSHIP  REAL  ESTATE,  mortgage  of,  119-123. 
mortgage  by  one  partner  of  his  interest,  1 20. 
mortgage  by  one  partner  for  partnership  debt,  121. 
mortgage  of  private  property  for  partnership  debt,  122. 
assignment  of  mortgage  by,  800. 
780 


INDEX. 
Reference  is  to  Sections. 
PART-OWNER  of  equity  of  redemption  may  redeem,  1063. 
PAYMENT,  produces  a  merger  when,  848-869. 

by  one  who  has  assumed  the  mortgage,  865. 

by  one  who  has  warranted  against  incumbrances,  867. 

by  purchaser  of  equity  of  redemption,  869. 

by  one  not  under  obligation  to  make  it  operates  as  subrogation, 

877. 
by  mortgagee  for  his  own  protection  subrogates  him,  878. 
at  the  law  day  discharges  the  incumbrance,  886. 

and  revests  the  estate,  887. 
cannot  be  enforced  before  the  law  day,  888. 
after  condition  broken  does  not  revest  the  estate,  889. 
notice  of,  required  by  custom  in  England,  890,  1071. 

but  not  in  this  country,  890. 
of  more  than  is  due  may  be  recovered,  903. 
Appropriation  of,  904-912. 
of  intention,  904. 

deposit  of  amount  without  appropriation,  905. 
debtor  may  appropriate  to  any  account,  906. 
when  presumed  to  be  made  on  mortgage  debt,  907. 
when  creditor  may  make  appropriation,  908. 
appropriation  binding  on  subsequent  incumbrancers,  908. 
what  is  a  sufficient  appropriation,  909. 
agreement  to  apply  in  discharge  of  a  portion  of  the  land, 

909  a. 
appropriation  of  insurance  money,  910. 
interest  to  be  paid  first,  911. 
upon  usurious  mortgage,  912. 
Presumption  and  evidence  of  payment,  913-918. 
from  possession  of  mortgage  note,  913. 
from  conduct  of  mortgagee,  913. 
presumption  of  payment  of  interest,  914. 
presumption  from  lapse  of  time,  915. 
presumption  from  shorter  period  than  twenty  years,  916. 
is  a  ([uestion  of  fact,  917. 
indorscnients  are  admissions,  918. 
By  acconntiny  as  administrator,  919-923. 

when  mortgagor  comes  into  possession  of  mortgage,  919. 
mortgagor's  dealing  with  the  mortgage,  920. 
purcliase  of  mortgage  by  executor,  '.>21. 
mortgagee  administrator  of  mortgagor's  estate,  922. 
bond  by  heir  to  pay  debt,  92.'>. 

781 


INDEX. 
Ilcfeieiice  is  to  Sections. 

PAYMENT  —  cotitiinied. 

C/iaii(/cs  in  jhnii  of  debt,  02  1-9 12. 

no  change  in  form  discharges,  924. 

new  note  not  a  discharge  as  to  subsequent  purchaser,  925. 

intention  generally  controls,  92G. 

intention  a  question  of  fact,  926. 

substitution  of  another  note,  927. 

giving  up  of  bond  of  defeasance,  928. 

taking  further  security,  929. 

incorporating  additional  loan  in  new  note,  930. 

new  note  for  different  amount  payable  at  a  different  time, 
931. 

new  note  for  interest,  932. 

consideration  of  new  note,  933. 

renewal  of  note  for  which  mortgage  is  indemnity,  934. 

dishonored  check  or  bill  of  exchange,  935. 

merger  in  judgment  does  not  extinguish,  936. 

judgment  for  a  portion  of  the  debt,  937. 

judgment  under  trustee  process,  938. 

proceedings  against  mortgagor  personally,  939. 

release  of  judgment,  940. 

failure  to  charge  in  dower,  941. 

extension  of  time  of  payment,  942. 
Revivor  of  mortgage,  943-949. 

mortgage  hQcorx\Q&  functus  officio  after,  943. 

when  the  rights  of  third  persons  have  not  intervened,  944. 

assignment  to  third  person  at  request  of  mortgagor,  945. 

redelivery  of  note,  946. 

same  formalities  necessary  as  in  first  instance,  946. 

verbal  agreement  to  continue  for  another  debt,  947. 

as  against  other  parties  in  interest,  948. 

as  against  wife  when  she  is  surety,  949. 
Foreclosure  does  not  constitute,  950-955. 

mortgagee  may  recover  any  balance,  950. 

whether  the  foreclosure  is  strict  or  not,  950. 

release  of  equity  of  redemption  to  mortgagee,  951. 

when  foreclosure  is  by  entry  and  possession,  952. 

foreclosure  sale  is  payment  pro  tanto,  953. 

when  the  sale  is  voidable,  953. 

purchase  of  equity  by  mortgagee  on  execution,  954. 

purchase  under  tax  sale  by  mortgagor,  955. 
782 


INDEX. 

Reference  is  to  Sections. 

PAYMENT  —  continued. 

Who  may  receive  payment,  956-965. 

the  person  to  whom  the  debt  is  due,  956. 

note  or  bond  should  be  produced,  956. 

discharge  by  person  not  entitled  to  make,  957. 

■when  mortgage  is  held  by  two  or  more  jointly,  958. 

one  of  two  executors  may  receive,  959. 

trustees  must  generally  act  jointly,  959. 

whether  foreign  executor  can  make  valid  discharge,  960. 

an  assignee  of  mortgage  may  receive,  961. 

mortgagee  after  assignment  cannot  receive,  961. 

equitable  assignee  may  receive,  962. 

one  holding  mortgage  as  collateral  may  receive,  963. 

agency  inferred  from  possession  of  securities,  964. 

when  attorney  is  authorized  to  receive,  964. 

receiver  may  take  payment,  965. 
Discharge  hy  release  or  of  record^  970-991. 

after  payment  mortgagee  holds  title  in  trust,  973. 

general  release  from  all  claims,  976. 

release  may  be  limited,  980. 

effect  of  partial  release,  982. 

personal  liability  may  be  released,  983. 

release  of  security  not  necessarily  a  release  of  the  debt,  984. 

release  wrongfully  obtained,  987. 
presumption  of  payment  after  twenty  years,  1192. 
presumption  of,  repelled  how,  1196-1202. 
discharges  both  lien  and  debt,  1219. 

foreclosure  by  entry  and  possession  is  payment  ^;ro  tanto,  1264. 
a  defence  to  foreclosure,  1298. 
strict  foreclosure  does  not  work,  1567. 
from  proceeds  of  foreclosure  sale,  1682-1708. 
PENNSYLVANIA,  nature  of  a  mortgage  in,  48. 
authority  to  fill  blanks,  90. 
vendor's  lien  denied  in,  191. 
parol  evidence  to  show  a  mortgage,  312. 
mortgage  for  support  how  regarded,  388. 
record  of  assigmucnt  is  notice  in,  472. 
provisions  respecting  registration  in,  515. 
provisions  respecting  mccliaiiics'  lions  in,  515. 
usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 
entry  of  satisfaction  of  record,  102G. 

783 


INDKX. 
Referciioo  is  to  Sectioiis. 

PENNSYr>VANIA  —  cou({,tuv,l. 

rciloinption  after  foreclosure,  1(151,  l.']^/). 
statute  of  limitations,  twenty-one  years,  1143. 
statutory  provisions  relating  to  foreclosure,  1355. 
power  of  sale  mortgages  and  trust  deeds  in,  1755. 
PLEADINGS  AND  PRACTICE,  in  bills  to  redeem,  1093-1113. 
in  writ  of  entry  to  foreclose,  1293-1295. 
in  equitable  suit  to  foreclose,  1451-1515. 
POSSESSION  of  mortgagor  how  far  notice,  255. 
in  general  how  far  notice,  600. 
temporary  or  equivocal  not  notice,  GOl. 
Mortgagors  right  of\  80,  664. 

as  against  mortgagee,  667. 

may  be  implied,  668.  • 

modified  by  statute,  669. 
not  adverse  to  mortgagee,  672. 
remedy  to  recover  of  mortgagee,  673. 
■when  mortgagee  entitled  to,  702,  703. 
mortgagee  cannot  before  payment  be  divested  of,  715. 
mortgagee  obtaining,  may  retain,  716. 
otherwise  in  Michigan,  717. 
mortgagee  may  maintain  writ  of  entry  for,  718. 
of  mortgagor  does  not  prevent  assignment,  789. 
of  mortgagor  presumed  to  be  subordinate,  1211. 
delivery  of  under  decree  of  strict  foreclosure,  1562. 
delivery  of  to  purchaser  under  foreclosure  sale,  1663-1667. 
POWER  OF  ATTORNEY  to  execute  a  mortgage,  129. 

whether  general  power  authorizes  power  of  sale  mortgage,  129. 
how  exercised  in  making  a  mortgage,  130. 
requirement  that  power  be  recorded,  547. 
when  it  operates  as  an  assignment  of  mortgage,  816. 
POWER  OF  SALE  IN  MORTGAGES  AND  TRUST  DEEDS. 
May  be  conferred  by  statute,  61. 

whether  authorized  under  a  general  power  to  mortgage,  129. 
passes  by  an  equitable  assignment  of  mortgage,  826. 
need  not  be  exercised  before  suit  for  debt,  1221. 
Statutory  provisions  concerning,  1722-1763. 

statutory  power  of  sale  in  England,  1722. 

in  Virginia,  1722, 
provisions  in  the  several  states,  1723-1763. 
Nature  and  use  of  powers  of  sale,  1764—1772. 

advantages  over  foreclosure  in  equity,  1764. 
784 


INDEX. 

0 

Reference  is  to  Sections. 
POWER  OF  SALE  IN  MORTGAGES,  ETC.  — cow^m wee?, 
validity  of,  questioned  in  early  cases,  1765. 
regarded  in  England  as  a  necessary  incident,  1766. 
when  first  used  in  this  country,  1767. 
whether  a  necessary  incident  of  a  mortgage,  1768. 
deeds  of  trust  iu  legal  effect  mortgages,  1769. 
why  preferred  by  some,  1770. 
trustee  in,  is  agent  of  both  parties,  1771. 
debt  belongs  to  beneficiary,  1772. 
Power  of  sale  a  cumulative  remedxj,  1773-1776. 

does  not  exclude  foreclosure  in  equity,  &c.,  1773. 
court  of  equity  may  enforce  trust  deed,  1774. 
sale  is  by  virtue  of  the  power,  not  of  the  decree,  1775. 
when  debt  is  unliquidated,  1776. 
Construction  of  power,  1777-1791. 

power  may  be  in  form  of  power  of  attorney,  1777. 

parties  may  make  such  regulations  as  they  desire,  1778. 

what  is  a  sufficient  power,  1779. 

acceptance  of  trus,t  1780. 

obvious  error  on  face  of  power,  1781. 

prior  entry  when  necessary,  1782. 

prior  entry  does  not  prevent  sale,  1783. 

record  of  mortgage  or  power,  1784. 

who  may  exercise  power,  1785. 

may  be  executed  by  administrator  of  mortgagee,  1786. 

legal  assignment  of  mortgage  passes  the  power,  1787. 

otherwise  with  deed  of  trust,  1788. 
equitable  assignee  cannot  execute  power,  1789. 
power  to  two  or  more  jointly  must  be  executed  by  all,  1790. 
a  first  and  second  mortgagee  may  concur  in  sale,  1791. 
Revocation  and  suspension  of  power,  1792-1800. 
death  of  mortgagor  does  not  revoke,  1792. 
power  is  coupled  with  an  interest,  1792. 
insanity  of  mortgagor  does  not  revoke,  1793. 

rule  the  same  where  the  mortgage  is  a  mere  security, 
1794. 
•     may  be  modified  and  extended  without  revoking,  1795. 
conveyance  by  mortgagee  of  part  of  premises,  1796. 
pendency  of  bill  to  redeem  docs  not  suspend,  1797. 
tender  after  breach  does  not  defeat,  1798. 
rule  in  England  as  to,  1799. 
rule  in  New  York  as  to,  1799. 
VOL.  n.  50  785 


INDEX. 

Krfen'iu'e  is  lo  Sections. 

row  Ell  OF  SALK  IN  MORTGALJES,  ETC. —  continued. 

payment  does  not  prevent  sale,  1799, 

not  sus|KMuled  when   mortgagor  within   tlie  lines  of  enemy, 
1800. 
When  the  exei-ci'se  of  the  poioer  may  he  enjoined,  1801—1820. 

a  legitimate  exercise  of  the  power  cannot  be  enjoined,  1801. 

exercise  of  power  at  request  of  mortgagor,  1802. 

use  of  the  power  to  obtain  an  unfair  advantage,  1803. 

grounds  of  interference  must  be  alleged,  1804. 

petitioner's  rights  must  be  clear,  1805. 

payment  must  be  tendered,  1806. 

when  mortgage  was  void  in  its  inception,  1807. 

on  account  of  usury,  1808. 

of  unconscionable  penalty  or  interest,  1809. 

want  of  notice  of  sale  no  ground  for  enjoining,  1810. 

not  to  allow  set-off,  1811. 

not  to  allow  time  for  contribution  to  redeem,  1812. 

when  amount  of  debt  is  in  dispute,  1M3. 

purchaser  subject  to  mortgage  ignorant  of  power  in  it,  1814. 

clouding  title,  1815. 

insolvency  of  trustee  no  ground,  1816. 

scarcity  of  money  or  business  depression  no  ground,  1817. 

appointment  of  referee  to  act  with  mortgagee,  1818. 
recovery  of  money  paid  under  duress,  1819. 
mortgagee's  damages  and  costs  when  wrongly  enjoined,  1820. 
Personal  notice  of  sale,  1821-1827. 

no  notice  necessary  unless  made  so  by  statute  or  deed,  1821. 

all  essential  requisites  of  power  must  be  complied  with,  1822. 

when  mortgagor  is  under  disability,  1H23. 

mortgagor  cannot  waive  notice  for  others,  1824. 

promise  of  mortgagee  not  to  sell  without  notice,  1825. 
ground  for  setting  aside  sale,  1826. 

burden  of  proof  as  to  notice,  1827. 
Publication  of  notice,  1828-1838. 

for  a  certain  time  in  newspaper  usually  required,  1828. 

statutes  do  not  apply  beyond  the  states  enacting  them,  1829. 

fairness  in  giving  notice  required,  1830. 

notice  publisiied  before  defimlt  ineffectual,  1831. 

assignment  of  mortgage  during  time  of  advertisement,  1832. 

change  of  statute  as  to  length  of  notice,  1833. 

how  long  after  publication  sale  may  be,  1834. 

selection  of  newspaper,  1835. 
786 


INDEX. 
Reference  is  to  Sections. 

POWER  OF  SALE  IN  MORTGAGES,  ETC.— contt7med, 

publication  in  two  counties,  1836. 

posting  in  public  places,  1837. 

length  of  time  of  publication,  1838. 

once  a  week  for  three  successive  weeks,  1838. 
WTiat  the  notice  should  contain,  1839-1856. 

should  fully  comply  with  the  terms  of  power,  1839. 

must  describe  the  premises,  1840. 

description  by  reference  to  plan,  1840. 

distinct  lots  should  be  described  separately,  1841. 

short  and  incomplete  description,  1842. 

must  show  who  orders  the  sale,  1843. 

need  not  name  owners  of  equity  of  redemption,  1844. 

must  specify  time  and  place  of  sale,  1845. 

discretion  as  to  the  time,  place,  and  terms  of  sale,  1846. 

day  of  sale  fixed  for  Sunday,  1847. 

sale  at  ruins  of  court-house  in  Chicago,  1848. 

sale  at  temporary  court-house,  1849. 

sale  at  city  hall,  1850. 

mistake  in  advertisement,  1851. 

misleading  notices,  1852. 

change  in  time  appointed  for  sale,  1852. 

sale  of  equity  of  redemption,  1853. 

unimportant  omissions,  1854. 

statement  of  the  amount  claimed,  1855. 

amount  of  prior  mortgage  need  not  be  stated,  1856. 
Sale  in  parcels,  1857-1860. 

no  obligation  except  under  statutes  and  special  equities,  1857. 

when  sale  of  property  entire  not  justified,  1858. 

when  trustee  should  sell  in  parcels,  1859. 

sale  of  sufficient  only  to  pay  the  debt,  1860. 
Conduct  of  sale,  terms  and  adjournment,  1861-1875. 

mortgagee  may  act  by  attorney,  1861. 

need  not  be  personally  present,  1861. 

trustee  under  deed  of  trust  should  be  present,  1862. 

when  sale  may  be  had,  1863. 

terms  of  sale,  1H61. 

acquiescence  of  mortgagor  in  conduct  of  sale,  1865. 

I)ayment  at  time  of  sale,  1866. 

time  for  examination  of  title,  1867. 

giving  credit,  1868. 

when  terms  of  sale  not  prescribed  by  power,  1860. 

787 


IN'Dl'A'. 
Refereiloe  is  to  Soclioiis. 
POWER  OF  SALE  IN  IMOinXJAGES,  YAV.  —  contimted. 

when  mortgagee  may  use  his  discretion,  1870. 

mortgagee  may  give  credit,  taking  the  risk  liimself,  1871. 

when  mortgagee  aiitliorized  to  sell  for  cash  or  credit,  1872. 

adjournment,  1S73. 

uotice  of  adjournment,  1874. 

no  obligation  to  delay  sale  to  more  favorable  time,  1875. 
Who  muy  purc/ntse  ut  sale,  187G-1888. 

mortgagee  not  allowed  to  purchase,  1876. 

not  necessary  to  show  fraud  in  mortgagee's  purchase,  1877. 

rule  applies  to  mortgagee's  solicitor,  1878. 

mortgagee's  agent,  1879. 

trustee  in  deed  of  trust  cannot  buy,  1880. 

less  strictness  in  case  of  mortgagee,  1881. 

no  restraint  when  sale  is  by  judicial  process,  1882. 

express  provision  that  mortgagee  may  purchase,  1883. 

rule  has  no  application  to  subsequent  mortgagee,  1884. 

right  to  avoid  sale  waived  by  delay,  1885. 

right  lost  after  transfer  to  land  fide  purchaser,  1886. 

mortgagor  may  purchase,  1887. 

mortgagor's  wife  may  purchase,  1888. 
Deed  and  tiile,  1889-1903. 

holder  of  legal  title  should  make  deed,  1889. 

married  woman  may  make  deed,  1890. 

deed  in  name  of  mortgagor  or  mortgagee,  1891. 

mortgagee  purchasing  may  deed  to  himself,  1892. 
no  deed  required  in  New  York,  1893. 

title  passes  by  delivery  of  deed,  1894. 

deed  not  evidence  of  recitals  in  it,  1895. 

deed  to  person  other  than  purchaser,  1896. 

purchaser  takes  divested  of  subsequent  incumbrances,  1897. 

bona  fide  purchaser  acquires  valid  title,  1898. 
though  mortgage  has  been  paid,  1898. 

title  not  affected  by  prior  agreements  of  parties,  1899. 

in  England  not  bound  to  inquire  as  to  regularity  of  sale,  1900. 

mortgagor's  covenant  for  further  conveyance,  1901. 

invalid  sale  operates  as  assignment,  1902. 

remedy  against  purchaser  declining  to  complete  sale,  1903. 
The  affidavit,  1904,  1905. 

neglect  to  file  does  not  invalidate  sale,  1904. 

what  is  requisite  to  make  it  presumptive  evidence,  1905. 
iSetting  aside  and  waiving  sale,  190G-1922. 
788 


INDEX. 
Reference  is  to  Sections. 

POWER  OF  SALE  IN  MORTGAGES,  F.TC.  —  co7itmued. 

fairness  in  the  exercise  of  the  power  required,  1906. 

whether  sale  void  or  voidable,  1907. 

without  leave  of  bankrupt  court,  1908. 

allowing  property  to  be  sacrificed,  1909. 

avoided  by  secret  arrangement  to  prevent  competition,  1910. 

fraud  or  deception  practised  upon  owner,  1911. 

conduct  of  purchaser  at  sale,  1912. 

purchaser  knowing  of  circumstances  invalidating,  1913. 

purchase  by  agent  without  authority,  1914. 

mere  inadequacy  of  price  not  alone  ground  for,  1915. 

waived  by  extinguishing  time  of  redemption,  1916. 

promise  to  allow  mortgagor  to  repurchase,  1917. 

suit  for  second  instalment  does  not  open,  1918. 

subsequent  entry  to  foreclose  does  not  open,  1919. 

waived  by  agreement,  1920. 

relief  must  be  sought  in  equity,  1921. 

delay  in  seeking  relief,  1922. 
Costs  and  expenses,  1923-1926. 

mort^^agee  not  generally  entitled  to  compensation,  1923. 

reasonable  expenses  incurred  in  advertising,  1924. 

expenses  for  legal  advice,  1925. 

costs  under  sale  by  order  of  court  in  bankruptcy,  1926. 
The  surplus,  1927-1939. 

generally  mortgage  provides  for  disposal  of,  1927. 

not  chargeable  with  interest  when  unproductive,  1928. 

must  be  applied  according  to  title,  1929.  . 

notice  of  claims  to,  1930. 

whether  heir  or  administrator  entitled  to,  1931. 

in  case  of  bankruptcy,  1932. 

dower  in  surplus,  1933. 

wlien  equity  attached  or  sold  on  execution,  1934. 

judgment  lien  upon,  1935. 

wlien  mortgagor  has  conveyed  part,  1935. 

when  sale  was  for  an  instalment,  1930, 

payment  of  wliolc  del)t  on  sale  for  instalment,  1937. 

when  only  part  of  debt  has  matured,  1938. 

rights  determined  in  suit  lor  money  had  and  received,  1939, 
Judgment  for  drjiciencij  after  sale,  V121 . 
POWER  TO  iMORTGAGE,  a  power  to  sell  does  not  include,  J  29. 
includes  power  to  make  mortgage  in  usual  terms,  129. 
mode  of  exercising,  130, 

7«9 


INDKX. 
Reference  is  to  Sections. 
PRACTICE.    (See  Plkahing  anu  Pkactick.) 
PREEMP  TOR  of  public  land  cannot  mortgage,  177. 
PREFERENCE,  mortgage  given  in  contrary  to  law,  629. 
PRESUMPTION  OF  PAYMENT.     (See  Paymknt,  913-918.) 
PRIOR  INCUMBRANCERS  cannot  properly  be  made  parties  to  fore- 
closure suit,  1439,  1445,  1474,  1589. 
PRIORITY  by  registration,  456,  569. 

once  gained  cannot  be  lost,  558. 

though  record  be  destroyed,  559. 

as  affected  by  notice,  570-609. 

doctrine  in  this  country,  572,  573. 

as  affected  by  fraudulent  concealment  of  incumbrance,  602. 
by  fraud  inducing  one  to  purchase  as  unincumbered,  603. 

as  affected  by  negligence,  604—606. 

as  between  holders  of  several  notes  secured,  606,  1699,  1939. 

as  between  individual  and  partnership  mortgages,  606. 

as  between  simultaneous  mortgages,  606. 

as  between  unrecorded  mortgages,  607, 

agreements  fixing  priority,  608. 

over  mechanic's  lien,  909. 

of  assignee  of  one  note,  822. 

between  mortgages  may  be  settled  in  foreclosure  suit,  1441. 

questions  of,  when  to  be  settled,  1610. 

between  holders  of  several  notes,  1699-1707,  1939. 

note  first  maturing  entitled  to,  1699. 

whether  priority  of  assignment  gives,  1701. 

may  be  fixed  by  agreement,  1702. 

when  whole  debt  becomes  due  upon  any  default,  1703. 

when  mortgage  secures  debts  due  to  different  persons,  1705. 

rights  of  sureties,  1706. 
PROMISSORY  NOTE,  not  subject  to  equities  in  hands  of  assignee, 
837. 

otherwise  when  over  due,  841. 
PROOF  of  note  in  foreclosure  suit,  1470. 

PURCHASE   INIONEY  MORTGAGE  has   priority  over  judgments, 
464-466. 

has  priority  of  homestead  rights,  466. 

simultaneous  mortgages  for,  567,  568. 

defence  of  outstanding  title,  1500. 

defence  is  founded  on  the  covenants,  1501. 

eviction  necessary  before  defence  will  avail,  1502. 

exceptional  cases,  1503. 
790 


INDEX. 
Reference  is  to  Sections. 

PURCHASE  MONEY  MORTGAGE  — cotitinued. 
breach  of  covenant  of  seisin  in,  1504. 
breach  of  independent  covenant  in,  1505. 
when  sale  was  effected  by  vendor's  fraud,  1506. 
assignee  before  due  not  subject  to  this  default,  1507. 
application  of  proceeds  to  prior  incumbrance,  1698. 
PURCHASER,  a  mortgagee  is,  within  recording  acts,  458,  710. 
a  judgment  creditor  is  not,  460. 
may  rely  upon  title  as  it  appears  of  record,  549. 
of  timber  from  mortgagor  wrongfully  cut,  689. 
mortgagee  may  be,  of  equity  of  redemption,  711,  712. 
0/  the  equity  of  redemption,  his  rights  and  liabilities,  735-770. 

importance  of  reference  to  mortgage,  735. 

by  deed  without  covenants,  736. 

expressly  subject  to  mortgage,  736. 

not  entitled  to  collateral  security,  737. 

when  not  personally  liable  for  debt,  738. 

of  paramount  title,  739. 

assumption  of  mortgage  by,  740. 

mortgagor  becomes  surety  to,  741, 

extension  when  discharges  mortgagor,  742. 

assumption  of  proportionate  part  by,  743. 

cannot  defend  against  mortgage  assumed,  744. 

cannot  set  up  usury,  745. 

when  purchaser  may  contest  mortgage,  746. 

purchase  imder  execution,  747. 
Personal  liabtlitt/  of  purchaser,  748-770. 

none  under  deed  merely  subject  to  mortgage,  748. 

under  agreement  to  pay  the  mortgage,  749. 

under  verbal  promise  to  assume,  750. 

when  bound  to  indemnify  mortgagor,  751. 

bound  by  accepting  deed,  752. 

married  woman  assuming,  753. 

what  will  avoid  liability,  754. 

how  mortgagee  may  take  advantage  of  agreement  to  assume, 
75.0. 

junior  mortgagee  assuming  not  liable,  756. 

assumption  in  absolute  deed  which   is  in  fact   a  mortgage, 
757. 

promise  for  benefit  of  n)ortgagee,  758, 

mortgagee  may  sue  on  promise  without  foreclosure,  759. 

though  grantor  himself  not  liable  for  tlie  debt,  760. 

791 


INDEX. 
Reference  is  to  Set-lions. 

PURCHASER  —  continued. 

promise  must  be  express,  7G1. 

doctrine  of  New  York  courts  not  adopted  elsewhere,  762. 

whether  sjrantor  can  release  purchaser,  7()3. 

when  he  may  release  purchaser,  7G-1. 

condition  thai  grantee  pay  mortgage,  765. 

when  purchaser  entitled  to  a  release,  767. 

remedy  of  grantor  against,  768. 

contract  to  pay  a  mortgage  may  be  enforced  before  promisee 
has  paid  it,  769. 

measure  of  damages  in  action  by  grantor  against,  770. 

may  redeem,  1061. 
assuming  mortgage  cannot  set  up  statute  of  limitations,  1201. 
has  no  greater  rights  against  mortgagee  than  mortgagor  had,  1202. 
pendente  lite  need  not  be  made  party  to  foreclosure  suit,  1411. 
subject  to  mortgage  cannot  defend  against  it,  1491. 
rights  of  under  foreclosure  sale,  1642-1681. 

RAILROAD  COMPANY,  limitation  of  power  to  mortgage,  124,  125. 
when  mortgage  covers  after-acquired  property  of,  152,  154. 
after-acquired  property  not  essential  to  its  business,  156. 
after-acquired  property  passes  without  special  mention,  157. 
mortgage  of  future  earnings  of,  159. 
mortgage  does  not  cover  corporate  existence,  161. 
rolling  stock  of,  whether  covered  by  mortgage,  452. 
RATIFICATION  of  mortgage  irregularly  executed,  93. 

by  infant  mortgagor  on  coining  of  age,  105. 
RECEIVER,  may  discharge  mortgage,  965. 

When  a  receiver  will  be  appointed,  1516-1534. 

general  principles,  1516. 

when  appointed  on  application  of  mortgagor,  1517. 

appropriate  under  leasehold  mortgages,  1518. 

English  rule  as  to  appointment  of,  1519. 

rule  in  the  United  States,  1520. 

rule  in  New  York  and  other  states,  1521. 

statutory  provisions  in  several  states,  1522. 

when  subsequent  mortgagee  may  obtain  appointment,  1523. 

consent  of  prior  mortgagee,  1524. 

prior  mortgagee's  right  of  possession,  1525. 

when  application  may  be  made,  1526. 

defences  to  application,  1527. 

application  must  show  defendant  in  possession,  1528. 
792 


INDEX. 
Reference  is  to  Sections. 

RECEIVER,  continued. 

must  show  amount  of  mortgage  debt,  1529. 
mortgage  must  be  due,  1530. 
bill  must  be  pending,  1531. 

security  must  be  inadequate  and  mortgagor  insolvent,  1532. 
additional  grounds,  1533. 
criterion  of  adequacy,  1534. 
Duties  and  power  of  receiver,  1535-1537. 

represents  all  parties  in  interest,  1535. 
his  possession  is  that  of  the  court,  1535. 
his  claim  to  rents,  1536. 
payment  discharges,  1537. 
RECITAL  in  other  instruniet\ts  notice  by,  594. 
in  deed,  notice  by,  595. 

in  mortgage,  of  mortgagor's  indebtedness,  effect  of,  677,  678. 
RECORD.     (See  Registration.) 
of  separate  defeasance,  253. 

notice  furnished  by  the  record,  25. 
not  to  be  relied  upon  as  showing  merger,  872. 
when  averment  of  necessary,  14G5. 
REDELIVERY  of  mortgage  for  a  new  obligation,  362. 
REDEMPTION,  provisions  restraining,  6. 

mortgagor  cannot  renounce  beforehand,  251. 
of  mortgage  in  form  of  absolute  deed,  342. 
A  necessary  incident  of  a  mortgage,  1038-1046. 
express  stipulation  not  to  redeem,  1039. 
time  of  may  be  postponed,  1040. 
agreement  to  confine  to  a  particular  person,  1041. 
any  agreement  which  is  an  evasion  of,  1042. 
agreement  not  to  redeem  after  a  certain  day,  1043. 
mortgagee  not  allowed  to  obtain  an  advantage,  1044. 
subsequent  agreement  against,  1045. 
after  release  improperly  obtained,  1046. 
Circumstances  affecting,  1047-1051. 

after  imperfect  foreclosure,  1048,  1680. 
mortgagor  estopped  by  his  own  acts,  1049. 
of  one  only  of  several  mortgages,  1050. 
after  foreclosure  sale,  1051. 
given  by  statute  is  a  rule  of  j)roperty,  1051. 
When  it  may  be  made,  1052-1054. 

not  till  mortgage  is  due,  1052. 
when  time  has  been  extended,  1053. 

793 


INDEX. 

Reference  is  to  Sections. 

KEDEMPTION  —  confiuucL 

when  advaiitiifjo  must  be  taken  of  inomilar  foreclosure,  1054. 
Who  mot/  redeem.  105")-  10()'.». 

any  party  in  interest,  lOSf). 

a  mortgagor  who  has  conveyed  the  equity,  105G. 
a  mortgagor  after  foreclosure  by  junior  njortgagee,  1057. 
under  a  mortgage  for  supjiort,  1058, 
holder  of  mere  equitable  title,  1059. 
grantor  by  an  absolute  deed,  1060. 
purchaser  of  equity  of  redemption,  1001. 
heir  at  law  or  devisee,  10G2. 
part-owner  of  equity  of  redemption,  10G3. 
subsequent  mortgagee,  10G4. 

as  between  several  persons  entitled  to  redeem,  1064. 
tenant  for  life,  or  in  tail,  1065. 
tenant  for  years  10G6. 

dowress  who  has  released  in  the  deed,  10G7, 
tenant  by  the  curtesy,  10G7. 
holder  of  homestead  estate,  1067. 
a  surety  of  the  debt,  10G8. 
a  judgment  creditor,  1069. 
an  attaching  creditor,  1069. 
Sum  payable  to  effect  it,  1070-1088. 

payment  of  the  amount  due,  a  condition,  1070. 

notice  of  payment,  1071. 

must  be  of  entire  debt,  1072. 

after  bankruptcy,  1073. 

when  part  of  premises  has  been  foreclosed,  1074. 

after  a  foreclosure  sale,  1075. 

special  exceptions,  1076. 

when  part  only  of  debt  is  due,  1077. 

when  whole  debt  becomes  due  on  any  default,  1078. 

further  advances,  1079. 

prior  incumbrance  paid  by  mortgagee,  1080. 

payment  of  other  claims  cannot  be  made  a  condition,  1081. 

P^nglish  doctrine  of  tacking,  1082. 

consolidating  mortgages,  1083. 

costs  of  previous  foreclosure,  1084. 

overpayment  to  prevent  foreclosure,  1085. 

mortgagee  cannot  be  compelled  to  assign,  1086. 

otherwise  in  New  York,  1087. 
tender  after  breach  of  condition,  1088. 
794 


INDEX. 

Reference  is  to  Sections. 

REDEMPTION  —  continued. 

Contribution  to  redeem,  1089-1092. 

test  of  the  right  to  claim,  1089. 

the  general  rule  as  to,  1090. 

when  the  mortgagor  retains  part  of  the  premises,  1091. 

portions  sold  chargeable  in  inverse  order,  1092. 
Pleadings  and 'practice  on  hills  for,  1093-1113. 

bill  should  conform  to  general  principles  of  pleading,  1094. 

bill  must  tender  amount  due,  1095. 

after  payment  in  full,  1096. 

the  parties,  1097. 

proper  parties  plaintiff,  1098. 

heir  of  mortgagor,  1099. 

trustees  who  hold  equity  of  redemption,  1099. 

the  parties  defendant,  1100. 

after  death  of  mortgagee,  1101. 

when  junior  mortgagee  seeks  to  redeem,  1102. 

holder  of  note  without  mortgage,  1103. 

reference  to  state  account,  1104. 

defences,  1105. 

the  decree,  1106. 

decree  should  fix  time  for  redemption,  1107. 

failure  to  pay  decree  works  foreclosure,  1108,  1566. 

abandonment  of  suit,  1109. 

effect  of  redemption,  1110. 

general  ride  as  to  costs,  1111. 

costs  of  suit  brought  without  previous  tender,  1112. 

costs  after  refusal  of  tender,  1113. 
When  right  of  is  barred,  1144-1173. 

statute  of  limitations  applies  by  analogy,  1144. 

time  conforms  to  statute  in  force,  1145. 

redemption  and  foreclosure  reciprocal,  1146. 

right  barred  in  ten  years  in  New  York  and  Wisconsin,  1147. 

in  Tennessee  statute  does  not  apply,  1148. 
When  the  statute  begins  to  run  against,  1 152-1 101. 

not  while  relation  of  mortgagor  and  mortgagee  exists,  1152. 

under  a  Welsh  mortgage,  1153. 

possession  runs  aj;ainst  remainder-men,  1154. 

when  mortgagee  retains  possession  of  part,  1155. 

cause  of  action  accrues  when  mortgagee  enters,  1156. 

twenty  years'  possession  presumed  to  be  a  bar,  1157. 

mere  constructive  possession  not  sufficient,  1158.  , 

795 


INDKX. 

Reference  is  to  Sections. 

REDEMPTION  —  continued. 

when  notice  to  inortgapjor  necessary,  1150. 
when  right  to  redeoin  junior  mortgage  accrues,  1160. 
statute  nuis  from  expiration  of  year  of  redemption  after  im- 
perfect foreclosure,  11 01. 
W/ial  prevents  the  naming  of  the  statute  against,  11G2-1173. 
acknowledgment  of  right,  11G2. 
acknowledgment  after  twenty  years,  1163. 
acknowledgment  to  third  person,  1164. 
acknowledgment  binding  upon  all  under  mortgagee,  1165. 
rendering  an  account,  1166. 
acknowledgment  by  letter,  1 1 67. 
assignment  of  mortgage,  1168. 
recital  of  mortgage  in  deed,  1169. 
proceedings  to  enforce  lien  or  debt,  1170. 
verbal  acknowledgment,  1171. 

filing  of  bill  to  redeem  stops  running  of  statute,  1172. 
how  statute  may  be  pleaded,  1173. 
Time  allowed  for,  after  decree  of  strict  foreclosure,  1565. 
none  allowed  after  decree  of  sale,  1586. 
REFERENCE,  to  state  account  upon  redemption,  1104. 
to  state  amount  of  debt,  1467. 
as  to  title  of  premises  sold  under  decree,  1648. 
as  to  rights  of  claimants  to  surplus,  1685.  1686. 
REFORMATION  of  a  mortgage,  65,  66,  67,  97. 
who  may  obtain,  98. 
against  whom  it  may  be  had,  99. 
of  descri|)ti()n  in  foreclosure  suit,  1464. 
REGISTRATION,  nature  and  application  of  laws  for,  456. 
in  England,  456,  457. 

mortgagee  a  purchaser  within  acts  for,  458. 
judgment  creditor  not  a  purchaser,  460. 
priority  as  between  mortgage  and  judgment,  461. 
unrecorded  mortgage  preferred  to  judgment,  462. 

reverse  rule  in  some  states,  463. 
purchase  money  mortgage,  464. 

priority  of,  465,  466. 
not  necessary  against  mortgagor  and  heirs,  467. 

or  assignee  of  bankrupt,  468. 
equitable  mortgages  within  the  acts,  469,  470. 
mortgages  of  leasehold  estates,  471. 
acts  apply  to  assignments,  472. 
796 


INDEX. 
Reference  is  to  Sections. 

REGISTRATION  —  continued. 

statutory  provisions  as  to,  473. 

consequence  of  omitting,  474. 

assignee  a  purchaser,  475. 

priority  between  assignees,  476. 

manner  of  recording,  477. 
acts  apply  to  agreements  affecting  mortgages,  478. 
acts  apply  to  mortgages  of  crops,  479. 
acts  of  the  several  states,  480-526. 
Requisites  as  to  execution  of  mortgage,  527-549. 

description  of  property,  528. 

apparent  error  in  description,  529. 

signing,  530. 

sealing,  531. 

witnessing.  532. 

acknowledgment  or  proof,  533. 
qualification  of  officer,  534. 
ministerial  act,  535. 
certificate  of  official  character,  536. 

personal  acquaintance,  537. 
certificate  not  conclusive,  538. 

delivery  necessary,  539,  540. 

subsequent  delivery,  541. 
requisites  as  to  time  and  manner  of,  542-549. 
notice  from  time  of  filing  deed,  542. 
certificate  of  register  conclusive  of  time,  543. 
requirement  of,  within  a  specified  time,  544. 
after  death  of  mortgagor,  545. 
in  books  kept  for  mortgages,  546. 
requirement  of  as  to  power  of  attorney,  547. 
of  separate  defeasance,  548. 

purchaser  may  rely  upon  title  that  appears  of  record,  549. 
errors  of,  550-556. 
defective  not  notice,  550. 
errors  in.  do  not  affect  third  persons,  551. 

excci)tion  under  statutes,  552. 
index  no  part  of,  553. 
damages  for  errors  in  index,  554. 
errors  in  descriptive  index,  555. 

mortgage  defectively  recorded  an  equitable  lien,  556. 
effect  of  duly  made,  557. 
priority  once  gained  cannot  be  lost,  558. 

797 


INDKX. 
Reference  is  to  Sections. 

REGISTRATION  — <•(>«///<»<•(/. 

tlioiigli  record  be  destroyed,  <)^>'h 

after-acquired  title,  i)Gl. 

deeds  recorded  subsequent  to  tlie  mortgage  are  not  notice  to  the 
mortgagee.  o()2. 

is  notice  of  the  amount  specified  in  mortgage,  563. 

of  extension  of  mortgage,  .')Gi. 

is  notice  of  lien  at  rate  of  interest  specified,  565. 

acts  do  not  apply  to  siuuiltaneous  mortgages,  566. 

of  simultaneous  mortgages  for  purchase  money,  567,  568. 

notice  as  affecting  priority  by,  570-609. 

policy  of  admitting  notice  to  affect,  571. 

doctrine  of  notice  as  affecting,  572,  573. 

when  title  of  prior  mortgagee  affected  by  record,  575. 

examination  of  records,  576. 

whether  required  before  exercise  of  power  of  sale,  1784. 
RELEASE,  provision  for  partial,  79. 
REMAINDER-MEN  need  not  be  made  parties  to  foreclosure  suit, 

1401. 
REMEDIES  against  purchaser  who  has  assumed  a  mortgage,  768. 

for  removal  of  fixtures,  453-455. 

for  enforcing  a  mortgage,  1215-1236. 

are  concurrent,  72,  1215. 

creditor's  bill  may  be  maintained  at  same  time,  1217. 

personal  remedy  before  foreclosure,  1220. 

power  of  sale  need  not  be  first  exercised,  1221. 

suit  to  foreclose  and  suit  for  debt  at  same  time,  1222,  1224. 

rule  changed  by  statute  in  some  states,  1223. 

upon  express  covenant  in  mortgage,  1225. 

personal  liability  does  not  exist,  when,  1226. 

personal  remedy  after  foreclosure,  1227. 

suit  at  law  for  deficiency  after  sale,  1228. 

sale  of  mortgaged  premises  on  execution  for  same  debt,  1229. 

execution  for  same  debt  may  be  levied  on  other  property,  1230. 

as  affected  by  bankruptcy,  1231-1236. 

discharge  does  not  prevent  foreclosure,  1231. 

in  what  court  lien  may  be  enforced,  1232-1234. 
RENEWAL  of  note  does  not  affect  the  mortgage,  355. 

a  sufficient  consideration  for  a  mortgage,  612. 

should  be  alleged  in  bill  to  foreclose,  146S, 
RENTS  AND  PROP^ITS,  mort;;agor's  right  to,  670,  771,  1120. 

after  entry  of  mortgagee,  671. 
798 


INDEX. 
Reference  is  to  Sections. 

RENTS   AND   PROFITS  — co^^mwerf. 

mortgagee  before  entry  has  no  lien  upon,  772. 

accruing  at  time  of  foreclosure  sale,  1659. 

mortgagee  in  possession  must  account  for,  1114-1120. 

what  chargeable  with,  1121-1125. 
REPAIRS  by  mortgagee  in  possession,  allowances  for,  1126-1131. 
REPLEVIN  may  be  maintained  by  mortgagee  for  fixtures  removed,  453. 

for  timber  removed,  688. 
RESALE  under  decree  of  foreclosure,  1639,  1669. 
REVIVOR  of  mortgage,  943-949. 

cannot  be  had  to  prejudice  of  third  persons,  944. 

assignment  to  third  person  at  request  of  mortgagor,  945. 

redelivery  of  mortgage  note,  946. 

verbal  agreement  to  continue  for  another  debt,  947. 

as  against  other  parties  having  interests  in  the  property,  948. 

as  against  wife  when  she  is  surety,  949. 
RHODE  ISLAND,  nature  of  a  mortgage  in,  49. 

vendor's  lien  not  adopted  in,  191. 

parol  evidence  to  show  a  mortgage,  313. 

provisions  respecting  registration  in,  516. 

provisions  respecting  mechanics'  liens,  516. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1027. 

redemption  after  entry  to  foreclose,  1051,  1356. 
statute  of  limitations,  twenty  years,  1193. 
provisions  respecting  foreclosure  by  entry  and  possession,  1245. 
ejectment  to  foreclose  mortgage,  1279. 
statutory  provisions  relating  to  foreclosure,  1356. 
power  of  sale  mortgages  and  trust  deeds  in,  1756. 
RIGHT  OF  ACTION,  when  it  accrues,  1174-1191. 

bill  to  foreclose  must  show  it  has  accrued,  1471. 
ROLLING  STOCK  of  railroads,  whether  fixtures,  452. 

SALE  of  mortgage  at  discount  not  usury,  641. 

enforcement  of  against  purchaser.     (See  Foukclosukk  Sale.) 
Salcy  setting  aside  of.     (See  Fokicclosurk  Salk,  1668-1681.) 
Sale  in  parcels,  under  decree  of  court,  1616-1619. 
required  in  Indiana,  1331,  n. 
may  be  required  by  statute  or  by  court,  16  Hi. 
when  wLshes  of  mortgagor  to  be  followed,  1617. 
when  [iropcrly  may  be  sold  entire,  1618. 
sale  on  subsequent  dcfauH.,  1619. 

799 


INDFX. 

Reference  is  to  Sections. 

SALE  —  cant  i  lined. 

Under  power  of  S(de  morUiages  mid  trust,  deeds,  1H57-1860. 
giMUMally  no  (»l)liualion,  1857. 

iiiukM-  statutes  ami  in  case  of  special  ociuity,  1857. 
when  sale  of  piopnty  entire  not  justified,  1858. 
when  trustee  should  sell  in  parcels,  1851). 
sale  of  suHicient  only  to  pay  debt,  1800. 
SCIRE  FACIAS,  foreclosure  by  in  Colorado,  1325. 
in  Illinois,  13."33. 
in  Pennsylvania,  1355. 
SEAL,  requisite  to  a  mortgage,  81. 
by  corporation  necessary,  128. 
provisions  of  the  several  states  regarding,  531. 
implies  consideration,  613. 
SET-OFF,  when  may  be  availed  of  in  foreclosure  suit,  1406-1498. 
SETTING  ASIDE  OF  SALE.     (See  Foreclosurk  Salk.) 
SIGNING,  a  requisite,  81,  530. 

SIMULTANEOUS  MORTGAGES,  recording  acts  do  not  apply,  566. 
for  purchase  money,  567,  568. 
several  notes  secured  by  one  mortgage,  606. 
surplus  under,  168!). 
SOLICITOR'S  FEES.     (See  Attorney.) 
SOUTH  CAROLINA,  nature  of  a  mortgage  in,  50. 
vendor's  lien  denied  in,  191. 
parol  evidence  to  show  a  mortgage,  314. 
provisions  respecting  registration  in,  517. 
provisions  respecting  mechanics'  liens,  517. 
usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 
entry  of  satisfaction  of  record,  1028. 
no  redemption  after  foreclosure,  1051,  1357. 
statute  of  limitations,  twenty  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1357. 
power  of  sale  mortgages  and  trust  deeds  in,  1757. 
STATUTE  OF  LIMITATIONS.     (See  Limitations,  Statute  of.) 
STATUTORY  MORTGAGE,  what  is,  178. 
STAY  of  foreclosure  proceedings,  when  improperly  used,  1447. 

of  proceedings  on   account  of  controversy  between  subsequent 
incumbrancers  not  allowed,  1601. 
STREET,   mortgagor  cannot  dedicate   to  public  use  as  against    mort- 
gagee, 676. 
STRICT  FORPXLOSURE.     (Sefe  Foreclosure  without  Sale.) 
800 


INDEX. 
Reference  is  to  Sections. 

SUBROGATION  arises  by  operation  of  law,  when,  874. 

applies  generally  in  favor  of  one  paying  a  debt  for  another,  874. 
test  of  the  right,  876. 

mortgage  paid  by  one  not  under  obligation  to  pay  it,  877. 
mortgagee  paying  prior  incumbrance,  878,  1080,  1137. 
mortgagor  purchasing  his  own  mortgage,  879. 
when  mortgage  is  enforced  upon  other  property,  880. 
indorser  or  surety  paying  the  debt,  881. 
whether  surety  subrogated  to  debt  as  well  as  security,  882. 
of  surety  to  securities  given  subsequently,  883. 
when  creditor  has  made  further  advances,  884. 
not  lost  by  renewal  of  mortgage,  885. 
SUNDAY,  validity  of  mortgage  executed  on,  623. 
SUPPORT,  mortgage  for,  whether  strictly  a  mortgage,  388. 
when  mortgagor's  right  of  possession  implied,  389. 
alternative  condition  for,  390. 
where  to  be  furnished,  391. 
who  may  perform  condition  for,  392. 
who  may  foreclose  mortgage  for,  393. 
agreement  for  arbitration  in  mortgage  for,  394. 
mortgage  for  may  be  redeemed,  390. 
performance  of  condition  for,  887. 

when  it  implies  the  mortgagor  may  remain  in  possession,  668. 
SURETY,  wife  mortgaging  her  property  for  her  husband's  debt,  114. 
when  principal  creditor  is  entitled  to  security  given  to,  385. 
whether  he  may  release  security,  380. 
cannot  release  after  liability  is  fixed,  387. 
mortgagee  should  not  release  security  to  prejudice  of,  724. 
principal  creditor  entitled  to  security  to,  726. 
when  mortgagor  becomes,  as  to  purchaser,  741. 
paying  debt,  subrogated  to  security,  881. 
whether  subrogated  to  debt,  882. 

subrogated  to  securities  given  after  original  contract,  883. 
may  redeem  mortgage,  10G3. 

when  may  foreclose  mortgage  in  his  own  name,  1380. 
right  of  in  surplus  proceeds,  1706. 
SURPLUS,  from  foreclosure  sale  under  decree,  1684-1698. 
usually  paid  into  court,  1GH4. 

court  may  appoint  referee  to  settle  claims  to,  1685. 
exceptions  may  be  taken  on  filing  of  report,  1686. 
only  absolute  liens  considered,  1687. 
when  there  are  several  liens  on  the  premises,  1688. 

YOU  IF.  51  801 


,  INDEX. 

Reference  is  to  Sections. 

SURPLUS  —  continued. 

siinultiineous  mortgages,  1G80. 
mortgagee  may  niaUe  claim  to,  1()!)0. 
equilios  of  sul)seqiient  incumbrancers  of  part,  1691. 
prior  unrecorded  mortgage  preferred  to  judgment,  1692. 
dower  in  surplus,  1693,  1694. 
of  sale  made  after  death  of  mortgagor,  1695. 
lessee  for  years  not  entitled  to,  1696. 
attachment  of,  1697. 
upon  sale  under  junior  mortgage,  1698. 
holder  of  notes  not  due  not  entitled,  1700. 
From  sale  under  power,  1927-1939. 

deed  generally  provides  for  disposal  of,  1927. 

unproductive,  not  chargeable  with  interest,  1928. 

must  be  applied  according  to  title,  1929. 

notice  of  claims  to,  1930. 

whether  administrator  or  heir  entitled  to,  1931. 

in  case  of  bankruptcy,  1932. 

dower  in,  1933. 

when  equity  of  redemption  has  been  attached  or  sold  under 
execution,  1934. 

judgment  lien,  1935. 

when  mortgagor  has  conveyed  part,  1935. 

from  sale  for  instalment,  1936,  1937,  1938. 

right  to,  may  be  determined  by  suit  for  money  had  and  re- 
ceived, 1939. 

TACKING  other  debts  to  mortgage,  360. 

English  doctrine  of,  569,  1082. 
TAXES,  provision  for  payment  of,  77. 

are  generally  secured  by  mortgage,  358. 
on  mortgage  debt,  agreement  to  pay,  636. 
tax  title  acquired  by  mortgagor,  680. 
by  mortgagee,  713. 
when  a  trust,  714. 
mortgagee  paying  is  subrogated  to  lien  of,  1080. 
paid  by  mortgagee  allowed  in  account,  1134. 
failure  to  pay,  when  a  breach  of  the  condition,  1175. 
Payment  of  by  mortyayor  does  not  male  his  possession  hostile,  1200. 
decree  of  sale  should  include,  1597. 

when  an  incumbrance  which  will  excuse  purchaser  from    com- 
pleting sale,  1649. 
802 


INDEX. 
Reference  is  to  Sections. 

TENANT  FOR  LIFE  may  make  a  mortgage,  137. 
TENANT  IN  COMMON,  of  partnership  real  estate  mortgaged,  119-123. 
joint  mortgagee  after  foreclosure  is,  135. 
mortgage  to  two  to  secure  debt  to  one,  170,  704. 
mortgage  by,  141,  1314. 
partition  in  case  of  mortgage  of  one  of  several  parcels  held  in 

common,  706. 
may  redeem,  1063. 

parties  defendant  in  foreclosure  suit,  1409. 
TENDER  before  and  after  default,  886-903. 

before  or  at  the  day  revests  the  estate,  891. 
but  the  debt  still  subsists,  891. 
though  a  gift  is  lost  with  the  estate,  891,  893. 
after  breach  does  not  amount  to  a  discharge,  892. 
rule  otherwise  in  New  York  and  Michigan,  893. 
though  not  kept  good,  debt  discharged,  893. 
questions  as  to  sufficiency  of,  894. 
of  whole  debt  necessary,  894. 
who  may  make,  895. 

must  be  made  to  a  person  authorized  to  receive,  896. 
when  it  may  be  made  to  mortgagee  after  he  has  assigned  the 

mortgage,  896. 
place  of  tender,  897. 
when  mortgagee  avoids  it,  897. 
may  be  made  at  any  time  of  day,  898. 
interest  runs  from  the  time  of,  899. 
must  be  absolute  and  unconditional,  900. 
in  what  money  it  may  be  made,  901. 
in  legal  tender  notes  of  the  United  States,  901. 
must  cover  costs,  901. 
costs  incurred  by  refusal  of,  902,  1113. 
for  purpose  of  redemption,  1088. 

what  is  sufficient,  1088. 
should  be  nuxde  in  bill  to  redeem,  1095. 
not  accepted  does  not  prevent  foreclosure,  1450. 
after  breach  docs  not  defeat  power  of  sale,  1793. 
otherwise  held  where,  1794. 
TENNESSEE,  nature  of  a  mortgage  in,  51. 
form  of  mortgage,  61. 
written  authority  to  fill  blanks,  90. 
vendor's  lien  adopttid  in,  191. 
not  assignable,  212. 

803 


INDl'.X. 
Reference  is  to  Soctioiis. 

TENNESSEE  —  continued. 

parol  evidence  to  show  a  mortgage,  315. 

provisions  respecting  registration  in,  518. 

provisions  respecting  mechanics'  liens,  518. 

usnry  in,  G33. 

entry  of  satisfaction  of  record,  1029. 

redemption  after  foreclosure,  1051,  1358. 

statute  of  limitations  does  not  apply  to  redemption  in,  1148. 

statute  of  limitations,  seven  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1358. 

strict  foreclosure  in,  1554. 

power  of  sale  mortgages  and  trust  deeds  in,  1758. 
TERMS  OF  SALE  under  decree  of  foreclosure,  1613-1615. 
TEXAS,  nature  of  a  mortgage  in,  52. 

vendor's  lien  adopted  in,  191. 
assignable,  212. 

parol  evidence  to  show  a  mortgage,  316. 

provisions  respecting  registration  in,  519. 

provisions  respecting  mechanics'  liens  in,  519. 

usury  in,  633. 

assignment  of  debt  passes  mortgage  in,  817. 

entry  of  satisfaction  of  record,  1030. 

no  redemption  after  foreclosure,  1051,  1359. 

statute  of  limitations,  ten  years,  1193. 

mortgage  barred  when  debt  barred,  1207. 

statutory  provisions  relating  to  foreclosure,  1359. 

power  of  sale  mortgages  and  trust  deeds  in,  1759. 
TITLE  BOND,  legal  effect  of,  226. 

may  be  foreclosed  as  a  mortgage,  1449. 

a  strict  foreclosure  proper,  1541. 
TITLE  DEED,  mortgage  by  deposit  of,  179. 

doctrine  in  England,  180. 

legal  effect  of  the  deposit,  181. 

omission  of  part  of  the  deeds,  182. 

presumption  of  purpose  of  deposit,  183. 

law  of  place  of  contract  governs  deposit,  184. 

American  doctrine,  185,  186. 

memorandum  of  deposit,  187. 

how  such  mortgage  is  enforced,  188. 

possession  of  essential  in  absence  of  recording  acts,  457. 

for  security  of  grantor's  general  creditors  properly  foreclosed   in 
equity,  1448. 
804 


INDEX. 

Reference  is  to  Sections. 

TREES  in  nursery,  whether  part  of  realty,  434, 

TRESPASS,  mortgagor  cannot  maintain  against  mortgagee,  674. 

mortgagee  may  maintain  for  mesne  profits,  721. 

against  mortgagor  for  waste,  687,  696. 
TRUST,  distinguished  from  mortgage,  281,  332. 

notice  of  a  secret,  577. 

parol,  does  not  attach  to  mortgage,  846. 
TRUST  DEED.     (See  Deed  of  Tkust.) 

TRUSTEE  PROCESS,  mortgagor  may  be  held  to  answer  to,  938. 
TRUSTEES,  one  of  several  cannot  assign,  795. 

mortgages  by,  102. 

cannot  discharge,  959. 

foreclosure  suit  by  nominal,  1383,  1384. 

for  creditors  may  maintain  foreclosure  suit,  1386. 

when  proper  party  to  foreclosure  suit,  1399. 

USE  AND  OCCUPATION,  whether  mortgagor  liable  for,  671. 
USURY,  as  affecting  mortgages,  633-663. 
intent  to  take,  634. 

whether  payment  of  attorney's  fees  constitutes,  635. 
whether  payment  of  taxes  on  debt  constitutes,  636. 
whether  payment  of  exchange  constitutes,  637. 
whether  payment  of  fines,  &c.,  constitutes,  638. 
whether  agreement  for  repurchase  is,  639,  640. 
whether  sale  of  mortgage  constitutes,  641. 
taken  by  agent,  642. 
burden  of  proof,  643. 
who  may  set  up  defence  of,  644. 

mortgagor  estopped  by  certificate  of  validity,  645,  1495. 
cannot  be  set  up  after  foreclosure,  646. 
boims  paid  to  secure  extension,  647,  648. 
when  it  avoids  agreement  for  extension,  649. 
Compound  interest,  whether  it  constitutes,  650. 

while  agreement  for  is  executory,  651. 

accrued  interest  a  debt,  652. 

interest  coupons,  653. 

computation  of  interest,  654. 
Conjlict  of  laws  as  to,  656-663. 
what  law  governs,  657 
laws  of  another  state  not  implied,  ^58. 
when  law  of  place  of  contract  prevails,  659. 
lex  rei  slice  does  not  control,  660. 

805 


INDKX. 
Reference  is  to  Sections. 

USURY  —  continued. 

effect  of,  G61. 

governs  form  and  validity,  602. 

laws  of  another  state  must  be  pleaded,  003. 

cannot  be  set  up  by  purchaser  who  has  assumed  mortgage,  745. 

in  assignment  of  mortgage,  832. 

defence  to  foreclosure,  1800,  M0.3,  Ml)9. 

purchaser  subject  to  mortgage  cannot  set  up,  1494. 

previously  paid  may  be  offset,  1499. 

as  ground  for  enjoining  sale  under  power,  1808,  1809. 
UTAH  TERRITORY,  nature  of  a  mortgage  in,  53. 

provisions  respecting  registration  in,  520. 

provisions  respecting  mechanics'  liens  in,  520. 

usury  in,  033. 

entry  of  satisfaction  of  record,  1031. 

statutory  provisions  relating  to  foreclosure,  1360. 

VADIUINI,  mortuum  and  vivum,  2,  4. 

VENDEE'S  LIEN  for  money  paid  before  receiving  conveyance,  223. 

upon  rescission  of  contract  of  sale,  224. 
VENDOR'S  IMPLIED  LIEN,  189-222. 
nature  of,  189. 
ground  of  the  doctrine,  190. 
in  what  states  adopted,  191. 
presumed  to  exist,  192. 
extent  of,  193. 
for  unliquidated  claim,  194. 
as  affected  by  agreement  of  parties,  195. 
parol  evidence  that  no  lien  was  intended,  196. 
waiver  of,  197,  198. 
defeated  by  vendee's  conveyance,  199. 

or  mortgage,  200. 
when  judgment  lien  takes  precedence,  201. 
against  vendee's  assignee  in  bankruptcy,  202. 
subject  to  legal  lien  arising  at  same  time,  203. 
purchaser  with  notice  of,  204,  205. 

without  notice  of,  200. 
waived  by  taking  distinct  security,  207. 

though  this  be  inadequate,  208. 

whether  taken  at  same  time  or  not,  209. 

not  conclusively,  210. 
when  vendor  estopped  to  claim  lien,  211. 
806 


INDEX. 
Reference  is  to  Sections. 

VENDOR'S  IMPLIED  LIE:S  —  contmued. 
whether  assignable  with  the  debt,  212. 
subrogation  to,  21  "5. 

when  notes  are  made  to  third  person,  214. 
indorsement  of  note  without  recourse,  215. 

as  collateral  security,  216. 
mere  change  in  form  of  debt,  217. 
lost  when  debt  is  barred,  218. 

whether  remedy  at  law  must  be  first  exhausted,  219. 
parties  to  bill  to  enforce,  220. 
decree  to  enforce,  221. 
marshalling  assets,  222. 
VENDOR'S  LIEN  BY  CONTRACT,  nature  of,  225. 
legal  effect  of  title  bond,  226. 
vendor  cannot  affect,  227. 
express  reservation  in  deed,  228,  229. 
vendor's  title  imperfect,  230. 
married  woman  bound  by,  231. 
waiver  of,  232. 
assignment  of,  235. 
order  of  payment  of  notes,  236. 
enforced,  though  note  is  barred,  237. 
proceedings  to  enforce,  2  J;'. 
tender  of  performance  before  action,  240. 
VENUE  of  suits  to  foreclosure  mortgages,  1444. 
VERMONT,  nature  of  a  mortgage  in,  54, 

vendor's  lien  denied  in,  191. 

parol  evidence  to  show  a  mortgage,  317. 

rule  as  to  fixtures  in,  442. 

statutory  provisions  as  to  fixtures,  443. 

provisions  respecting  registration  in,  521. 

provisions  respecting  mechanics'  liens  in,  521. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1033. 

redemption  after  foreclosure,  1051,  1361. 

statute  of  limitations,  fifteijn  years,  1103. 

statutory  provisions  to  foreclosure,  1361. 

strict  foreclosure  is  the  form  in  use,  1555. 

power  of  sale  mortgages  and  trust  deeds  in,  1760. 
VIRGINLV,  nature  of  a  mortgage  in,  55. 

written  authority  to  fill  blanks,  00. 

vendor's  lien  denied  in,  101. 

807 


IXOKA'. 
Itefcreiice  is  to  Sectioiis. 

V 1  lU ;  I N I A  —  confimietl. 

parol  evidonce  to  show  n  inortLiagc,  31H. 
provisions  respecting  rcgistnition  in,  522. 
provisions  respecting  niccliaiiics'  liens  in,  022, 
usury  in,  CuV,]. 

entry  of  satisfaction  of  record,  1(I.'V2. 
no  redemption  after  foreclosure,  1().')1,  13(52. 
statute  of  limitations,  fifteen  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1302. 
power  of  sale  mortgages  and  trust  deeds  in,  1761. 
VIVUM  VADIUM,  2. 

VOID  AND  VOIDABLE  MORTGAGES,  610-632. 
for  want  of  consideration,  610,  612. 

not  necessary  that  consideration  pass  at  the  time,  611. 

mortgage  by  way  of  gift,  614. 

mortgage  for  accommodation,  615. 
for  illegality  of  consideration,  617. 
as  contrary  to  public  policy,  618. 
who  may  take  advantage  of  illegality,  619. 
gaming  contracts,  619. 

when  illegal  consideration  can  be  separated,  620. 
mortgage  may  be  valid  in  part,  621. 
burden  of  proof,  622. 
executed  on  Sunday,  623. 
debt  contracted  on  Sunday,  623. 
for  fraud  on  part  of  mortgagee,  624. 

fraudulent  intent,  625. 
mortgage  obtained  by  duress  is,  626. 
mortgage  made  to  defraud  creditors,  627. 
fraud  as  to  a  particular  creditor,  628. 
for  fraudulent  preference,  629. 
who  may  take  advantage  of,  630. 
when  mortgagor  estopped  to  claim  invalidity,  631. 

or  that  the  mortgage  was  made  to  defraud  creditor,  632. 

WAIVER,  of  vendor's  lien,  207-210. 
of  lien  by  contract,  232. 
of  entry  and  foreclosure,  1265-1275. 
made  conditionally,  1272. 
of  strict  foreclosure,  1569,  1570. 
of  power  of  sale,  1792-1800. 
of  sale  made  under  power,  1906-1922. 
808 


INDEX. 
Reference  is  to  Sections. 
WASHINGTON  TP:RR1T0RY,  nature  of  a  mortgage  in,  55  a. 
provisions  respecting  registration  in,  523. 
provisions  respecting  mechanics'  liens  in,  523. 
usury  in,  633. 

entry  of  satisfaction  of  record,  1034. 
statutory  provisions  relating  to  foreclosure,  1363. 
WASTE  by  stranger,  mortgagor  may  recover  for,  664. 
By  mortgagor,  684-698. 

may  be  restrained  by  injunction,  684. 
removal  of  timber  already  cut,  685. 
no  obligation  on  part  of  mortgagee  to  enjoin,  686. 
mortgagee  may  maintain  trespass  for,  687. 
mortgagee  may  maintain  replevin  for,  688. 
liability  of  purchaser  of  timber,  689. 
WELSH  MORTGAGE,  3. 

mortgagee's  possession  does  not  bar  redemption,  1153. 
WEST  VIRGINIA,  nature  of  a  mortgage  in,  56. 
vendor's  lien  denied  in,  191. 
parol  evidence  to  show  a  mortgage,  319. 
provisions  respecting  registration  in,  524. 
provisions  respecting  mechanics'  liens  in,  524. 
usury  in,  633. 

entry  of  satisfaction  of  record,  1035. 
no  reden)ption  after  foreclosure,  1051,  1364. 
statute  of  limitations,  ten  years,  1193. 
statutory  provisions  relating  to  foreclosure,  1364. 
power  of  sale  mortgages  and  trust  deeds  in,  1762. 
WIFP:,  not  bound  by  additions  or  blanks  filled  into  mortgage  without 
consent,  91,  95. 
owning  mortgage  should  sue  alone,  1393. 

of  mortgagor  when  made  a  party  to  foreclosure  suit,  1420-1422. 
WISCONSIN,  nature  of  a  mortgage  in,  57. 
deed  of  trust  not  allowed  in,  62. 
authority  to  fill  blanks,  90. 
vendor's  lien  adopted  in,  191. 
parol  evidence  to  show  a  mortgage,  320. 
record  of  assignment  not  notice  to  mortgagor,  173. 
provisions  respecting  registration  in,  525. 
provisions  respecting  mechanics'  liens  in,  524. 
usury  in,  633. 

entry  of  satisfaction  of  record,  1036. 
no  redemption  after  foreclosure,  1051,  1365. 

809 


INDEX. 
Reference  is  to  Sections. 

WISCONSIN  —  continued. 

redemption  barroc!  in  ten  years  in,  1147. 

statute  of  limitations,  twenty  years,  111)3. 

statutory  provisions  relating  to  foreclosure,  1365. 

strict  foreclosure  in,  15aG. 

power  of  sale  mortgages  and  trust  deeds  in,  1763. 
WITNESSES,  requirements  as  to,  82,  532. 
WOOD,  growing,  subject  of  mortgage,  115. 

mortgagor  may  cut  for  his  fires,  694. 
WRIT  OF  ENTRY,  mortgagee  may  recover  possession  by,  718. 

(See  FouKCLOsuRE  by,  1276-1316.) 
WYOMING  TERRITORY,  record  of  assignment  not  notice  to  mort- 
gagor, 473. 

provisions  respecting  registration  in,  526. 

provisions  respecting  mechanics'  liens  in,  526. 

usury  in,  633. 

entry  of  satisfaction  of  record,  1037. 

statute  of  limitations,  twenty-one  years,  1193. 

statutory  provisions  relating  to  foreclosure,  1366. 
810 


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